Research by Grantmakers for Effective Organizations shows that many of the ways grantmakers provide financial support to grantees are actually counterproductive and can detract from nonprofits’ ability to have an impact. GEO’s upcoming publication, On the Money: The Key Financial Challenges Facing Nonprofits Today ― and How Grantmakers Can Help, explores how grantmakers both improve the situation for nonprofits and perpetuate certain problems, as well as the areas where knowledge and practice need further development. GEO will release On the Money later this month.
Addressing the financial knowledge gap between nonprofits and grantmakers
The lack of a clear and shared understanding of the nature of nonprofit finance affects both grantmakers and nonprofits. Knowledge Gaps, an excerpt from GEO’s On the Money publication, highlights some critical misperceptions. Grantmakers, for instance, often are not aware of what it actually costs nonprofits to deliver services. Grantmakers also commonly believe that nonprofit overhead expenses should be low no matter what. Such knowledge gaps point to the need for deliberate communications about what makes a nonprofit healthy. Organizations are more likely to get the support they need if they and their grantmaking partners understand what leads to nonprofit sustainability.
Also watch Money Matters, a compilation of interviews GEO conducted with nonprofit executives on the rigors of fund raising. Respondents talk about how they struggle to keep their organizations adequately funded and the cost of cumbersome application and reporting procedures.