Grantmakers can invest in the health, growth and effectiveness of their nonprofit partners by providing them with general operating support, in addition to or instead of more restricted program or capital support. Recently, the National Committee for Responsive Philanthropy (NCRP) took a close look at national trends in general support in their research brief The State of General Operating Support (PDF). NCRP compared the latest available data on a sample of 906 large grantmakers’ average giving from 2008-2010 to a previous 2004-2006 sample. It found that foundation giving to support the general operations of nonprofits increased through the recent recession, but the share of foundation dollars classified as providing this vital type of funding remains the same, at about 16 percent.
Here in Minnesota, grant dollars dedicated to general support tend to be higher than the national average. In 2010, general support received 20 percent of Minnesota grant dollars. Program support garnered 62 percent and capital support 9 percent. (Student Aid and Other Support received the remaining 7 percent of grant dollars.)
But general support has not grown as quickly as program support in recent years. Program and general support both remained steady during the height of the recession in 2008 and 2009, but program support increased sharply while general support dipped slightly in 2010 (see Figure A). Capital support, which decreased in 2008 and 2009, increased in 2010, primarily because of the Minnesota Orchestral Association’s capital campaign.
Why General Operating Support?
NCRP articulates five benefits to providing general support to nonprofits:
- It provides flexibility to meet pressing community needs and achieve impact.
- It eases administrative burdens for grantmaker and grantee alike.
- It contributes to nonprofit sustainability and capacity building.
- It signals trust between the funder and grantee without sacrificing accountability.
- It shifts attention from limited program outcomes to broader organizational and social impact.
Learn More: A detailed overview of support type giving in Minnesota – and information on many other trends in giving – is available in Giving in Minnesota, 2012 Edition.
-Anne Bauers, MCF research manager