Multiyear, Operating Support Up, Survey Finds

As philanthropic giving continues to rebound from its Great Recession lows, grantmakers in the U.S. have increased funding for multiyear, general operating, and capacity-building grants, a report from Grantmakers for Effective Organizations finds.

Based on a triennial survey of staffed grantmaking foundations, the report, Is Grantmaking Getting Smarter? (28 pages, PDF), found that the median share of funds dedicated to general operating support in 2014 increased for the first time to 25 percent, after being stalled at 20 percent in 2008 and 2011; that the share of survey respondents awarding multiyear grants returned to pre-recession levels, up from 28 percent in 2011 to 58 percent in 2014; and that more than a quarter of survey respondents reported that they had increased funding for multiyear grants (31 percent), general operating support (27 percent), and capacity building (27 percent). In addition, nearly three-quarters of respondents (74 percent) said it was very important for funders to provide the types of support that strengthen grantee organizations and enable them to achieve greater impact.

The survey also found that more grantmakers were seeking grantees' perspectives to inform their strategy and practice, with 53 percent now regularly soliciting feedback; that of those grantmakers soliciting feedback, 63 percent sought input on foundation strategy from their grantees or community representatives; and that 52 percent requested advice from a grantee advisory committee with respect to its policies, practices, or program areas.

Despite these positive trends, the report notes, fewer than half of the surveyed funders said they shared what they learned from their own evaluations with grantees and stakeholders (45 percent) or other grantmakers (49 percent). In addition, while 80 percent of survey respondents said it is important to coordinate with other funders to achieve greater impact, 53 percent said they never or rarely support the costs of collaboration among their grantees.

"When GEO previously surveyed funders in 2011, the results were pretty bleak. The recession caused endowments to shrink and there was a lot of uncertainty about what was around the bend. As a result, funders regressed on many of the practices that would have supported nonprofits to be strong and nimble during challenging times," said J McCray, chief operating officer of GEO and author of the study. "[I]n the past few years, there’s been a meaningful shift in the way grantmakers support nonprofit results....The philanthropic field is moving in the right direction. However, we’re still a far cry from reaching our full potential to provide nonprofits with the support they need to be strong, adaptable and resilient."

"Is Grantmaking Getting Smarter." Grantmakers for Effective Organizations Press Release 11/20/2014.