Antiquated Funding Practices That Must Change to Better Support Nonprofits

Giving Compass’ Take:

• Vu Le discusses funder practices that are antiquated and putting a strain on nonprofit organizations, especially during the pandemic. 

• What can funders do to ensure they commit to these practices in the long term?

• Read how funders can help nonprofits weather coronavirus. 

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The federal stimulus bill that was just approved does allow nonprofits to apply for loans up to $10M for organizations that have fewer than 500 employees, and this fund may be converted to a grant if they keep their employees on payroll from February 15th to June 30th. See this Chronicle of Philanthropy article for more details. This is good. However, with so many nonprofits applying, and with lots of logistics to work out, many critical organizations will be left behind.

In the past two weeks, foundations have stepped up by converting their existing restricted grants to be flexible, waiving deadlines for reports, and setting up emergency response funds. Some have greatly increased their giving, and are getting money out the door fast. These are all very helpful. Thank you, funding partners, for stepping up during a time of unprecedented crises.

Unfortunately, there are still funders who remain in denial about how serious the situation is, who still insist on carrying out backwards, time-wasting, harmful practices.

Here, in no particular order, are 10 archaic and destructive funding practices that need to end now and forever:

1. Restricted funding: Many foundations have converted existing restricted grants into general operating funds. This is great. But it needs to stay this way.
2. Paper submissions: Besides the environmental impact, there’s the logistical and equity issues. Many folks don’t have printers at home while they’re in quarantine.
3. Character counts: Yes, I know we nonprofits can get very passionate and talk on and on about our missions and impact and stuff. But when you give us 1,000 characters to explain our theory of change, logic model, and evaluation strategies, we end up spending dozens of hours trying to cut down characters, whereas it will take you a few more seconds or minutes to read an extra paragraph or page.

 Read the full article about harmful funding practices by Vu Le at Nonprofit AF.