The Evelyn and Walter Haas, Jr. Fund … believe strongly in the critical importance of unrestricted general operating support because it provides nonprofit leaders with the flexibility to direct spending toward strategic priorities facing their organizations.
However, the Haas, Jr. Fund also believes there are times when general operating support may not be the most effective capacity-building strategy. Over the past seven years of the Haas Leadership Initiative, our experience has been that executive directors are often reluctant to allocate unrestricted funds to strengthening organizational leadership for a variety of reasons:
- Executive directors almost always find it difficult to prioritize longer-term staff and leadership development work when confronted with short-term programmatic needs and tight budgets.
- The “selfless” culture of nonprofit leadership discourages leaders from dedicating resources to their own development.
- Some executive directors fear that choosing to invest general support funds in leadership development could be perceived as a sign of weakness—a sign that a leader, or the board, isn’t up to the task of managing an organization and “needs help.”
John Harvey, Managing Director of Global Philanthropy with the Council on Foundations, recalled his own time as a nonprofit ED and the struggles he went through as he sought to convince himself and his board of the value of investing discretionary funds in leadership development. “A restricted grant would mean that no one—not a frugal board nor a prudent (or un-self-aware) nonprofit leader—could say no to professional development,” Harvey wrote.
The bottom line: many in philanthropy, including the Center for Effective Philanthropy, agree that large, multi-year operating support grants are critically important for nonprofits. But it seems that an increasing number also see that there are times when dedicated funding is an important complementary strategy for strengthening organizational leadership.
Excerpt of article by Linda Wood