National Study of Philanthropic Practice

Posted by on December 15, 2008

Grantmakers still not making needed changes, report says

Most foundations are not making the changes that they and their grantees say are essential to supporting nonprofit success, a new survey of staffed foundations commissioned by Grantmakers for Effective Organizations finds.

The survey, Is Grantmaking Getting Smarter: A National Study of Philanthropic Practice, builds on a similar study conducted in 2003 by the Urban Institute in partnership with GEO. According to the new report, many grantmakers have not adopted practices that they admit are important for effective grantmaking.

Asked in prior interviews and focus groups which practices best help nonprofits achieve results, grantmakers and nonprofits agreed on two priority areas: improving the type of financial support grantmakers provide, such as giving more general operating support and more multiyear support; and working in a supportive and respectful relationship with grantees.

According to the report, an overwhelming majority of respondents said they are not providing the funds needed to cover the overhead costs associated with funded projects, while only 24 percent say their grants often or always include appropriate overhead. Moreover, only a third of respondents said that they regularly solicited feedback from grantees through surveys, interviews, or focus groups. On a more positive note, the survey found that foundations with staff and board members who have nonprofit experience were significantly more likely than those without any to engage in grantee-friendly practices.

“The findings were sobering in how they point to fairly slow progress among grantmakers in two key areas — the money and the relationship,” said GEO executive director Kathleen Enright. “This study shows that we still have a way to go in these two areas. That said, we were encouraged to find evidence of a movement of grantmakers who are making significant changes in their practice. Our job is to help expand that movement.”

http://www.geofunders.org/getting-smarter.aspx