How the Shift to General Operating Grants Is Working Out for a Top Local Funder

Last fall, we wrote about the Chicago Community Trust's shift towards general operating support and away from project funding. Back then, we were excited to learn about the new direction, as well as the trust’s promise to streamline the grantmaking process and be more open to grant renewals for multiple years to boost organizational stability. Since that time, we’ve seen a various other funders around the country listening to nonprofit leaders saying this is exactly what they need to accomplish their missions.

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Well, now that a year has passed, we started wondering how those general operating support grants are working out for the Chicago Community Trust. To start with the numbers, the trust has awarded around $16.5 million in general operating grants to more than 200 nonprofits across the city and suburbs. The trust calls these “GO Grants,” and this was a two-year pilot that launched as a new initiative last fall.

The trust began by working with organizations that it knew well, which seems a reasonable enough way to loosening the strings attached to grants. But after the pilot period, it has hinted at plans to potentially open up the program to even more nonprofits, based on the amount of grant funds available at that time.

To better understand the trust’s first year of GO Grants and what grantseekers can expect going forward, I connected with Peggy Davis, chief officer of programs and strategic integration at the Chicago Community Trust, to ask a few questions.

Davis told us that the trust committed two-thirds of its annual discretionary grant allocation to GO Grants over the past year. That's a pretty bold commitment, right out of the gate with CCT's new direction. 

But it reflects what CCT was hearing from nonprofits, with so many organizations expressing the need for more general operating support because project-based funding can be administratively burdensome. Not only that, but some organizations expressed to the trust that such funding often made them feel like they were distorting their mission to fit within the confines of a grant opportunity—a familiar complaint of nonprofit executives, nearly all of whom have had the experience of twisting themselves into pretzals while hustling program grants. 

As for where the new GO grants are going during the pilot, Davis shared:

the trust prioritized these grants on organizations delivering essential services for thriving communities, particularly those addressing basic human needs (e.g., hunger, homelessness, social services, health care). GO Grants fund a variety of organizations—ranging from arts and education to community development programs.

A big question that we ask funders, like the trust, that have begun to prioritize general operating support is how they can measure the impact and success of these types of grants. Thus far, the trust’s initial strategy has been to stick to familiar relationships and figure things out as it goes.

Davis explained:

During the pilot, GO Grants were awarded to organizations that have received funding from the trust in the past—we know them, and their work, well. Working closely with these nonprofits, we are designing and testing a plan for impact measurement under this structure that will be used as the program continues to grow.

This is encouraging to watch, because a complaint of nonprofits is that even organizations that have been around forever and are well known to be key players in a given space can find themselves endlessly hustling for project support—including from funders that have been giving them grants for decades in some cases. That doesn't make a lot of sense. If funders know who the top anchor organizations in a space are, there's no reason to nickel and dime them year in and year out. 

That basic idea has been embraced by Darren Walker at Ford, which has a new focus on supporting anchor organizations, and CCT is on the same path with its GO Grants. Still, as we've discussed, there are strong institutional reasons why so many funders find it hard to kick the habit of program support, a type of grantmaking that allows them to feel a greater sense of efficacy and control, especially when it comes to being able to see near-term impact. (Never mind that a fixation with project support can undermine the long-term impact of grantees.)

Related: Control: Why So Many Funders Fear General Support and Can't Stop Micromanaging

As far as the streamlining of the application process, the trust is listening to what its GO Grant recipients have to say and adjusting its grantmaking approach with every bit of useful feedback it receives. “The response from organizations to the GO Grant application process thus far has been very positive,” Davis said.

Making a big shift to general support is not going to make sense for all funders, but Davis stressed that it's important to "listen to your grant recipients" and see what they really need. In the case of CCT, many top grantees are in the business of providing essential services, and such groups are "a logical fit for general operating support," Davis said. Not only are such organizations meeting needs that are constant and recurring, but they often need to be nimble in the face of certain kinds of urgent situations. 

Meanwhile, of course, many nonprofits badly need growth capital, so they can scale up their operations. CCT has those kinds of grantees, too, like the Delta Institute, which Davis said has been able to "invest in critical infrastructure and is now building capacity to invest in new, bigger and more innovative projects."

CCT's new approach remains a work in progress. But none of this really seems like rocket science. Grantees have been saying forever that they need more general support for a bunch of obvious reasons and CCT is now among the funders providing more such support. That's a good thing.