Smarter Grantmaking in Action: Social Venture Partners Arizona

Challenge

Many nonprofits spend too much time navigating complex funding restrictions and depend primarily on grants that do not cover general operations. Ultimately, general operating support, also referred to as unrestricted support, recognizes that only strong organizations can achieve programmatic impact. Research from GEO and partner organizations has demonstrated the importance of general operating support for nonprofits, and it is clear that there are adjustments grantmakers can make to enable nonprofits to devote more of their time and money to mission fulfillment.

Social Venture Partners Arizona has found that its “time plus money” approach helps its investees increase their capacity to deliver positive social impact. Terri Wogan Calderón, executive director & partner, says, “Impact doesn’t just come from funding programs, but from funding what’s going to help an organization grow. And that organization has to have input on what those next steps may be.”

Power dynamics can get in the way of effective communication and it can be challenging to build trust between funders and nonprofits, but SVP Arizona believes that those closest to the work are best equipped to make important decisions.

Solution

A strong philanthropic community is one where grantmakers are providing support that sustains nonprofits, and where nonprofits can put their energy into leading successful programs that have real impact. That’s why SVP Arizona gives multiyear, general operating grants and leverages its dollars, networks and professional skills to support its investees. “Once we make a decision to invest, we really try to work collaboratively with that nonprofit to figure out what it is that they need in their capacity and infrastructure to really help take them to the next level,” says Wogan Calderón. She continues, “There are people who are funding the programs, but in order to run those programs, you still have to turn the lights on. You have to be able to invest in your own infrastructure. It might be in a salaried development director or a salaried volunteer coordinator. What is it that is going to get that organization to grow to the next level? Many times the general operating support is key to be able to do that.”

How it works

Some of the main questions SVP Arizona asks itself are:

• What impact is the organization having in our community?
• Can they demonstrate it?
• Have we built a relationship on a foundation of mutual trust?

If the answers to these questions are solid, where investees spend their grant dollars is irrelevant. This model encourages a focus on the final outcomes and allows nonprofits the flexibility to do their jobs.

Outcomes

A more open and transparent relationship with nonprofits will help grantmakers achieve a more complete understanding of the types of support that will help them most. Without listening to nonprofits, grantmakers do not know how to improve their grantmaking to meet the real, day-to-day needs. Wogan Calderón says, “Collaborative relationships are all about trust. It isn’t about going in and changing everything immediately. It’s about looking at challenges as opportunities, and you can’t do this until you have trust. I am inspired daily by this work, especially because I see what a positive difference this kind of funding has on our nonprofit partners. Personal interaction and time, in addition to the money makes a big difference. It inspires me to help relieve the pressure from a nonprofit leader by offering them what they actually need to make progress, unrestricted support.”

Inspiring Ideas for Improvement from Terri Wogan Calderón

• Build trust. It’s more than just writing a check. Have authentic conversations to understand what is really needed and create opportunities to work closely with the nonprofits you’re investing in.
• Be nimble. Be willing to not do it the same way.
• Be patient. A lot of times we think we want our nonprofits to operate more like businesses. But yet we constrain them in so many ways that it’s hard for them to do so. Be more open to using general operating funds.