Are Grants Alone the Solution to Nonprofit Sustainability?

by Sharon Gherman, FEI President/CEO

There’s a great article out in the Chronicle of Philanthropy that resonates with me: It describes a study from the Challenge Fund for Journalism concluding that grants alone were not the answer to increase the financial stability of nonprofit organizations.Even when those grants had a matching component, the boost to the nonprofit’s financial stability and long-term internal health and stability was temporary at best. As a former foundation program officer, I know that these statistics are discouraging for those with grant funds to invest and a mission to advance.

So… what DID work to bring about long-term sustainability? The solution came by continuing to invest grant funds, but at the same time encouraging nonprofits to depend less on grant money by diversifying their income and providing access to tools, training, peer support, coaching and in-depth consulting. The College Fund for Journalism’s statistics are impressive — 91% of grantees achieved their fundraising match requirements. 85% reported they had improved their organizations’ management. And 90% reported that they were able to maintain diversified revenues.

This is precisely where Funding Exchange’s programs can be valuable tools in a foundation’s basket of options for their grantees. Our webinar-based training Sustainable Pathways: Developing a Financially Healthy Organization  leads nonprofit leaders through the process of financially streamlining their organizations and developing a comprehensive two-year fundraising plan. Participants complete the training with a written report of their work ready to submit to their Board of Directors for discussion and approval.

We’re just entering year three of a three-year project partnering with the Christian Appalachian Project to build capacity in 50 West Virginia nonprofits per year. We introduce the upcoming trainings and meet nonprofit leaders at a short conference in the fall, then follow up with six months to a year of webinar training, consulting and mentoring.

If you’re a foundation officer, I’d love to visit with you about how Funding Exchange might partner with you at a very reasonable cost to build capacity in your grantees and help your investment in those organizations make a lasting difference. Please contact me at sharon at fundingexchange dot org or give me a call at 907-451-0885.

And if you’re a nonprofit leader who thinks this type of investment in your organization makes a lot of sense, please forward this post to your grant program officer and encourage them to contact us, and post this to your Facebook or LinkedIn page. Thanks!


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