I hope the Foundation Center is onto a real trend with its article "More Foundations Questioning Project-Based Funding Approach," posted January 8, 2008 in its PND News.
The story explains that, "a small but increasingly vocal group of foundation leaders" is advocating rethinking the all-consuming focus on accountability and measurable return on investments. Instead, they argue, funders should realize the need for long-term support of projects whose results are difficult to measure. And in close connection with this, they want to make sure that funder-imposed limitations on overhead costs don't, in the words of Thomas Tierney, chairman and co-founder of the Bridgespan Group, create "a vicious cycle that perpetually starves [organizations] of capacity."
Hurray! It's not that no one has ever made these arguments before, but the fact that they come from collective voices within the foundation world gives me cause for hope.
I've worked for nonprofits that could have been case studies in the need for long-term support and investments in overhead - namely in the immigration-services field. I remember getting blank stares whenever I told people where I worked, because helping immigrants get political asylum or work permits does nothing to bring you within the general public's eye - and that means difficulty in raising funds. So, without many sources of individual funding, we'd turn to foundations - but they'd eventually lose interest, because we were doing the same old thing year after year.
Of course, there are ways to address challenges like these - which I discuss in my book, Effective Fundraising for Nonprofits - but the bottom line is that it takes dedicated development staff to implement these. And you can't have development staff without investing in some overhead.
Yes, people are worried about lavish salaries going to fundraisers - and a few unethical organizations have apparently allowed just that - but our organization was lucky to find any development director willing to work a double-time job at low wages for more than a year. Meanwhile, back when I was still working as an attorney, I and other staff members wrote grant proposals at home, in our "spare time," which wasn't much since we all had so many clients that we'd just helplessly watch the phone messages pile up every day! (And our salaries were barely over $20,000, in the 1990s!)
Sorry, didn't mean to go off on a rant. But I'm trying to give some illustrative detail to what I believe is a problem for many nonprofit staffers, who might not be willing to talk about it because they don't want the public to think they're in financial trouble. Let's hope that the small group of foundation leaders described in the article becomes a chorus.