I recently joined a committee that funds social services projects in the city in which I live. At one of our meetings the committee was discussing setting our funding guidelines. I’ve been a part of the grant writing process for many years and have seen the result of some of the stranger and more involved funding questions.
Maybe it was just my revenge on the funders but I realised quickly that funders and nonprofits do not always speak the same language. The intention behind a funding guideline does not always translate into the intended results. Here are a couple of examples that came to my mind. I’d love to hear from you if you have any other examples.
Example #1 – Leverage
In order to receive funding a nonprofit must use a funders gift to leverage additional financial support from other funders.
Funder Intention: Their perspective on leverage is that it increases their giving power. They can say that with a gift of $500 it was turned into a gift of $1,500.
Nonprofit Result: More partners does not always equal better results. Sometimes a project is best run independent and additional partners just add cost and red tape. Many nonprofits are seeking initial funding to get the project started. This also means that they have to have a process in place to track and report to a group of funders which can mean additional work and administration. More partners does not always equal better service.
Example # 2 – Sustainable Funding
This is the concept that a nonprofit must show that they have a plan for how the project will be funded after the initial contribution runs out.
Funder Intention: The idea is that the funder is providing the start up funds for a program that the organization does not have the capacity yet to fund. They see themselves on the cutting edge of a new solution or kind of assistance.
Nonprofit Result: A nonprofit will wait until they are a year away from putting this project in their annual budget. The result is that it is not a new idea but one they have been hoping to run for a while but have been forced to put off until the organization grows to meet a sustainable funding model. This can also commit a nonprofit to a project that turns out to not work as it was originally intended.