Grant funding is the backbone for so many nonprofit organizations. To help you strengthen this aspect of your fundraising we reached out for guidance to Dana Textoris, Managing Director at Grants Plus. We asked her about how foundations and corporations are changing their grantmaking and their responses to calls for equity and increased funding for Black-led nonprofits.
How have the events of 2020 and 2021 changed the way that foundations and corporations approach grantmaking and investments in nonprofits?
For years many nonprofit leaders have aspired to change the terms of the relationships with funders — to gain more flexibility, less restriction, more trust. During the pandemic, we saw more funders make a shift in that direction. For example, the Center for Effective Philanthropy (CEP) surveyed nonprofits and found that 70% say funders have relaxed their reporting requirements. The good news is that CEP has found that many funders plan to keep it that way.
What have your witnessed in terms of changes in how foundations are soliciting proposals? Have you seen an increase in unrestricted grants?
At the start of the pandemic, we saw many foundations allow nonprofit grantees to use their existing grant funds however was most needed. Since then, we keep hearing that foundations are demonstrating more willingness to make general operating support (GOS) grants. However, we’re not convinced yet — we submit hundreds of grant proposals every year for our clients, and haven’t seen enough GOS giving to believe it’s the new normal.
Our advice is not to wait. Changes in grant making are happening because nonprofit leaders are being more direct and honest about what their organizations need. If your current funders won’t make GOS grants, have a courageous conversation to ask why and explain why this would be powerful for your organization.
Have you seen foundations investing in economic development and education in new ways?
Many educational organizations are addressing new challenges as students return to in-person learning since the pandemic shut-down. These institutions are in need of training for teachers and social emotional programs for students as they recover from the fallout of such a prolonged and in many ways traumatic experience outside the classroom. Funders seem to show an increased willingness to support the mental health needs of students.
Schools and educational organizations broadly need support for “recovery” and getting back on track in school. This includes funding to hire more teachers and staff, as well as retaining their current workforce—especially crucial during a time of profound employment and hiring difficulties. One of our clients, a youth after-school program, has been talking with their funders about a need to increase salaries for part-time program staff in order to remain competitive and keep them on board. Another client is facilitating more workforce development classes than ever, but keeping them small to maintain social distancing, meaning higher costs for additional staff and PPE supplies. We are encouraging our clients to have proactive conversations with their funders about retention challenges and other real obstacles—we are optimistic, but have yet to see how many funders will step up to fund in new areas of need.
Following the murder of George Floyd, there was great energy and attention from funders to invest in organizations confronting racial injustice. Many private and corporate funders across the country launched “racial justice rapid response funds” similar to the COVID relief funds that sprung up at the start of the pandemic. Unfortunately the data is disappointing on how this intention was born out. In August, The Washington Post released a report that showed that of nearly $50 billion pledged by the nation’s largest corporate philanthropies, only $4.2 billion of that was actually made in grants. The rest was made as loans and investments that may benefit the companies that made them.
This isn’t to say that many foundations haven’t followed through on their promises. Here in Cleveland where I am based, for example, The Cleveland Foundation is beginning a second round of grants in 2022 from its Cleveland Black Futures Fund, to support Black-led and Black-serving organizations.
Have you witnessed an increase in giving to Black-led and Black-serving nonprofit organizations and institutions?
Grants from Donor Advised Funds (DAF) are on the rise–in fact, this funding grew 27% in 2020 as compared to 2019, according to the National Philanthropic Trust. Organizations that ignore the trend in giving from grants do so at their own peril! DAF giving is incredibly dynamic. A new report on DAFs from The Giving Institute shows that the health and racial crises of 2020 influenced DAF donors to increase funding to specific organizations: in the past year, DAF grants to public social benefit organizations doubled and they quadrupled to racial justice organizations and Historically Black Colleges and Universities.
Dana Textoris is Managing Director at Grants Plus, the nation’s leading grant seeking consulting firm, that has helped nonprofits secure more than $200 million in funding since 2007.
Copyright 2021 – Mel and Pearl Shaw of Saad&Shaw – Comprehensive Fund Development Services. Let us help you plan for 2021 Video and phone conferencing services are always available. Call us at (901) 522-8727. www.saadandshaw.com.