Small funders have a limited amount of grantmaking capacity and, to be impactful, must think about how to use those funds strategically to help their key nonprofit partners become more stable and proficient. This requires the funder to develop a more familiar relationship with the grantee—understanding its strengths, weaknesses, opportunities, and threats—and be prepared to provide technical assistance (directly or through qualified consultants) as needed. This is particularly important in small rural communities that have fewer nonprofit agencies to work through.
For nine years, I served in a professional grantmaking role at a community foundation that had a five-county footprint. Our core county was flush with nonprofit agencies and resources, but three of our four outlying counties had much less to work with. In some cases, a single rural county nonprofit had many identities (e.g., food pantry, utility bill assistance, mental health service referrals, substance abuse treatment, transportation assistance, domestic violence intervention, and emergency housing).
In underserved rural communities, using philanthropic resources strategically must include organizational development and capacity building of “multi-role nonprofits” that act as social services clearinghouses and safety nets. As community dependence on these “multi-roles” increases, such nonprofits must be in position to make well-informed decisions in the boardroom, to create partnerships, to have a reliable source of core operating dollars so grant dollars can be dedicated to strategic needs, and to make a case for support that will inspire donors who want their contributions to have a perceptible impact.
Unfortunately, many nonprofits do not evolve effectively. Perhaps the board composition does not change much from the “founding group” profile, despite the need for more influential relationships and expertise within the governing structure. The organization may be too dependent on grant dollars to sustain itself, as opposed to cultivating an engaged and supportive individual donor base to provide for its core operating needs. The agency may lean too much on a “charitable appeal” strategy for resource development, as opposed to developing a compelling case for support that is undergirded with a solid evaluation process.
Grant + care strategy
I met a gentleman who is building a private foundation in a part of rural Arkansas with very little philanthropic capacity. He is a visionary person who sees innovative approaches to community problems in other parts of the country, and thinks about how those ideas could be implemented (at a smaller scale) in his area. It would require him to help some existing agencies in his community to get stronger and more proficient in all aspects of nonprofit operations. It would require what I like to call a “grant + care” approach, which bundles technical assistance with traditional grant awards. A small funder trying to make an impact in an underserved community cannot accomplish much deploying modest amounts of financial support through under-developed nonprofit partners. It’s like throwing seeds on unplowed ground.
Funders can certainly engage an appropriately qualified consultant to help their grantees evolve into more effective organizations, but they can also work with their area nonprofit association to accomplish this. I spent seven years providing training and technical assistance to nonprofits through the Nonprofit Resource Center of Alabama (now known as the Alabama Association of Nonprofits); most states have a similar organization.
Are you “plowing the ground” to help your nonprofit partners become better positioned to leverage limited grant dollars into something bigger?
James P. McCrary is a philanthropic consultant based in Birmingham, AL. He has over 24 years of professional experience in the nonprofit sector, including eight years (three years as executive director) with a statewide health foundation, seven years with a statewide organization providing education and technical assistant to nonprofits, and nine years of grantmaking work at the largest community foundation in Alabama. He has also been an active volunteer in the community, serving in leadership roles on numerous nonprofit boards.