Using Multiyear Funding to Supercharge Your Grantmaking

Multi-year funding—support that funders commit to upfront for multiple years—is a key to strengthening nonprofit effectiveness, capacity, and impact. These grants guarantee income streams, lessening the time grantees need to fundraise so they can better carry out their missions. When many foundations are cutting grant budgets and reducing the number of their grantees, committing scarce funds over a longer time frame is particularly valuable.

Exponent Philanthropy members recognize the value of multi-year grants in supporting a range of activities. Says Brigitte Lehner Kingsbury of the Orchard Foundation in Maine:

“Ask yourself of a potential grant request, ‘Do you think this can be done in one year?’ If it can’t, why not commit?”

7 Key Benefits of Multiyear Funding

The sector has long recognized the benefits of multiyear funding, including its usefulness in:

1. Fulfilling specific goals
2. Attracting additional funding
3. Building grantee capacity
4. Funding advocacy
5. Reducing administrative burdens
6. Accelerating equity
7. Supporting new ventures

Note: Multiyear funding is particularly valuable when coupled with general operating support.

1. Fulfilling Specific Goals

Consider how long it will take for you and your grantee partners to achieve your desired goals. For many funders, the intended impact can take several years, a decade, or even more. Offering multiyear funding gives grantees a sense of security. It allows them to look ahead to longer-term goals and plan accordingly.

David Greco of All Stars Helping Kids in California wrote in a blog:

“If you’re an investor, do you just give one year of funding and walk away? No. You recognize investments take time.”

2. Attracting Additional Funding

Many funders are unaware that earned income, as well as government payments and grants, are the top two revenue sources for nonprofits. Sometimes, a multi-year commitment is necessary for a grantee to attract funding from a government agency that wants to see if the private sector validates and supports the project.

Multiyear funding can serve as a robust seal of approval, helping grantees attract additional public and private support. The Council on Foundations says that grantees can record promised funds as assets on their financial statements. This demonstrates increased financial strength, positioning them better to attract new donors or leverage dollars through matching gifts or other programs.

3. Building Grantee Capacity

GrantCraft defines capacity building as “both a verb (the action of building effectiveness, often by improving specific organizational capacities such as infrastructure, operations, financial health, and programs) and a noun (the results of increased attention to effectiveness).”

Since multi-year grants provide support for several years, they are well-suited to building grantee capacity, which understandably takes time. Foundations that fund capacity-building activities recognize that grantees are more likely to achieve desired outcomes if their boards, staff, operations, and facilities are robust.

4. Funding Advocacy

Influencing policy takes years of consistent effort. While legislative victories may seem swift, they often require years of groundwork and several attempts, including failures.

Sean Dobson wrote in an NCRP article:

“The campaigns I ran for an advocacy nonprofit rarely concluded in one year – victory or defeat could only be determined after several years, and defeat usually had positive benefits for the organization because the act of waging a campaign brought in new members, new funders, more publicity, more contacts, more experience, and more knowledge.”

Effective advocacy requires that foundations not arrive at a policy conversation at the last minute. Building long-standing and sustainable relationships with policymakers and their staff takes time and patience.

Get Our Advocacy Field Guide for Lean Funders

5. Reducing Administrative Burdens

The hours a nonprofit spends applying for and reporting on grants can add up to thousands of dollars each year. Multiyear grants lessen the time and labor grantees spend applying for and reporting on grants, as well as the time and labor funders spend reviewing grant applications and reports. Thus, you can support projects without having to review new proposals or enter into new grant agreements with the same grantee each year.

6. Accelerating Equity

Nonprofit Finance Fund’s 2022 State of the Nonprofit Sector Survey found that 82% of BIPOC-led organizations said achieving long-term financial sustainability was their most significant economic challenge. ABFE’s The Case for Funding Black-Led Social Change affirms that Black-led organizational leaders have long called for unrestricted, multi-year funding. However, they often receive low-dollar, one-year, program-restricted funding that is administratively burdensome, thereby robbing program delivery of time and impact.

Multi-year, flexible funding is a significant accelerator of equitable grantmakingand a key entry point for funders who want to share power with grantees.

7. Supporting New Ventures

When funders commit to new ventures—whether an organization, project, or leader—it’s an inherently risky business that can yield gratifying results, foundations generally fund startups for three to five years, with the possibility of an extension, as most new organizations require a long-term grant to get off the ground.

Scott Brazda of the Stuller Family Foundation in Louisiana says:

“Multiyear grants allow new projects time to develop and take root, giving them a better chance of succeeding.”

Multiyear Grants at Lean Foundations

Multiyear funding remains underutilized across lean foundations, according to findings from the 2025 Foundation Operations and Management Report.

Despite the long-term stability and flexibility that multiyear grants provide, only:

• 28% of participating foundations offered multiyear general operating support,
• 37% provided multiyear project-specific support, and
• 13% extended multiyear capacity-building grants.

General Operating Support Grants

On average, these grants accounted for 31% of total grant budgets, with 15 grants awarded per foundation. The typical multiyear general operating grant was $56,587 over 3 years.

Project-Specific Grants

These were the most frequently awarded multiyear grants. Among participating foundations, 37% made project-specific grants, which accounted for 31% of the total grant budgets. On average, foundations awarded 10 grants, each valued at $84,974, typically spanning three years.

Capacity-Building Grants

Although less common, capacity-building grants accounted for 25% of total grant budgets among the 13% of foundations that offered them. Foundations awarded an average of 9 grants, each totaling approximately $74,323, over a period of 4 years.

Learn How Multiyear Grantmaking Varies by Foundation Size, Type and More »

How to Start Giving Multiyear Funding

Some foundations initiate the idea of a multiyear grant. Others respond to such proposals from grantees or use both approaches.

Regardless, the more familiar a foundation is with a grantee, the more likely it is to consider giving it multi-year support. But if you fund dozens or hundreds of organizations, where do you begin?

First, consider your mission and grantmaking objectives. Which of your grantees most aligns with your goals? Which has the most significant potential to meet those shared goals? And which keeps in touch with you the most?

Next, could you schedule some time to talk with key grantees? To help set expectations for a candid conversation, could you say that your foundation is not making grants immediately but rather taking time to listen, learn, and refine its grantmaking?

Meet with leaders and staff to gain a deeper understanding of their roles and responsibilities, the challenges they face, and what they can accomplish with the proper support. This will uncover exciting opportunities to make a difference with the multiyear backing.

Standard Multiyear Funding Practices Among Lean Funders

When making multiyear grants, our members tend to:

• Select organizations that closely align with their mission and goals.
• Limit multiyear grants to organizations they supported previously.
• Devote less than 40% of total grantmaking dollars in one year to multiyear support (although some devote most of their grant dollars to multiyear support).
• Favor organizations that have strong leaders whom they know well.
• Favor organizations whose leaders and program staff will remain in place for several years.
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• Commit for 2, 3, or 4 years.
• Require reports every year.

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About the Author

Hannah Smith manages editorial content and publications at Exponent Philanthropy.