how to talk to your funders about core support

Core support; it’s the holy grail for many Canadian charities.

Very few of you have access to core funding, leaving the majority writing proposal after proposal for program support. When it comes to investing in your organization’s capacity or the professional development of your staff, there is little to no budget, because by and large, corporate gifts and government grants don’t allow for spending outside of direct program costs.

These non-programmatic expenditures are often labeled with that dirty word: overhead.

However, there’s a telling conversation unfolding amongst funders. In 2016, James Temple, Chief Corporate Responsibility Officer at PWC Canada wrote a whitepaper that made me want to stand up and cheer.

In the paper, Temple suggests that unrestricted funding allows charities to invest in themselves, and that the charities themselves are the experts in deciding where funding needs to be allocated at any given time.

Also in 2016, in an open letter to donors written in collaboration between Guidestar, The Wise Giving Alliance and Charity Navigator, the authors note “In fact, many charities should spend more on overhead. Overhead costs include important investments charities make to improve their work: investments in training, planning, evaluation, and internal systems— as well as their efforts to raise money so they can operate their programs. These expenses allow a charity to sustain itself (the way a family has to pay the electric bill) or to improve itself (the way a family might invest in college tuition)”.

I know that I’m preaching to the choir here. So, what can be done?

It’s up to those of us who are working in the charitable sector to re-educate donors and, in particular institutional funders, as to why program related funding isn’t good enough.

But how do we broach such a delicate subject? Aren’t we not supposed to bite the hand that feeds us?

To have a productive conversation with your funder, follow three steps: research, ask questions, listen.

Research the professional backgrounds of the people you’ll be meeting with. Hopefully some of them have had experience working for a charity. Ask that person to tell you about the biggest stressors facing them when they were working in the sector. More often than not, they’re refer to doing a lot with far too little, being time poor, being underpaid. Empathize and ask how those issues or stresses were resolved (disclaimer: they weren’t). Share your own hopes to be able to give your staff a cost of living wage increase, or to finally invest in your well-developed digital innovation strategy. Tell them that your program staff are amazing - that they’re the reason your organization is having such a big impact. Remind your funder that investing in you is an investment in programming.

Remind them of the changing expectations of 21st century donors. Speak to them about the “future of work”, and the investments that are being made, globally, in better, more fluid, more integrated services. The nonprofit sector, from both a client facing and internal facing perspective, is not immune to these trends.

Here are a few talking points that can help you frame the conversation.These will help your funder to think about core funding as deeply related to mission and programming.

  • Everything our organization does (including spending on overhead) contributes to achieving our mission through programs

  • Costs related to administration, technology, fundraising, or professional development are expenditures to support programs

  • The greater the investment on core expenses – the more capacity the organization will have to deliver programs

Whether or not these conversations lead to increased levels of core funding for your organization, they’re important to have as they seed the ground for a more enlightened, sustainable funding practice.

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