Exploring the Restrictions on Unrestricted Funding: An Introduction

While I am happy to acknowledge that many foundations provide long term, unrestricted funding, a question I’ve had for a long time about philanthropy writ large still persists:

Why is it that the one thing most nonprofits say they need – multiyear, unrestricted funding – is the one thing many foundations won’t give them?

It’s not for lack of the issue being raised, that’s for sure. Indeed, as Paul Shoemaker noted recently, the need for unrestricted funding may now strike many funders as “boring or familiar.” After all, the past decade has seen a steady stream of reports, conference sessions, thought pieces, etc. that make the case for this type of support. Isn’t this old news?

But as Vu Le lays out so well, the lack of unrestricted funding in the sector is anything but old news for nonprofits that continue to struggle with the constraints of a system where project-based, short-term funding is the norm.

So, what might it take to really change philanthropic practice in this regard?

As much as I admire and support posts like Shoemaker’s and Le’s, and the advocacy of groups like The National Committee for Responsive Philanthropy, The Center for Effective Philanthropy, and Grantmakers for Effective Organizations, it seems to me the answer isn’t to just keep producing more reports that make the same kind of logical arguments about the value of unrestricted funding (though I acknowledge it’s important to keep this line of advocacy up).

I think we also need to start having more open conversations about several things that get in the way of making unrestricted funding the norm, not the exception, such as:

• Power dynamics and the need for control
• Ego
• Dating vs Long-Term Commitment
• Trust
• The role of staff at foundations
• Project funding primarily serves the needs of foundations rather than the organizations and communities they aim to support

In the weeks ahead I want to reflect on each one of these issues in a way that I hope opens new channels of conversation about the barriers to funding in a more trusting, relationship-based, and effective way. And if you have any thoughts on issues you want to see raised, please don’t be shy in sharing them.