By: Michael Taylor, CFRE, CEO
Writers’ introduction : Kate Gehling is senior analyst, research, at CEP. Naomi Orensten is director, research, at CEP.
This article was originally posted at https://cep.org/, and is republished by permission of the author.
For several decades now, it’s been a common refrain from funders that choose not to provide general operating support (GOS) grants: we can’t make those grants because it’s too difficult to measure and assess their impact. In CEP’s 2006 report, In Search of Impact, the majority of foundation CEOs said program grants are more effective at assessing grantee results than GOS grants. Further, half of foundation leaders in that report preferred providing program grants, most commonly because they believed it was easier to assess their outcomes.
Attitudes toward GOS are changing, as we find in our new report, New Attitudes, Old Practices: The Provision of Multiyear General Operating Support. Although this report focuses on grants that are both multiyear and GOS, our data also show that attitudes towards GOS specifically have evolved: foundation CEOs now believe program and GOS grants are equally effective at assessing foundation and grantee results. We also find that there are no common major barriers to foundations providing multiyear GOS — including measuring and assessing impact.
Yet, as we note in the report, there is a sobering disconnect between changing attitudes in the field and actual foundation practices. Many foundations today provide no multiyear GOS, and those that do only provide it to a small percentage of their grantees.
A different story emerges, though, when we look to foundations that intentionally provide more multiyear GOS than is typical. We interviewed leaders of 24 of these foundations for our study. What we heard is that one of the main values and benefits of multiyear GOS grants — in addition to building trust and stronger relationships with grantees — is that they enable foundations and grantees to achieve greater impact.
Here, we share what we learned from those interviews in the hopes that this data will help dispel the harmful myth that GOS grants are incompatible with rigorous learning and assessment.
These foundations provide GOS because it enables greater impact.
About two-thirds of the foundation leaders we interviewed say that providing GOS grants builds stronger organizations that, in turn, have greater impact. As one leader says, “The point of doing unrestricted funding is that we are trusting [grantees] to be responsive to their mission. Transitions and unpredictabilities occur. The impact that we care about is the organization’s resilience, adaptiveness, creativity, and flexibility, which all tracks back to unrestricted funding.”
Some leaders also describe how GOS contributes to greater impact through strengthening funder-grantee relationships. In their eyes, providing GOS demonstrates foundations’ trust in their grantees, which in turn leads to openness and honesty that allows funders to better understand and support grantees’ work. “General operating support engenders stronger relationships and trust that allows us to be in more honest dialogue with our grantee partners, which means we do better work because we get less hyperbole and more reality,” explains one foundation CEO.
These foundations use a variety of approaches to learn from and assess the outcomes of GOS grants.
Most frequently, the majority of foundation leaders we interviewed focus their assessment of GOS at the level of the grantee organization. These leaders find that assessment at this level helps them gain a fuller picture of a grantee’s overall effectiveness. As one describes, “The unit of change for us is the nonprofit. We demonstrate a change in capacity with the trust that, by doing so, we’ll eventually get to systems change and equity outcomes over time.”
For just under half of foundation leaders, assessment efforts are focused at the level of a field or movement. For example, some aim to create a strong infrastructure within a particular field or community, with the belief that a stronger sector enables better outcomes. As one foundation leader puts it: “Looking across our whole pool of grantees, what does the progress of that field look like? What are the barriers they’re encountering? When you think of evaluation that way, then it doesn’t really matter that much whether the grants are project grants or general operating support grants.”
More than one-third of foundation leaders say they consider programmatic outcomes in assessment of their general operating support grants. Some share that GOS, by virtue of strengthening organizations, contributes to stronger programmatic outcomes. Others underscore that assessments can focus on programmatic outcomes regardless of grant type and suggest that funders separate accounting and compliance from programmatic outcomes.
Across all of these approaches — and in line with these foundations’ focus on building trusting funder-grantee relationships — most leaders emphasize that grantees help shape their assessment efforts.
These foundations’ leaders underscore the importance of having clear expectations for assessing GOS grants and suggest reframing conversations about impact and learning.
As outlined in Making It Happen: A Conversation Guide, which accompanies the report, one of the most frequent recommendations these leaders have for their peer funders is to have clear expectations for learning and assessment. They recommend reframing conversations about impact by recognizing the complexity and limitations of measurement, rewarding grantees’ learning and innovation, and focusing on contribution over attribution.
For instance, some see the practice of tracking “dollar in and impact out” as inherently problematic or limiting. “There’s a whole lot more at play than numbers,” says one funder. “If your board expects transactional reports of what a grantee produced with your dollars, try to change the conversation,” advises another. “There’s so much more learning you can get from giving a gen-op grant.”
Another leader shares how foundations can assess their contribution to a grantee’s work with GOS:
You have to shift your mindset from attribution to contribution because if you are in the business of attribution, you fail. For example, general operating support enabled an organization to pay their staff a living wage or give them 401(k)s, which led to staff retention, and staff retention led to greater impact on the ground. Then we can say that the quality of the program has increased as a result of retention, and retention increased as a result of paying people what they deserve to be paid and providing them a retirement package.
That, to me, is as seamless of an impact story as any other.
These foundations’ leaders take issue with claims that it is uniquely challenging or impossible to assess the impact of GOS grants.
Half of the leaders we interviewed specifically took issue with claims that assessment of GOS grants is uniquely challenging or impossible, and underscore the myriad ways in which funders can approach measuring, assessing, and learning from GOS grants.
As one leader puts it:
It makes exactly zero sense to claim that it’s harder to assess impact with GOS grants. You don’t need a project grant to assess your impact. You ask [grantees] what they did, and whether it achieved the things you were looking for. Why would the grant type have anything to do with how well you can assess your impact? You gave money to an organization, and you hoped to see some set of outcomes. So, did you see the outcomes?
Clearly, these foundation leaders believe that assessing GOS grants is not only possible, but a valuable way to learn, improve, and understand how their efforts are contributing to change — all while strengthening grantees and building stronger funder-grantee relationships. In light of the compounded crises and challenges that nonprofits are currently facing, we hope that these insights, along with the findings in our research, will spur foundations to reflect on their current practices and step up to support their grantees by providing more multiyear general operating support.
For more, download New Attitudes, Old Practices: The Provision of Multiyear General Operating Support here and Making It Happen: A Conversation Guide here. You can also read profiles of five of the foundations that participated in the interviews described in this blog post in Making the Case: Foundation Leaders on the Importance of Multiyear General Operating Support here.
We welcome your comments about this post on the NPI blog.