Report Finds Gaps in Foundation Efforts to Strengthen Nonprofits

Report Finds Gaps in Foundation Efforts to Strengthen Nonprofits

When it comes to strengthening the operational capacity of nonprofits, there is a gap between the support foundations tend to provide and the support nonprofits say they need, a report from the Center for Effective Philanthropy finds.

Based on a survey of a hundred and seventy nonprofit CEOs and a hundred and eighty-seven foundation leaders who oversee their organization's programmatic work, the report, Strengthening Grantees: Foundation and Nonprofit Perspectives (40 pages, PDF), found that although 87 percent of foundation officials said their organization was aware of their grantees' needs, 58 percent of nonprofit CEOs said none or few of their funders ask about their needs beyond funding. According to the survey, nonprofit CEOs said they most needed help with fundraising (42 percent), staffing (37 percent), and communications (26 percent), while foundation leaders viewed fundraising (51 percent), governance (39 percent), and financial management (33 percent) as most important.

"Most nonprofits do not have the capital or the incentives to invest in their people," Fund the People president and CEO Rusty Stahl told CEP. "Most funders focus on the financial and program strengths and needs of grantees, not on the staffing strengths and needs. This dearth of investment can produce an unjust workplace, weak recruitment, poor work conditions, burnout and turnover, and unhealthy executive transitions."

Funded in part by the David and Lucile Packard Foundation and the James Graham Brown Foundation, the survey found that nonprofit CEOs see general operating support as having the greatest impact in strengthening their organizations — more than capacity-building or organizational effectiveness grants or technical assistance beyond the grant. The most commonly cited benefits of general operating support were flexibility (37 percent) and being able to use it to pay for operational needs (34 percent).

The survey also found that nonprofits and foundations have a role to play in closing the gap between the support nonprofits need and the support foundations provide. When requesting organizational support, for example, 64 percent of nonprofit CEOs take into consideration what they think foundations prefer to fund — more than the share who consider their own organization's sustainability needs (40 percent) or the results of any assessment of its needs (36 percent). In addition, the most commonly cited factors that made nonprofit CEOs comfortable or uncomfortable telling funders what were their organization's needs were the strength of their relationship with the funder and the level of trust between them (32 percent), the degree of transparency their organization had with its funders or their organization's commitment to be transparent/honest (24 percent), and fear that their organization would be thought of as weak (18 percent). Challenges foundation leaders cited in providing support to strengthen grantees included lack of internal staff capacity and time (64 percent), difficulties in communication with or lack of interest on the part of grantees (37 percent), difficulties in incorporating this type of support into the foundation's broader strategies or initiatives (31 percent), and such support being less of a priority for the foundation (31 percent).

"Strengthening Grantees: Foundation and Nonprofit Perspectives." Center for Effective Philanthropy Report 10/04/2018.