March 18, 2019 | Read Time: 5 minutes
Many charities struggle to pay for overhead costs — including rent, health-insurance premiums, and salaries — that are essential to their work but don’t produce flashy results. That’s because most donors and grant makers prefer to support projects with tangible outcomes.
But the number of grant makers who recognize the value of helping nonprofits cover these expenses is rising, and it is possible to attract unrestricted grants. The Chronicle spoke to nonprofit leaders for tips on how to attract general operating support. Here are their suggestions.
Ask for funding that helps you respond to changing events.
Glen O’Gilvie, chief executive at the Center for Nonprofit Advancement, says that work typically falls into two camps: proactive and reactive. Grant-funded programs usually address proactive work, which has a clear strategy and benchmarks for success. However, to react to changing community needs with agility, charities often must dip into unrestricted funds.
To help remedy this, O’Gilvie suggests fundraisers seek support for “programming that is in response to need and not necessarily planned.”
For example, the Alliance for Housing and Healing, which provides housing and health services to individuals living with HIV/AIDS in Los Angeles County, used general operating support to respond to a bed-bug outbreak that affected its clients. “We were able to, with unrestricted funds, go out and buy 2,000 mattress covers, or thereabouts,” said Jack Lorenz, director of development and communications.
Factoring such rapid-response programs into applications for general operating support helps grant makers see the connection between unrestricted grants and your ability to meet emergency needs.
Cultivate the program officer.
Like so much in development, the door to unrestricted support opens through a relationship.
Fundraisers suggest treating program officers like prospective donors. Invite them to a program site, catch up with them over coffee to build a personal bond, and keep them updated on accomplishments and areas of need through phone calls and emails, for example.
Frank conversations with foundation staff also can help your nonprofit tailor its application to a foundation’s needs and interests. Lorenz suggests asking a program officer explicitly what to include in an application. “The more information that you can provide to your program officer, the easier their job is to sell the grant to their board,” he said.
Use budget narratives to strengthen your case.
If a proposal isn’t successful, ask the program officer why. Answers to that question can help you prepare a stronger one the next time. For example, the Center for Nonprofit Advancement learned through debriefs that grant makers wanted budgets with greater detail. The center responded by adding a written-through description of what each proposed budget would accomplish, along with explanatory footnotes for certain line items. After learning from that experience, it started adding those details on all of its proposals.
Connect operational support to program success.
Explain to potential grant makers that operational support also helps programs run smoothly. As O’Gilvie puts it, you can foster “the understanding that operational support is program support.” For example, you can emphasize how unrestricted funding supports staff.
“If the computers don’t work, the printers don’t print, if the offices are crappy, if the air conditioning doesn’t work, people burn out,” says Lorenz. Nonprofits need qualified staff to keep programs running well, and staff members need a functioning work environment to do that.
Money to cover these expenses is critical, and it can encourage employees to stay with the organization, which leads to greater efficiencies and prevents the loss of institutional memory — all of which leads to greater impact.
Use data to highlight funding gaps.
“Fundamentally, what you need to understand is what gaps are you trying to cover with the general operating support?” said Karla Salazar, chief operating officer at Families in Schools, an education nonprofit in Los Angeles. To understand these costs, think strategically about how you currently cover your costs and accomplish your organization’s mission with your existing sources of revenue. This will likely require serious organizational reflection involving everyone from the board on down, so don’t expect this process to be quick.
It involves an examination of your vision, your business model, and your operations, says Oscar Cruz, chief executive of Families in Schools, which, he said, are “constantly shifting and moving.”
“You won’t be able to go through this process very sequentially,” he cautions.
A key component of this reflection is analyzing the data you have on hand, such as your 990 tax forms and metrics from previous grant reports. Some nonprofit leaders suggest applying for grants to create an advanced data collection process or to analyze a fundraising strategy.
Sometimes, however, the data you need can come from a program you run. The Alliance for Housing and Healing, for example, created a client portal to streamline the benefits-application process for the community it supports. Later, the organization discovered that the portal offered a treasure trove of information on its clients, including the frequency of their interactions with the organization and the types of services they sought.
The alliance analyzed this data to better understand which programs were most in demand and how much of each staff member’s time was spent supporting each program. The analysis helped leaders quantify how much support each program required from departments such as finance and human resources.
Families in Schools also received a grant for a readiness assessment of the organization’s plan to generate its own income. The assessment helped inform future applications for unrestricted grants because it revealed clear needs the group had.
“It was easier for me after the assessment to [make a] pitch around core support because there were very clear recommendations for what I needed,” says Cruz. For example, the readiness assessment indicated that the charity should establish consistent branding across its publications. This objective analysis gave Families in Schools the ammunition it needed to propose and win a grant to hire a graphic designer.
It takes more work upfront to establish trust with a foundation and to collect data to prove your need, but “don’t be afraid of doing it,” Cruz advises. “It’s worth it long-term.”
