General Operating Support

In pursuing general operating support grants, you can improve your chances of success by taking the following actions. Focus on results.

To persuade a funder to provide operating support, you should explain what they can accomplish with unrestricted funds.  It is not enough to tell funders that your organization will "run more smoothly" with operating support.  Instead, be specific about what the money will accomplish, for example by saying that "client intake time will be reduced from four hours to one hour" or "student retention in programs will increase by 20 percent.''

You should also create an operating plan that covers more than just revenue and expense projections.  The plan should detail short- and long-term measures of success and the steps needed to get there.  This type of document also helps you in discussions with funders that have a business background.  People who have created wealth have often done so in an entrepreneurial way, and they might like to support nonprofit organizations that think and act like them.

Stress the benefits of operating support.

You should tell funders why nonprofit organizations prefer operating support.  Among the reasons they typically offer are:  Such support gives your organization more flexibility to spend money where it is needed most, and it enables you to make your organization stronger by improving governance, administration, or staffing.  It also eases fundraising pressure, which reduces burnout and allows your staff and board to focus on your organization's mission. Unrestricted support also fosters innovation and risk-taking.

Spell out administrative costs.

You might be able to do a better job of getting at least some operating costs covered by grants, including a portion of administrative and other general costs, in your grant proposals for specific projects.  Nonprofits can be their own worst enemy in the conversation about operating support because they don't fully account for the cost of running a program in the grants they write.  Too frequently, new program grants end up hollowing out a nonprofit's capacity because the programs require more money to run than the amount they receive.

Don't compromise.

Too often nonprofit organizations meekly accept whatever a funder gives them, even if it doesn't match their needs.  For example, if you determine that it will cost $1,000 per client to accomplish a specific goal, and the funder says that it believes the same result can be obtained with $500 per client, you will often accept the grant and try to figure out a way to retool the program.  Instead, you need to go back and tell the funder you need to adjust your outcomes.

You can challenge the implicit assumption at some funders that people who want to do good for others should be willing to go without reasonable salaries or adequate office space. Accepting the status quo drives skilled staff away and hurts organizations.  This is not about proving sainthood.  The question is - How do you build a nonprofit organization that can consistently provide services?

Seek multiple donors.

Because so many funders want you to show that your organization won't become totally dependent on general operating support grants, you should pursue unrestricted donations from as many funders as possible.

Be persistent.

Keep applying, even after multiple rejections.  Funders sometimes approve grant requests on your organization's fifth, sixth, or seventh attempt.

Recent grants received by our clients include:

$45,000 for an agency providing courtroom advocacy for abused and neglected children - for general operating expenses

$40,000 (2 grants of $20,000 each) for an organization providing services to children and adults with developmental disabilities - for general operating expenses

$15,700 for an agency providing an array of services for low-income people - for general operating expenses

$15,000 for a homeless shelter - for expansion of the facility

The topic of our next blog on Tuesday, February 21st, will be “Grant Writing Problems.”

Murray Covens, Principal

North Texas Nonprofit Resources