California Foundation Studies:
Grantmaking for General Operating Suppport

Conventional wisdom suggests that foundations are most interested in project-specific grants, and less interested in helping non-profits fund basic expenses such as rent, salaries, utilities, etc. The Institute's recent study shows that foundations in California believe strongly in supporting nonprofits with their general operating expenses, and more than three quarters (78.8%) of the foundations surveyed made grants to support general operating expenses. The study found that:

• Larger foundations were more likely to make general operating support grants, and to make multi-year grants.
• Smaller foundations devoted a greater percentage of their grants and grant dollars to this purpose.
• Foundations in the arts and human services are more likely to provide this funding.
• Few foundations believe the grants should be the primary way for nonprofits to finance their general operations.

• The partnership between the foundation and the nonprofit can advance the foundation’s long-term agenda.
• The money can help new organizations become more self-sufficient.
• The funding can permit non-profits to take risks, especially when given as a multi- year grant.

Not all foundations agreed that it was wise to support these grants, however. Some believe the grants help support weak organizations, and many feel the funding should be used only as temporary support in times of transition or crisis.

The study also showed that the foundation itself can be affected by granting funds for general operating support, because such grants can force the foundation to more clearly define its purpose and goals and to increase internal dialogue about how it can best achieve its mission.. Also, the study indicates that these grants can affect the relationship between foundations and grantees, permitting greater honesty in discussing what does and does not work.

The study used three methodologies: a mail survey; focus groups (three) with foundation staff and trustees; and a series of individual interviews. The surveys were addressed to executive directors of foundations throughout California. The survey of 500 California foundations generated 203 responses, a 42.7 percent response rate.

Download Report (PDF)
Meet the Grantmaker — Trends in Funding for Operating Support: The Grantmaker's Perspective. Video of presentation recorded at the Foundation Center's San Francisco library/learning center on June 28, 2007. Requires the latest version of Macromedia Flash Player.

Supported by the Nonprofit Sector Research Fund of the Aspen Institute.