Working capital

Foundations should put money where charities need it.

By Todd Cohen

[04.14.04] — Poor vision is hurting charity.

The charitable marketplace works best when supply and demand are in sync.

But many funders cannot see beyond the philanthropically correct mark they want to make with their funding.

And many charities are bent on telling funders exactly what they want to hear.

In a self-defeating cycle that will not come to grips with charities’ critical internal needs, grants tilt to programs, not operations.

Funders push their pet priorities, and charities gear their programs to those priorities.

Missing in action is a shared vision that addresses charities’ need to cover the ongoing cost of doing business, a cost that fuels a never-ending hunt for cash.

To better match charitable supply and demand, Independent Sector has backed a call by charitable leaders for funders to target more dollars for overhead, and for charities to justify those dollars through more effective operations.

More operating grants and smarter operations will make the exchange of charitable dollars and know-how more productive in the long run.

By investing more in operations up-front, funders and charities can better focus long-term investment of time and effort on their shared goal of addressing our most urgent social problems.

Todd Cohen is the Editor and Publisher of the Philanthropy Journal.

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