Nonprofit Sector

Why Grantmakers Need to Break Their Restriction Habit—Permanently

April 17, 2020

Recently, hundreds of grantmakers have lifted grant restrictions to allow nonprofits to better navigate the COVID-19 health and economic crisis. "This swift, bold action will give nonprofits the freedom to focus on the things most critical to their communities and to shift resources as needed. If the benefits of operating with full support and trust are so compelling now, it begs the question: Why were the restrictions there in the first place?"

When nonprofits accommodate grantmakers' restrictions, it is often to the detriment of their missions. Restricted grants also hurt funders by creating unnecessary and meaningless work. "Restricted grants have robbed funders of real intelligence about how the field is doing and what it needs. And ultimately, nonprofits could have done more with the money funders granted to them. "

This piece illustrates how "Trust-Based Philanthropy" should be the sector’s new normal. 

Read the full article.

Author: Claire Knowlton, Director, Advisory Services, Nonprofit Finance Fund

Related Content

Nonprofit Sector Commentary

6 Ways Nonprofits Can Take Action Amid Economic Uncertainty

Nonprofit Sector Commentary

5 Ways Foundations Should Help Grantees in an Uncertain Economy

Nonprofit Sector Commentary

Nonprofit Finances Now

A look at nonprofit finances in the United States — how they’ve changed, where they stand now, and what the field needs to consider in the coming years.