August 16, 2022
How many times have you heard fundraising advice along the lines of: “Grant proposals that are focused on a specific project or program are more compelling than those requesting general support.” Or: “Foundations want to support programs, not overhead!”
If you have worked in nonprofit leadership, development, or an adjacent role for any measure of time, I am certain that the answer is likely more than you can count!
In recent years, the team at Elevate has observed key trends in the types of grants our clients are winning. We had a hunch that our nonprofit partners were securing more general operating support dollars each year, and that grantmakers are warming to the idea of providing general operating support. And we saw the think pieces; read any listicle on the “top trends in grantmaking” and you’ll undoubtedly see increased general operating support and trust-based philanthropy on top of the list.
Still, we wondered what our own data would reveal. Are Elevate clients winning more general operating support or programmatic grants? How does the amount of grant revenue they secure compare between the two? And is it possible to secure general operating support from a new funding partner, or should we only ask our existing donors for general operating support? So we rolled up our sleeves, typed in our two-factor authentication codes, and dug into our trusty Salesforce database for the answers.
We looked at the overall win rate – the grants secured compared to the total number of grants submitted – for both general operating support and for program support for the two-and-a-half year period from January 1, 2020 to June 30, 2022. During that period, our clients submitted a total of 6,229 proposals. The win rate for general operating support grants was 72.2% (for every 100 grants submitted, 72 were won), whereas the win rate for program support was 66.8%. While this may seem modest, we actually ran a chi-square test to ensure that these results were statistically significant (p < .0001), and not due to random variation. The findings were clear: there are real differences in win rate by request type.
After examining the above, we wondered whether the result would be different if we broke the opportunities apart by new versus renewal opportunities. An opportunity would be considered “new” if it is one that the organization has never applied to in the past, and a renewal opportunity is a grant they have secured in previous years. Generally, a grantee has a much higher likelihood of securing a renewal grant than a new one. (You already know this if you read our two-part blog on How to Predict the Future!) But we wondered about the likelihood of securing a new grant for General Operating Support.
Interestingly, our findings held true for both new and renewal opportunities. For renewal grant opportunities, the win rate for General Operating Support requests was 92.2%, slightly higher than the win rate for program requests at 87.8%. For new grant opportunities, the win rate for General Operating Support requests was 54.3%, and the win rate for program requests was 47.1%.
While the data around win rates is very compelling, we also wondered about the total grant dollars our nonprofit partners secure that is designated as general operating support versus program-restricted funding. Interestingly, for the same set of opportunities that resulted in the win rates in findings #1 and #2 above, our clients secured roughly $370.3 million in programmatic support, as compared with $169.8 million in general operating support – less than half of the total amount of programmatic funding won!
While win rates may be higher for general operating support grants, the opportunity to request this type of flexible support is not the norm. Our data set revealed that Elevate clients had nearly 25% more opportunities to request program support than they had opportunities to ask for general operating support.
Our analysis shows how important general operating support is to a holistic grant strategy. And, it shows how our nonprofit clients are both empowered to ask for what they most need, and able to find true philanthropic partners willing to invest in the sustainability and capacity of their organizations.
Still, across the board, foundations invest more dollars in programs than in the operations of their grantees. We view this as a fundamental problem facing our sector today: many philanthropists are unwilling to invest in the necessary infrastructure of nonprofits. And as any nonprofit leader knows all too well, without unrestricted funding to invest in staff, technology, capacity building, anti-racism work, and unanticipated opportunities, nonprofits are hamstrung, unable to innovate or act swiftly to serve their community or constituents when the need arises.
The bottom line is that general operating support is essential to the success of the nonprofit sector. Organizations need flexible funding that they can leverage as needed to advance their missions. And they need more funding partners who are willing to trust nonprofit leaders and invest in organizations in a way that allows them to do their work.
We are hopeful: the data is pointing in the right direction. And, philanthropy must continue to invest even more unrestricted resources in the nonprofits doing the meaningful work of social change.
Elevate uses Salesforce to log thousands of grant opportunities each year across our nearly 100 nonprofit partners. We track information related to which grants are secured and which are lost, how much funding is requested and awarded, whether each grant is for a specific program area or for operating support, and much much more. The results described here come from thousands of data points across all of Elevate’s nonprofit partners. We love data!