An ongoing issue for grantmakers is where to focus their dollars for greatest impact. Recently, it appears that more grantmaking foundations are taking another look at funding strategies to help strengthen grantees and improve their chances for longterm success. The recently released 2014 study by the organization Grantmakers for Effective Organizations highlights some interesting changes:
- General operating support is on the rise: While the median percentage of grant dollars awarded for this type of support held steady at 20 percent during the previous study years of from 2008 to 2011, it has increased to 25 percent. In addition, about 81 percent of funders report making general operating support grants. This type of unrestricted grant can give recipients great flexibility and allow them to build organizational capacity.
- Multiyear grants are an option again: For many grantees, multiyear grants became difficult to find after the recession—which can complicate planning and getting new programs off the ground, and often means that more time is spent on seeking funding and less spent on program activity itself. However, it looks like the majority of funders report (58 percent) now report making multiyear grants at least sometimes—up from 29 percent in 2011.
- Relationships with grantees are more involved: The majority of grantmakers (53 percent) seek feedback from grantees, up from 44 percent in 2011 and 36 percent in 2008. In addition, more funders seek grantee input in shaping policies, program areas of focus and strategy.
However, the report does highlight there is still room for improvement in grantmaking, specifically in the following ways:
- Collaboration: While the far majority of grantmakers believe it is important to coordinate resources and actions with other funders working on the same or similar issues, most do not support the cost of collaboration between grantees.
- Dialogue on financial issues: Foundating leaders report being more willing to discuss funding for various needs (e.g., working capital or general operating support) than their grantees report them to be.
The full report, as well as an executive summary, can be downloaded here.