Nonprofit Sector

Our Strategic Innovation Fund: How Unrestricted Funding Opened Up New Ways of Working with Community-Centered Nonprofits

March 1, 2022

In 2020, MacKenzie Scott and the Ford Foundation provided substantial unrestricted grants to NFF – grants that seeded our Strategic Innovation Fund, a special pool of money we're using to support strategically aligned projects. This post spotlights one of the ways we’re using the Strategic Innovation Fund: to help fund consulting engagements with BIPOC-led and -serving nonprofits.  

It’s a familiar scenario: NFF meets a nonprofit leader doing great work in their community, excited to engage with us to together identify and pursue the financial strategies that will best support their organization’s mission. So often, these leaders are doing great work that the community values, but lose sleep over finances, because the nonprofit funding system is stacked against them.  

How do we write a business proposal for a consulting engagement that will be affordable to a nonprofit in this situation?  

Historically, we’ve worked with larger organizations that may have been able to leverage relationships with philanthropic supporters to cover the cost of our work. But today, we’re prioritizing work with community-centered organizations led by and serving people of color – organizations that have long been shut out of relationships with many large foundation funders because of structural racism.  

As we pilot new ways to work with these groups, our Strategic Innovation Fund – unrestricted funding we’ve designated to support our strategy – has given us a new option: funding a portion of the work ourselves.  

While foundation partners have long turned to NFF to help them achieve goals of strengthening grantees’ financial well-being, we are now taking an active role helping clients that are strongly aligned with our strategy to fund work that we wouldn’t otherwise be able to take on. While we can’t do this in all cases, we’re considering where we are needed most. It is energizing and satisfying to contribute in this way, and not to be completely bound to external funding constraints.  

Here are two projects the Social Innovation Fund (SIF) is making possible:   

The Black Equity Collective

The Black Equity Collective is a group of nonprofits leading social justice and racial equity efforts in Southern California. The Tarsadia Foundation is providing $200,000 over two years to support NFF’s financial coaching and consulting with BEC’s inaugural Organizational Resiliency Track cohort.  NFF is also helping to fund the work with $120,000 from the Strategic Innovation Fund. Kaci Patterson, Founder and Chief Architect of the Black Equity Collective shared in the recent announcement of our work together: 

“We’re thrilled to have the support of NFF and The Tarsadia Foundation to strengthen the long-term sustainability of Black-led and Black empowering organizations in Southern California. This flexible funding and tailored support will help high-impact, grassroots nonprofits continue to meet ongoing community needs. We all benefit from these nonprofits’ work; it is time to invest in the organizations driving racial equity.”  

Asian Pacific Islander American Financial Leadership Initiative

Asian Pacific Community Fund is focused on transforming lives and meeting the diverse needs of Asian American and Pacific Islanders (AAPIs) by building healthier communities, developing AAPI leaders, creating a stronger collaborative voice by bringing people together around shared issues, and providing the foundation for a brighter tomorrow. As partners, NFF and APCF sought funding to pilot a community-led program that includes financial consulting and participation stipends to honor the work of leaders. The program launched in fall 2021 with NFF providing $150,000 from our Strategic Innovation Fund to complement philanthropic support for the project.  APCF Executive Director Chun-Yen Chen shared:   

“We’re honored to have the support of NFF, The Long Family Foundation’s $100,000 grant, and gifts from Tarsadia Foundation, Sun Family Foundation, and Christopher Lye to strengthen the long-term sustainability of AAPI nonprofits in Southern California. With a focus on smaller nonprofits with less than $1 million annual operating budgets, we hope to strengthen these nonprofit’s financial health management capacity while understanding the strengths and challenges of their current business models and capital structures. AAPI organizations need our support now in order to meet ongoing AAPI community needs.”

A few initial takeaways as we dive into these two important projects:  

  • We are learning alongside our clients and adapting our offerings to best meet the specific needs of smaller, BIPOC-led nonprofits  

  • As we work in partnership with these nonprofit leaders, we are deepening our understanding of community strengths and challenges and broadening our range of cultural inclusivity 

  • The Strategic Innovation Fund is an important way to demonstrate new ways of working, but can’t sustain self-funding similar engagements at scale. While it is a good proving ground and learning space, we will need to use the Fund to launch sustainable and fully-funded work.  

  • Our experience has already helped grow additional ideas about how we can use the SIF to support BIPOC-led organizations and their leaders. 

It has been thrilling to be able to work with high-impact nonprofits who wouldn’t have been able to pay for our services without our ability to contribute through the Fund. We’re able to stand shoulder-to-shoulder with leaders as they strive to realize the dreams and aspirations of their communities. These experiences have allowed us to challenge our assumptions about the type of work we can take on, and to think about how we can apply our team’s experience and resources in new ways. 

We are grateful for the trust of the funders that seeded our Strategic Innovation Fund and who have partnered with us on SIF-backed projects, and for the freedom that unrestricted funds give us to better advance our racial equity mission. I’m excited to see where the SIF takes us!  

Want to learn more about NFF's advisory work? Visit the consulting page of our website.