Human Services / Nonprofit Sector

Here’s What Happened When We Gave Flexible Capital to Small Nonprofits

General Operating Support for COVID-19 Relief and Recovery

The grant money was put to many uses: It funded a client’s car repairs so she could keep her job and feed her family. It helped a man exiting prison get back on his feet, and funded another man’s burial costs. It kept nonprofit staff employed through the initial months of coronavirus lockdown and provided the resources to make their programs virtual. It paid the rent at a crucial moment for nonprofits and their clients alike. It even helped one organization convince a local funder to simplify its grant application process.

With the country locked down in the face of the COVID-19 pandemic in late March 2020, a $250,000 grant allowed Nonprofit Finance Fund (NFF) to launch a unique fund to provide money to nonprofits with no strings attached. These general operating support grants proved a powerful tool for nonprofits as they adapted to the realities of the pandemic and continued to support their clients.

COVID-19 was “a punch in the throat,” said Rev. Mark Gaskins, Co-Founder and Board Chair, The Village Method. The nonprofit provides after-school and distance learning programs that connect African American youth and their families with local businesses, government, cultural institutions, and support services to create a holistic cycle where students progress to college and careers and return to give back to their community. When schools closed, The Village Method saw a significant loss in funding to provide on-site services. The grant from NFF helped the organization to bring on contractors to continue services. “Any bit of money is going to be helpful, especially if there are no strings attached,” Gaskins said.

When NFF received the $250,000 grant from the Fidelity Charitable Trustees’ Initiative for COVID-19 relief and recovery efforts, we used it to launch a flexible capital fund aligning with our strategy and trust-based philanthropy principles like simplifying paperwork and keeping communications open, honest, and transparent. We made general operating support grants to community-centered organizations led by and serving people of color, focusing on nonprofits with operating budgets of less than $1 million – those who would have been mostly overlooked in initial COVID-19 recovery programs. (Including by us – at the time we had just begun stewarding a no-interest loan fund for nonprofits with minimum annual operating revenues of $750,000.) In those early days of the pandemic, we hoped the funds would help organizations serve their communities through the next three months.

Members of Institute of Music for Children's Summer Arts Camp, during which students help to build and maintain a creative, caring community. Photo by Jo Hayes Photography
Members of Institute of Music for Children's Summer Arts Camp, during which students help to build and maintain a creative, caring community. Photo by Jo Hayes Photography.

“It came at a critical time,” said Lakshmi Sridaran, Executive Director, South Asian Americans Leading Together (SAALT). “While other foundations were figuring out what to do, it was generous of NFF to give a grant without a ton of stipulations. We were able at the end of May to bring on a policy professional, who now directs and leads SAALT’s policy advocacy.”

The project was overseen by NFF’s recently formed Social Innovation and Equity Council (SIEC) and sought to exemplify the trust-based philanthropy approach. To make the process easier for nonprofits, we reduced the paperwork required to just a W-9 and contact information and asked for only a 15-minute interview six months after receiving the funds so we could document the grant’s impact.

We looked to NFFers that had existing relationships with nonprofits to act as program officers in a streamlined process to get the money out promptly. Staff quickly submitted over 35 applications, totaling $756,000 in requested funds and representing nonprofits in the arts, health, human services, and leadership. Although we initially intended to select 12 recipients, after seeing the need we decided to lower grant amounts so that we could fund an additional 10 organizations. Because the grants provided general operating support, nonprofits had the freedom to use the money as they saw fit. Some used it to translate their programs to a virtual environment, others to keep staff employed, and others to make direct payments to struggling families.

Bernardo Gomez and Antonio Hernandez of MILPA Collective
Bernardo Gomez and Antonio Hernandez of MILPA Collective

Juan Gomez, Executive Director, MILPA Collective, appreciated what he called the “anti-paternalistic approach” NFF took. MILPA provides support and resources to formerly incarcerated and criminal justice system-impacted individuals through cultural healing and other racial equity approaches. With the grant, the nonprofit was able to directly support 30 families while making sure their own house was in order to continue their work. MILPA also used the funds to partner with The Village Project, Inc. to share resources and promote solidarity, and hired five interns to expand youth outreach and engagement.

Families for Freedom, a human rights organization for families facing and fighting deportation, used the funds to support 36 individuals and families with food, transportation, and utilities, and funded technology so staff could work from home. The grant also helped them bring in more money from different sources by showing a funder’s trust in their work – a response that a number of grant recipients shared. “I do appreciate the fact that there was a level of trust in selecting FFF,” said Donald Anthonyson, Director. “It’s not transactional, it’s transformational.”

Finally, while the grants went out at a critical time with a quicker turnaround than other funding sources, NFF also learned that there is more work to do. “The door to discuss racism has opened,” said Alysia Souder, Executive Director, Institute of Music for Children. “People are realizing the impact that it has on all people all of the time.”

Bias, suspicion, and fear are real challenges in grantmaking, and NFF is privileged with access to networks and funding streams. By directing the flow of unrestricted dollars to communities of color, we can seed positive changes in those communities and the larger funding system.

Learn how partnering with NFF can help your dollars drive better impact.

Learn more about the grant recipients:

Learn how we adapted this unique funding solution to support communities in New York City.

Looking for a partner to help realize your vision? Check out our partnership page for more information or email partner@nff.org.

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