The Road Less Traveled: Funders' Advice on the Path to Nonprofit Sustainability

by Kathleen W. Buechel; Esther Handy

Jul 1, 2007
(With apologies to Robert Frost, The Road Not Taken, 1920.) As part of the Capital Ideas symposium co-hosted by the Hauser Center for Nonprofit Organizations at Harvard University and the Nonprofit Finance Fund in March, 2007, an online survey was conducted about funder practices that support nonprofit sustainability. This article highlights the survey findings and the advice that funders offered from their own experiences as paths to greater nonprofit strength. Rather than a qualitative analysis of funding initiatives, this article presents guidance to the field from the field, as funders grappling with how best to strengthen the long term health of their grantees reflect on their works in progress. This article then goes a step further by annotating these lessons learned with the additional perspective offered from just four of the ten draft funding principles that have evolved from the Capital Ideas symposium with the hope of encouraging more funders to consider these principles and practices in their own work. The Capital Ideas survey generated 48 profiles of funding approaches, practices and strategies that support nonprofit organizational capacity building, long term financial health and or programmatic improvement. The lessons funders learned from those initiatives informed ten funding principles that were introduced at the Capital Ideas symposium on March 15, 2007 at Harvard University. Four of those draft principles, outlined below, offered concepts that resonated throughout the profiles and are offered as key steps for funders to consider as they reflect upon their own giving practices. These principles include: Understand when youre building or buying, and fund accordingly. Actively pool resources when more funds are required to achieve results. Minimize the transaction costs for grantees and funders of applying for and reporting on grants. Fund at the organizational rather than the programmatic level, even when your primary interest is in one program. This publication is Hauser Center Working Paper No. 40. The Hauser Center Working Paper Series was launched during the summer of 2000. The Series enables the Hauser Center to share with a broad audience important works-in-progress written by Hauser Center scholars and researchers.
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