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A New Paradigm of Funding
It's exciting to fund a specific ministry project, whether it's $25 a month to support a third world orphan or $25,000 to translate the New Testament into a new language. So
exciting, in fact, that many large foundations, as well as individuals with sizable assets, are only interested in funding projects, particularly those in the early stages of development. And
only 5% of grants by large foundations are for more than one year. The net result is that most nonprofits are starved for general operating support. This hinders them from developing the
organizational capacity needed to sustain or grow successful programs, and forces top executives to spend up to half of their time raising money.
Christine Letts, William Ryan and
Allen Grossman suggest that a new paradigm may be in order ("Virtuous Capital: What Foundations Can Learn from Venture Capitalists," Harvard Business Review March-April 1997). They
believe that donors can learn a lot from venture capitalists. What might this new model look like? Donors would be partners with nonprofits, rather than overseers. They would provide cash for
new initiatives or new organizations over an extended period of time (e.g. 5-7 years) to ensure the success and longevity of the project or organization. This would be supplemented by a wide
range of assistance, including serving on the board of directors or in an advisory capacity, coaching or mentoring the nonprofit's senior managers, and helping to raise funds for the next
stage of growth or finding new funders once their initial grant has run out.
This is the way my own giving has evolved. I guess it's because that's the way God "designed"
me. One of my passions is working with Christian difference-makers, providing them the resources they need to carry out their difference-making dreams. My involvement usually starts with
mentoring, coaching, advising, brainstorming, networking, providing connections with needed resources, advocacy, encouragement and financial assistance. In some cases, I will join their board
to provide assistance in governance and building capacity. This kind of comprehensive approach isn't for everyone, as it can be very time-consuming. But for most women and young givers, some
form of personal involvement in the organizations they support is desired - or even demanded.
The implications? I've reduced the number of organizations I give to in order to focus on
those in which I'm most involved. And although I still like the excitement of funding new projects, I recognize that this is the "easiest" money for an organization to raise. I
therefore try to provide generous support for "overhead" (which includes important things like the executive director's salary) and for important, but more mature, programs that no
longer attract substantial foundation support.
~ Karol Emmerich
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