The Funding Challenge
These are extremely difficult times for non-profit organizations with all levels of government reporting unprecedented budget shortfalls, traditional community and private foundation assets plummeting, and individuals and corporations cutting back on their charitable donations. At the same time, with the economy unsteady and unemployment at worrisome levels throughout most of the country, ever-increasing numbers of people are turning to already-stressed charities for health and social service support. All over North America non-profit groups are struggling to keep up with the demand in an environment where funding is unpredictable at best and most funding bodies expect that agencies will create a sustainable funding base. This, for many, is an improbable or even impossible task.
At the forefront of this challenge are traditional community and private foundations that have for years played a crucial role in supporting existing and potential innovative programs. The funding needs, however, of the social service network in any given community cannot be met through the community foundation movement, nor should this be an expectation. It may, however, be a time when foundations might re-evaluate their role and impact with an eye to creating legitimate opportunities for service providers to secure long-term, sustainable support rather than focusing solely on one-year projects.
For decades foundations have been making large grants to non-profit organizations in the hope that they would be meeting a wide range of our society's most pressing and vital needs. In 1995 alone foundations invested more than ten billion dollars in programs dealing with poverty, homelessness, the environment, education and the arts. Quite simply put, existing funding practices are proving to be ineffectual with an extremely limited impact on very serious societal problems. Although this approach creates an incentive for non-profits to devise innovative programs, it does not encourage them to spend time assessing the strengths, goals and needs of their own organizations or the true needs of citizens in the community.
Foundations need to find imaginative new ways of making grants and creating opportunities that not only fund quality programs, but also build up the organizational capabilities that non-profits require in order to deliver effective, sustainable programming. Unfortunately, agencies often lack the organizational resources required to sustain the programs they have so carefully designed and tested.