by Hiram Wurf | Mar 17, 2015 | Donor Intent, Donor-Advised Funds, Featured |
Nonprofit general operating support gives mission-critical funding. While nonprofits often welcome program-specific support, program funding often drains other resources. Without enough unrestricted support nonprofit operations are less effective and successful. Increasingly charity associations, funders, and media advocates believe nonprofits need more general operating funds than they receive to achieve their mission. Seven Reasons Nonprofits Need General Operating Support Why do charities need unrestricted support? In many cases general operating funds not only keep the lights on – they also contribute to the effectiveness of charity program development and implementation. Here are seven reasons why nonprofits need unrestricted support. Fostering financial sustainability and capacity building; Strengthening donor and charity relationships and trust; Providing flexibility to efficiently and effectively meet charitable missions; Promoting mission-focused work using core capabilities and strengths; Permitting better long-term planning; Easing administrative burdens for charities and in some cases donors; and Establishing broad, mission-based outcome accountability. Just like other organizations, nonprofits need funding responsive to their unique needs. Donors Contributing to General Operating Support Perhaps aware of these concerns, in recent years some donors have increased their gifts for unrestricted support. One study of foundations found that from 2008 to 2014 the percentage of grant dollars going to general operating costs grew from 20% to 25%. Donor-advised fund donors often provide more unrestricted support than foundations. This may reflect a difference in giving culture. While some donor-advised funds solicit grants and have staff with program expertise focused on grants, most do not. Donor-advised fund donors tend to base grant advisement decisions on personal charitable experiences. These donors often volunteer individually or as a family at charities they...
