Can You Spare One Percent for Core Operating Support?
It’s on every philanthropy “best practices” list. It regularly shows up on grantee surveys as their #1 request of foundations. It’s the subject of countless blogs, articles, conference sessions. It’s studied and researched. It goes by several names: “core operating support,” “overhead,” “indirect costs,” “real costs.”
It gets a lot of attention but no love. It’s left at the altar; always a bridesmaid, never a bride; the nice guy who gets bested by the bad boy.
It’s a conundrum in these times when philanthropy professionals are touting the virtues of “listening to grantees” and being more responsive to their stated needs that more foundations are not shifting their grant making to core operating support. We in philanthropy keep asking, “what do you most need from us?” And they in non-profits keep answering, “Core operating support.” We nod, maybe applaud, and then don’t respond.
The reasons for this are numerous, having to do more with the culture of philanthropy than any other explanation, in my opinion. Spurring more responsiveness is my subject today. The reasons for our collective amnesia can be left to others to add to the library of studies on it in the future. How do we transition more philanthropic dollars to core support? How can we listen better, act more, and start to create a new culture?
I offer a modest proposal: let’s pledge to increase our annual payout by 1% and allocate those dollars to core operating support. You choose the criteria for who benefits — anchor grantees, emerging organizations, struggling ones. It hardly matters in the state of scarcity they all live in.
What will it take to get there? There are implementation hurdles that will need to be addressed. The first one is commitment. It’s fine for a group of leading CEO’s to say publicly they will focus on the problem. But it would be better if they would also say how they will do so. We need a Giving Pledge-type accountability in which not only are your intentions proclaimed, but you’re also accountable to a group of peers pledging to act.
The second one is board education about “perpetuity.” Do we trustees really mean “forever” even in the face of the “systemic’ problems we are trying to solve? How about “sort of forever?” Couldn’t we prove our theories of change in, say, 100 years rather than perpetuity? We need a conversation about “real returns” not just “real costs.”
Finally, we need to play offense, not defense. Our field is under increasing scrutiny from the press, the IRS, numerous state regulators, and social justice advocates. We need to offer positive and constructive changes to our practices that start to change our own systems.
It’s a modest start. But we need to take small steps before we can run. Let’s pledge to a 1% campaign for operating support. Who’s with me?
This article was originally published on LinkedIn by Gwen Walden, one of Arabella’s senior managing directors. Click here to respond to her there.