In a stunning move to signal to the philanthropy world that providing general support grants to nonprofits built by women, people of color, and others is a successful strategy for closing the inequality gap, the Ford Foundation announced on Wednesday that is pouring another $1 billion into an effort it started five years ago,
In 2015, when the foundation announced all of its work would focus on closing the inequality gap, it put $1 billion into its Building Institutions and Networks Initiative, known as Build. Since then, it has made grants to nearly 350 nonprofits in the United States and globally. More than 60 percent of those groups are women-led nonprofits.
Ford officials were not certain they would extend Build, or if they did, that they would devote another $1 billion to the effort, says Kathy Reich, the program’s director. This latest investment in the program happened simply because the grants are working, Reich says, and they are working well for all kinds of organizations, regardless of size, cause, or geography. The grants are also needed now more than ever, she said.
“None of us could have predicted what a tumultuous and challenging five years this has been, particularly the last year and a half,” says Reich. “If we could have predicted in January 2020 that we would be in the middle of a global pandemic, that we would be experiencing a profound racial-justice reckoning in this country, and that we would be experiencing existential threats to democracy all over the world, including in the United States, I probably would have asked you what you were on, but we have seen that the Build grants have helped organizations to be resilient and to weather these multiple crises in ways that are just super important right now.”
She says that became especially apparent at the outset of the pandemic last spring, when Ford and other foundations started getting increasingly panicked calls from grantees who were taking a hit, financial and otherwise. Calls from Build’s grantees were less frantic, says Reich. While her grantees were still facing big challenges, they weren’t in hair-on-fire mode because having that flexible grant money meant they had some funds in reserve and could use them to invest in new technology or whatever they needed to continue their work.
“During that time, it was just a little calmer. They could breathe,” says Reich. “And, honestly, that feeling of breathing room is one of the most remarkable and consistent things that we hear from our partners.” That’s why when Ford officials presented the idea of committing another $1 billion to the effort to its board, Reich says, “we felt really solid that we had a great case to make.”
Ford’s efforts have been closely watched as nonprofits have become increasingly vocal in their demands for general operating support and other help building their organizations. In the wake of the pandemic, many foundations have responded with unrestricted funds, and more than 800 signed a commitment to providing greater flexibility in using foundation dollars. But it is not clear how long that will last, according to surveys of grant makers and Chronicle reporting.
Reich says that while foundations have been mostly reluctant to give a lot of general operating or flexible grants, she has seen a glimmer of hope over the last year, with more foundations willing to start to consider giving more general support — or at least more flexible funding in the short term — as a way to strengthen nonprofits working on equality and social justice.
Greater Resilience
The last five years has been a learning experience, says Reich. Part of what the foundation found out was that general operating and flexible support is an extremely successful approach to grant making, but there can be bumps in the road that can make it confusing or chaotic for grantees.
While there isn’t one grant Reich and her team gave out that first year that didn’t end up being a success, based on feedback from grantees, Reich and her team are adjusting some aspects of their approach. The grants will continue as five-year, unrestricted support, but the team will work more closely with grantees to figure out how the money can do the most to strengthen a nonprofit’s resiliency.
That is a departure from the team’s initial hands-off approach. Reich says while Build grantees were required to hire an outsider to offer an independent view of its work processes and environment, they were then for the most part left to their own devices to figure out what to do with the results of that assessment, how to make changes to their work environment or the way they do things, and what to work on over the five years.
In this next phase, the Build team will work more closely with grantees to help them better assess their needs and offer them more advisory support if they need it. Reich stresses however that her team remains focused on letting the nonprofits drive the process.
“This is a tough balancing act for us because one of the hallmarks of Build is we don’t tell the grantees what to do. We trust them to decide how they’re going to spend their time and their resources, so we want to build the scaffolding and support for them, but we don’t want to tell them they have to use it.”
Reich says her team also plans on doing a much better job of connecting Build grantees to each other.
“Many of them don’t know each other, have never heard of each other, and yet are working on very similar issues in similar areas and facing similar organizational challenges and they want that connection so we’re going to be looking at ways to do that,” says Reich.
Moving Beyond ‘Start-Up Mode’
The Ford Foundation’s Build grant changed everything for the Alliance for Safety and Justice, says Lenore Anderson the group’s founder and president. The organization started in 2016 with the goal of getting California to move away from mass incarceration toward other approaches to public safety. Anderson wanted to push her model to more states but lacked the resources to expand.
“A lot of social-justice organizations struggle to raise sufficient funds year to year,” she says. “It’s actually very hard in the social-justice world to get out of startup mode and be able to really have a high-performance organization that has the kind of internal infrastructure that you need to sustain your work over time.”
In 2018, the group received $1 million a year over four years from Ford. The multi-year funding, the fact that it was for general operating expenses, and the support services from the foundation have all been responsible for helping Anderson make real change in prison systems across the country. In the country’s largest states, including California, Texas, and Illinois, her group has helped reduce incarceration by as many as 75,000 people and gotten close to $500 million reallocated from prisons to trauma centers, mental-health treatment, diversion programs, and other alternatives, she says.
“We’ve really been able to have a big policy impact because we’ve been able to work in multiple states at once, and we’ve been able to scale up quickly,” she says.
So many young nonprofits have to spend their energy and time getting a single policy victory that can help them gain the attention and confidence of big donors and foundations. Anderson says it’s like constantly proving your model year after year to just keep going. But with this multi-year funding, her nonprofit has been able to plan strategically. At the beginning of the grant, Ford enabled the group to include its staff in an effort to identify strengths and weaknesses and devise a growth plan for the group. That has helped ease growing pains as the organization ballooned from about a dozen staff to about 65 in three years.
Her group was able to invest in training, professional development, technology, and internal processes and systems that allow it to quickly and efficiently process reimbursements, for example.
“All of the things that long-standing organizations may not think of as a big deal, those infrastructure things are a very big deal to new organizations,” says Anderson. “When you’re thinking about scaling an institution, you can do that more effectively if you have multi-year support.”
The Ford grant is not tied to any particular program. Instead, the group can spend the money as it sees fit, something that is uncommon for foundations. Anderson says this freedom is important. The group’s goal — to replace mass incarceration with shared safety programs that foster health, healing, and breaking cycles of violence, in the nation’s largest states — is bold. It requires communicating with the public, the media, and elected officials as well as understanding community needs and the court system. The environment is complex and fast changing, and having funding that is not tied to a particular program enables the group to be effective, she says.
“It’s almost impossible to predict exactly what’s going to happen and what’s going to be most effective to achieving your goals, and this is true for pretty much any social-justice endeavor,” Anderson says. “General operating support is what organizations need.”
Anderson also says that being part of the Build program and the long-term funding it provides has helped to give other grant makers confidence in her group. That is helping the organization bring in more money.
“I’m really excited about this announcement and the Ford Foundation’s continued commitment to this model,” Anderson says. “It’s an excellent model of philanthropic investment and makes a major difference in the ability of organizations to go from promise to actuality.”
