As someone who has worked in development and management at nonprofits for several years, I can tell you that nonprofits were having this discussion at length well before the funding community began talking about it. And fortunately, there’s been a good amount of discussion around this. But much of the conversation around unrestricted giving has been on the funder side or from the nonprofit in isolation. As someone who has been on both sides of the coin, we wanted to share some thoughts to encourage you to make the unrestricted gift.
To start, it seems like often times funders aren’t comfortable making the unrestricted gift for two primary reasons – 1. What will they report at their board meetings if they didn’t start or save a program? 2. How will they know if their dollars were impactful and spent in alignment with their mission?
Both of these issues center on trust with the organization and its executive and volunteer leadership. If you trust that the organization’s leadership is spending each dollar for the greatest need with an understanding of sustainability, serving the population in need, and growth, then why would you also not trust them to best employ funding? They were hired for this very reason. And if your answer isn’t a resounding ‘of course we would’, then why are you funding them to begin with? Poor management is one the most common reasons for why organizations are unable to deliver.
Nonprofits recognize that funders like to hold something in their hands to show that they’re moving the needle, but it can often times be difficult to report on relatively smaller gifts, particularly when some measurements are less tangible than others. By giving a restricted gift, you force additional reporting and if not, additional, than very likely at least reformatted from what they were already going to track and produce, taking valuable staff time. And for some organizations who focus on avoidance like anti-recidivism or anti-smoking, providing a restricted gift means that nonprofits creates outputs to stand in for outcomes. Because how can a nonprofit really tell you that they’re keeping kids from smoking based on a small program, as opposed to describing their full cadre of services, and including a few representative anecdotes?
So what is the solution? We believe that funders and nonprofits need to find symbiosis where there is issue focus alignment, and where the funder supports the approach the nonprofit has taken, and not specific programs. This way, both parties can feel like they are getting what they need.
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