New methods for CSO funding

The task ahead for the CSOs is not simple; the reduction of inequalities is an arduous challenge that requires a long-term commitment. Regrettably, most of the funding options they can count on tend to be short term.

Kathy Richards, Director of Building Institutions and Networks (BUILD) of Ford Foundation, considers that these kinds of grants focused on the short-term stifle the investment to the critical areas, much needed for a sustainable impact. Ford Foundation, a pioneer on new forms of development funding, thinks it’s necessary to change this paradigm to help CSOs become more efficient change makers in the long run.

On September 27th, Rockefeller Philanthropy Advisors published a report about this titled: “Scaling Solutions toward Shifting Systems”. The report shows the results of a yearlong research in which nonprofit and social enterprises that were successful in the implementation of scalable solutions were interviewed about their experience with funders.

From these interviews emerged clear conclusions for large-scale transformation, summarized in five good funder practices: change power dynamics with organizations, put them in the driver’s seat (Empower); offer flexible and strategic financing to help build resilient and innovative organizations (Accelerate); develop a body of knowledge on what truly shift systems (Learn); share information with other funders to align actions (Collaborate); and redesign donation processes to make them less complicated for CSOs (Streamline).

Ford Foundation has already begun to implement some of these practices. They are paying a minimum of 20% overhead on all project grants. They also launched the aforementioned program, BUILD, which provides 300 partner organizations with a combination of general operational support and specific support to strengthen basic skills, vital to achieving greater impact. Each beneficiary of BUILD receives 5 years of financing, at levels higher than those historically received.

The Foundation expects that a greater link with its beneficiaries and more flexible support to strengthen areas such as strategic vision, adaptability, financial sustainability, and leadership will produce Civil Society Organizations that have a more significant and sustained impact on the society.

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