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GEO's General Operating Support Action Guide

What is general operating support? How are grantmakers providing it? GEO's answer to these questions (and more) were inspired by a spirited conversation that took place in early 2007 on the GEO listserv. In this document, we have included quotations from this discussion, as well as anecdotal information from participating grantmakers who shared their experiences and insights.

We hope this resource proves useful for your organization as you weigh the case for general operating support and decide how to proceed. Please let us know how we can support you in this important work.

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Read the press release.

Master the Basics
Grantmakers can go a long way in supporting the effectiveness of their grantees to achieve their missions. Providing general operating support is one of the most powerful ways to do so. General Operating Support Action Guide and Listen, Learn, Lead are excellent starting points for anyone who is looking to master the basics.

Additionally, the resources below can help you make the case for providing general operating support.

Contents:

Make the Case: Recommended Reading
If you've got a limited amount of time, here's what you need to know.

Make it Work: Who's Done It?
Here are examples of GEO members who are walking the talk.

How Do You Evaluate It?
These foundations offer their experience on evaluating operating support.

More On Operating Support
Still need more to go on?

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General Operating Support: A GEO Action Guide

Published by GEO, 2007, 44 pages.

To request your hardcopy today, please email web@geofunders.org or call 202.898.1840.

LISTEN, LEARN, LEAD: Grantmaker Practices that Support Nonprofit Results reports on Phase 1 of GEO's Change Agent Project. This report delves deeper into what is necessary to instill change in grantmaking practices to ensure nonprofit success.

Make the Case: Recommended Reading

The Looking-Glass World of Nonprofit Money: Managing in For-Profits' Shadow Universe
Clara Miller challenges readers to look at the rules of money and finance that govern the nonprofit sector in comparison to those in the for-profit sector.
Our own worst enemy
For decades, the nonprofit sector has colluded to perpetuate an enormous myth that effective programs can be run without investing in overhead and infrastructure. This Nonprofit Times column by Kathleen Enright speaks out in support of covering nonprofits' overhead costs. (NonProfit Times, 15 August 2003)
In "Smart Money: General Operating Grants Can Be Strategic," Paul Brest (current CEO of the Hewlett Foundation) makes a strong case for balancing nonprofit and grantmaker interests resulting in increased operating support for nonprofits. (Stanford Social Innovation Review, Winter 2003.)
Getting What We Pay For: Low Overhead Limits Nonprofit Effectiveness from the Nonprofit Overhead Cost Project.

Recently added >>

Stirring the Pot — key points from the GEO members-only listserv conversation about general operating support.
Reflections on TCWF's Responsive Grantmaking Program summarizes an external assessment of the first 30 months of the foundation's efforts to award more grants for core operating support.
Save the Children (But Pay the Bills, Too)
2006 Wall Streeet Journal article says spending money on overhead isn't such a bad thing.

Make It Work: Who's Done It?

Nationwide, Foundation Center research indicates a slow increase in operating support over the last many years:

Read the Foundation Center's report, Foundation Giving Trends: Update on Funding Priorities (2007 Edition) >>

The following grantmakers are just some of those who have shifted their grantmaking strategies to mostly or even all operating support.

The F.B. Heron Foundation
Learn why the F.B. Heron Foundation has given 75 percent of its grant dollars to general operating support since its inception.
Philadelphia Foundation
Read how this community foundation chose to adopt grantmaking practices that build the capacity of the region's nonprofits and attract new leaders.
The California Wellness Foundation
In 2000, The California Wellness Foundation decided to focus on giving general operating support to grantees. Guided by the premise that "individuals and organizations that work on the front line know best how resources need to be allocated to improve the health of the diverse populations in California," the strategy has allowed the foundation to be more responsive to the needs of grantees. More than half the foundation's grant dollars cover general operating support. See also:
- Good to the Core, by Gary Yates, former TWCF CEO, writes about their decision for Foundation News and Commentary, July/August 2001.
- Reflections on TCWF's Responsive Grantmaking Program summarizes an external assessment of the first thirty months of the foundation's efforts to award more grants for core operating support.

How Do You Evaluate It?

Providing general operating support doesn't mean relinquishing expectations for results. Far from it.

Getting the Most out of General Operating Support Grants
It is no secret that many funders shy away from making general operating support grants. One of the reasons for this hesitancy is the perception that it is difficult to measure the impact of these grants. According to Ruth Brousseau (formerly of The California Wellness Foundation), that perception is wrong. TCWF evaluates the results of its operating support grants in the same way that it measures other grants.
Evaluating General Operating Support Grants describes The Edna McConnell Clark Foundation's experience evaluating general operating support grants.

More on Operating Support

Stirring the Pot: Grantmaker Viewpoints on General Operating Support Grants
In January 2007, GEO members discussed overhead rates and operating support on the members-only listserv. A GEO member asked Lucy Bernholtz of Blueprint Research & Design to prepare a summary of key points from the discussion and then share the results with GEO.
A Call to Action: Organizing to Increase the Effectiveness and Impact of Foundation Grantmaking
The National Committee for Responsive Philanthropy calls for grantmakers to commit 50 percent of their grants and grant dollars to operating support and explains why such a commitment is badly needed.
- See also their 2003 study, The Core of the Matter: NCRP's First Convening on the Need to Increase Nonprofit Core Operating Support
In Search of Impact: Practices and Perceptions in Foundations' Provision of Program and Operating Grants to Nonprofits
Published by the Center for Effective Philanthropy, this report outlines why grantmakers who want to maximize the impact of nonprofit results should provide larger, longer term operating support grants.
- Paul Shoemaker, Social Venture Partners Seattle executive director and GEO board member, responds to this report on CEP's Web site.
General Operating Support: Research on Grantmaker Policies and Practices
The findings by the Institute for Nonprofit Organization Management at USF challenge the conventional wisdom that few foundations make General Operating Support grants.
Building Value Together's Guidelines for Funding of Nonprofit Organizations, onto which many organizations, including GEO and Independent sector have "signed on," promotes practices by both foundations and nonprofit organizations that lead to enhanced results. Fall 2003.
At Issue: Project vs Operating Support — Which is the Better Strategy?
The question of general operating support revolves around whether to concentrate on specifics, or to focus more on grants that support the overall work of a grantee organization.

"General operating support grants are a way that a foundation can more easily advance a long-term agenda, support a select number of organizations that are key to their strategic priorities, and help new organizations gain the capacity to be more self-sufficient. Particularly when made as a multi-year grant, general operating support grants can permit nonprofits to take risks."

General Operating Support: Research on Grantmaker Policies and Practices, Institute for Nonprofit Organization Management, University of San Francisco, December 2006