The nonprofit world has struggled for years with the distinction donors make between mission dedicated donations (restricted funds) and funds available for overhead and administrative salaries (unrestricted). The dichotomy has grown out of the emerging belief among donors that money spent directly on mission is better spent than money “wasted” on overhead costs and administrative salaries. Studies reveal that donors “feel” better about donations when they are assured that their money has gone directly to mission outcomes.
It is true that abuses by some nefarious nonprofit management in the past lent credence to this belief. However, no nonprofit can function in an administrative vacuum, and smaller nonprofits desperately need “unrestricted” funding to add longevity and substance to their organizations.
The Ford Foundation has recognized the crisis that this understandable donor bias represents for the smaller and newer nonprofits. The foundation has established a program to provide $1 billion in grants over five years to social justice nonprofits for organizational development and support.
“Our Building Institutions and Networks (BUILD) initiative is a five-year, $1 billion investment in the long-term capacity and sustainability of up to 300 social justice organizations around the world. Our support aims to strengthen these institutions, making them more effective at achieving their core missions.”
The Way It Works
The Ford Foundation’s BUILD program has five strategic elements:
- FLEXIBLE FUNDING - Each organization benefits from five years of substantial, flexible operating support, which helps them plan for the long-term.
- ASSESSMENT TOOLS - At the beginning of their BUILD grant, all organizations undergo two kinds of assessment: a facilitated organizational assessment called the Organizational Mapping Tool, and an in-depth analysis of their finances. Both are designed to help organizations better understand and prioritize their needs in key areas like strategy, leadership, finances, and systems.
- FOCUSED STRENGTHENING - Each organization then receives additional, targeted funding to help them develop and implement an institutional strengthening plan. Organizations choose their own priority areas to bolster and develop.
- PEER LEARNING - Drawing on assessment data, BUILD connects organizations working on related issues, in similar geographies, and/or with comparable capacities. They create opportunities for them to meet, learn, and collaborate—both online and in person—helping all these organizations grow stronger together.
- RIGOROUS EVALUATION - The underlying BUILD philosophy informs all their grant making. To ensure that the organization maximizes their learning from this focused, time-bound initiative, an external partner helps identify and track learning questions and evaluate the progress as it goes forward. They seek shared learning that will be useful to the full range of organizations and networks they support, and to the philanthropic sector as a whole.
A Holistic View
You might say that The Ford Foundation has adopted a “nonjudgmental” view of social justice nonprofits. They have decided to “look beyond” the common failings of all human endeavor to the mission statements that seek to mitigate the human suffering that is the result of those “common failings”. We say, “bravo” to the Ford Foundation…and “thank you”.