RESEARCH TRIANGLE PARK, N.C. — With the flagging economy and government budget cuts leaving more people and institutions in need, funders are grappling with how to allocate their grantmaking dollars most effectively.
Within that delicate balance, a nonprofit’s alignment with a funder’s mission and priorities, and a willingness to collaborate with other nonprofits, are key considerations when selecting grantees.
That was the advice of North Carolina foundation representatives during a panel at the 2012 Philanthropy Forecast, a day-long event hosted by the Triangle chapter of the Association for Fundraising Professionals.
Internally, they said, foundations are renewing their commitment to providing flexible operating support, funding capacity-building projects and exploring public-policy work.
“One challenge we have is that there’s too much to give to,” said Michael Goodmon, who was representing the A.J. Fletcher Foundation in Raleigh. “In Durham alone, there are 2,500 nonprofits. How am I supposed to give money to that?”
Federal, state and local government budget crises have increased the needs of these nonprofits, leaving them with fewer dollars to address growing demand.
“We are blessed with significant resources,” said David Neal, board president for the Z. Smith Reynolds Foundation in Winston-Salem. “But we cannot begin to fill a billion-dollar hole. So we have to figure out what our place will be.”
Given the new environment, a “big piece of the future” of the nonprofit sector will be collaborations and mergers, said Goodmon, board member of the Fletcher Academy, a school supported by Fletcher Foundation.
The Reynolds Foundation also places value on collaboration, said Neal, who suggested that nonprofits get to know organizations and people working on similar issues in their communities.
“It’s hard for people to rise to the top if collaboration isn’t involved,” he said of nonprofits that apply for funding from the foundation.
And collaboration doesn’t apply only to nonprofits, said Lori O’Keefe, chief operating officer and vice president for philanthropic services for the Durham-based Triangle Community Foundation.
“In addition to nonprofits being more collaborative, we need to turn that lens on ourselves as funders,” she said. “I look forward to being able to have those conversations with private and corporate foundation colleagues. We need to think about how we can fill gaps more creatively.”
Neal said that, because of the increased competition for foundation grants, funders are eager to find nonprofits whose missions are aligned with the foundation’s goals and priorities.
“This question of alignment is key,” he said. “We can’t fund everything, so we have five focus areas. Any proposal that comes to us that is outside that is unlikely to rise to the top.”
The funders also will be continuing, or even increasing, capacity-building funding and flexible operating support, which allows nonprofits to use grants as they see fit rather than for particular projects identified by funders.
O’Keefe said the Triangle Community Foundation is “continuing to educate our donors on giving general support and are helping donors understand the importance of building the capacity of those organizations to deliver programs.”
Neal said the Reynolds Foundation also is committed to providing general operating grants.
“We try to give operating support to our grantees, which isn’t common in philanthropy,” he said. “I hope other funders will follow. And we’ll do our part to try to spread that gospel.”
Citing what they call the “common good,” two of the speakers said they are concerned about the implications of public policy on the state, particularly on public education.
“I have a grave concern and that is around the good of the whole rather than the good of the individual,” said Goodmon. “I think we’ve lost that concept somewhere. I wake up ticked off that we don’t have more people mad about that situation.”
The Fletcher Foundation is a major financial supporter of the East Durham Children’s Initiative, an effort that aims to boost the effectiveness of the city’s struggling public schools, and Goodmon expects the foundation’s support of that effort to continue.
Neal shares a similar concern.
“We have a history in the state of working very hard to improve public education,” he said. “We seem to have lost the will to invest in the public good and in public education. How do we rekindle that spirit?”