Yes! Funders Can Prove General Operating Grants Have Impact (and Grantees Can Help): Part 1


By Anna Pond

Principal, Anna Pond Consulting

Editor’s Note: Today we’re pleased to bring you the first installment of a two-part blog series by Anna Pond, who manages a number of evaluation-focused projects for us in her consulting role. Anna writes compellingly about the value of general operating grants—and she’s got the research to back it up! 

I’ll never forget the day I secured my first general operating grant.

I was a young, over-my-head development director for an immigrant rights nonprofit, and yes, we partied hard once we received the news.

Getting unrestricted foundation funding was like winning the lottery. Chances were slim but oh, how glorious to be given foundation money with fewer strings attached.

As an organization serving Central American political asylees constantly imperiled by roller coaster attitudes toward immigrants, we had to be nimble to help families from being ripped apart. Flexible funding really helped us stay on mission. Of course, many organizations have similar stories (including immigrant rights ones today, but I digress).

Since starting on the grant-receiving end, I’ve worked as a program officer in philanthropy, and now I consult to foundations. And still, more than 20 years later, I hear funders debate the value of general operating grants.

I’m not saying general operating grants are right for every funder. Nor am I suggesting funders can’t make smart program-specific grants. I just think it’s time to disabuse philanthropy of a notion that keeps some foundations from making general operating grants. I’m certain you’ve heard some form of the following uttered:

We can’t fund general operating support because there’s no way to really track its impact. Grantees don’t even know how they use it, so how can it make a difference?  

Truth is, grantees do know. And grantees can play a major role in helping funders assess the value of general operating support. I’ll use the Robert Sterling Clark Foundation as an example.

About four years ago I started working with RSCF to design a logic model to demonstrate the impact of its grantmaking practice. The foundation’s staff and board had already drunk the KoolAid of the value of general operating funding. But they still wanted to know, is there any way to reflect on the impact of this type of grantmaking on our grantees?

It’s fair for foundations to ask where their grant investment goes and if it does anything – whatever their reasons for asking. Here’s how we approached RSCF’s question.

We Laid Evaluation Groundwork with Grantees

We started out by developing the foundation’s basic theory of action (a mashup between a theory of change and logic model). This outlines what RSCF does as a funder and what it expects to have happen as a result. Then we implemented some assessment methods to determine if, in fact, the foundation’s work with grantees was achieving those intended results.

Pretty early on, we brought in grantees to make the theory and assessment methods relevant to their experience. That was after rolling out an assessment that didn’t provide good data largely because grantees found it irrelevant and cumbersome (as well as capacity draining, basically the opposite of what the foundation was trying to accomplish with general operating support). Long story short, after including grantees in the assessment and design, we ended up with RSCF’s current grantmaking evaluation theory and methods.

We Got Technical Without Losing Sight of Foundation Values

We worked directly with grantees to design a tool that would gather direct evidence of general operating support impact. That’s when we brought in an independent evaluator with not just technical expertise, but also who believes subjects (grantees in our world) should participate in evaluation well beyond being probed for information. Her name, by the way, is Meredith Reitman. She’s an impeccable researcher and an awesome human being.

We Designed and Tested the FFIS with Grantees

On behalf of the foundation, Meredith and I worked with a group of grantee volunteers to create what we call the Flexible Funding Impact Survey (FFIS) LINK.

RSCF’s theory of change connects flexible funding (aka general operating support) to organizational capacity building. The theory’s gist: when given the flexibility to use multi-year grants as they choose, nonprofits (leadership-focused ones in RSCF’s case) will make smart investments that strengthen their organizations.

Our grantee volunteers took this one step further. While flexible funding allows grantees to spend the money in whatever way they want, they told us flexible funds often get deployed to shore up one or more of the following five underfunded capacity areas: 1) program quality, 2) workplace culture and managing personnel, 3) experimentation, learning, and adaptation, 4) mission/financial alignment, and 5) equity and inclusion.

We then designed questions that examined where grantees invested RSCF dollars within one or more of those five areas and how that impacted their capacity. (Note: we created space for grantees to add and describe other areas where they used RSCF funds too).

What did the results reveal? Stay tuned for Part 2, coming soon!