August 14, 2018; Inside Philanthropy
As NPQ readers know, all too often program-specific funding fails to adequately support the management and administrative functions necessary for the effective delivery of those very same programs. In response, in 2016, the Ford Foundation started an initiative for Building Institutions and Networks (BUILD) that explicitly seeks to fill this gap by providing funds for general operating support and capacity building. BUILD is designed to provide $1 billion in grants over five years to social justice nonprofits. The program is still in early days, but initial results are promising.
Two of BUILD’s grant recipients that have used Ford funding to expand their operations are United We Dream network (UWD), an immigrant rights organization, and PRISMA (Programa Regional de Investigación sobre Desarrollo and Medio Ambiente, or the Regional Program of Development and Environmental Research), a land-use nonprofit working with indigenous peoples in El Salvador. The operating support has freed both groups from the tedium of having to reapply to Ford for year-to-year grants. Further, the groups have been able ramp up their programming. UWD’s grant could not have come at a better time, coming as it does after an explosion of need following the inauguration of the Trump administration. Simply put, BUILD grants are making an impact today that might continue to pay off far into the future for nonprofits and their stakeholders.
If the BUILD program is successful, it could help overhaul grantmaking throughout the philanthropic community. The need for support of general operations and capacity building is a well-worn subject in the nonprofit sector, and yet the field still seems to be stuck lacking ample funding. Capacity building is not the forward-facing part of nonprofit work, but we all know that having strong management and operational systems in place is still a vital part of nonprofit viability and success.
Nonprofits know this information and can easily communicate it to their donors. So what gives? Part of the impasse may come from the way donors are wired. Economic theories suggest that the urge to give does not come purely from the goodness of a donor’s heart and that other factors such as the desire to gain social approval also play a strong role in motivating giving. Neuroscience seems to support this theory of impure altruism; donors prove more responsive to things that enhance that urge—like giving to meet a concrete project’s funding goals that can give donors bragging rights in dinner conversations with their friends, for instance. Is it so hard, then, to imagine that funding the “unsexy” parts of nonprofits gets overlooked? Potential issues of free-riding only exacerbate the situation. A donor can easily say, “Yes, spending on capacity building is great, but I will leave that to someone else. I want to make this project happen.”
Changing donor behavior is not always easy. But getting foundation buy-in is a good first step. Showing that these sorts of grants are not only successful but generalizable just might convince other foundations to follow suit.—Sean Watterson