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Funders urged to show leadership

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With no light visible in the economic tunnel, a group of grantmaking organizations is urging foundations to step up and lead.

In an open letter to its 1,700 individual members representing 350 funders, Grantmakers for Effective Organizations asks grantmakers to follow five pieces of advice:

* Hold 2009 grant budgets steady at 2008 levels, a move that could mean paying out more than 5 percent of assets.

* Look for “no-cost” ways to boost nonprofits, including releasing restrictions on current grants, and thus allowing nonprofits to react to the changing environment.

* Give grantees more flexibility to update, alter or replace programs by providing operating grants; consider providing cash-flow loans or access to credit.

* Continue making high-dollar, multi-year grants, investing in leadership support, and funding efforts to learn and evaluate.

* Engage with key stakeholders to better understand the challenges they face and how funders can help.

Grantmakers for Effective Organizations is a coalition of funders who share the goal of building strong and effective nonprofits.

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