Why Grantmakers Need to Break Their Restriction Habit—Permanently
Originally published in Nonprofit Quarterly , 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.
Author: Claire Knowlton, Director, Advisory Services, Nonprofit Finance Fund