2022 Survey: What Funders Can Do
NFF’s 2022 State of the Nonprofit Sector Survey puts data to action by shining a light on how to advance more equitable funding practices and keep nonprofits strong for the communities that depend on them.
Practice Trust-Based Philanthropy both in actions you can take today and in making longer-term, structural changes to how you fund.
Nonprofits work to create a more resilient and equitable sector that can best deliver for our communities.
Continue the bold new ways of funding that the COVID-19 pandemic instigated and accelerated. Find and start with the actions that are relatively lower lift for your institution as you plan for bigger shifts.
- Give flexible funding (unrestricted funds, including general operating support).
- Understand and fund full costs, which are all the financial resources it takes to run an effective organization for the long haul.
- Fund for operations (technology, training, infrastructure, staff hires), all the things vital to supporting the programs you want to succeed.
- Fund organizations to have a surplus or rainy-day fund, especially as costs are rising for everything from supplies to labor. And at the least, don’t penalize nonprofits if they have a surplus or reserves.
- Fund at levels that let nonprofits pay living wages to all staff.
- Be upfront with nonprofits about whether you can provide multi-year funding. It lets the nonprofits whose work you care about focus more time on doing that work and less on worrying whether they’ll be able to pay their staff, suppliers, and landlords next year.
- When you contract with a nonprofit to provide community services, provide funding upfront—or at the very least, on time—so that organizations have the resources they need when they need them.
- Seek out and fund organizations that are led by people with relevant direct experience, and personal relationships in the communities you’re supporting. Pay particular attention to BIPOC-led, community-centered organizations that may have been excluded from traditional funding pathways. Support them yourself, whether with funding or advice, and also introduce them to others in your network who might be able to support them.
- Make nonprofits and community leaders co-designers in grantmaking initiatives; involve them in decisions on what and who to fund.
- Have and apply an informed lens as it relates to race and equity.
- Share insights from your knowledge as a funder into what other funders might look for in an effective grant proposal, how funders build new relationships with potential grantees, and other advice geared toward helping them enhance their positioning over time. Increase the available resources to deliver services and information to their targeted populations.
- Stop practices that can exclude smaller and newer organizations:
- Make funding applications easier and don’t disqualify organizations based on minor errors or omissions.
- Remove the need for requirements that may be too costly for organizations (e.g., audited financial statements). Organizations need straightforward funding requirements and fewer reporting requirements.
Change inequitable funding practices within your own institution. Be part of the solution.
We strongly encourage all foundations, investors, individual donors, and government agencies that contract with nonprofits to note the disparities in how the nonprofit funding system is supporting BIPOC-led organizations, and to take action to change that, honoring the valuable contributions of BIPOC-led organizations by providing them with the resources they need to support communities’ aspirations.
Continue exploring 2022 State of the Nonprofit Sector Survey Results
You can also take a closer look at the experiences of LA-area nonprofits.
Explore the survey brochure for more analysis, including charts and graphs of key fundings.
Resources for Equitable Funding Practices
Addressing Racially Biased Financial Analysis
Rethink common approaches to evaluating a nonprofit’s financial fitness
Catalyzing Finance for Racial Equity
New ways that CDFIs can advance health justice and better support communities
NFF thanks the Bank of America Charitable Foundation for generously supporting the 2022 State of the Nonprofit Sector Survey, and for its ongoing support of the Survey since 2010. The 2022 survey was conducted in partnership with EVITARUS and Ambit 360.