Letting Go: Behind This Foundation's Bold (and Contrarian) Operating Support Initiative

Back in November 2014, IP's David Callahan wrote a piece on why so many funders fear the idea of general support. The premise was simple. Foundations like control. They like to micromanage. They like earmarking where their money is going. 

We can't blame them, really. After all, it is their money. But very often, this degree of control and the fact that the funder may directly or indirectly shape a recipient organization's mission, funding model, and/or programming activities, can be cumbersome for the grantee. Some foundations understand the frustration, but progress can be slow. As Callahan noted in his post, while the percentage of funds devoted to general operating support has increased lately, it's still only 25 percent of total funds allotted.

And while we'd like to say that funders like the Portland-based James F. and Marion L. Miller Foundation had epiphanies upon reading Callahan's piece, we'll resist the urge to make the connection and instead simply pass along what can only be described as good news for Oregon-based arts organizations. The foundation announced that it has awarded four-year, unrestricted operating support grants to its Operation Support Initiative cohort of more than 35 arts organizations throughout the state of Oregon.

The premise of the initiative sounds like it was transcribed straight from the lips of your typical micromanaged nonprofit arts executive. "Uniformly," the foundation's site says, "arts organizations identify the need for unrestricted operating support as critical to their ability to provide core programming, engage new audiences and build working capital. Yet, unrestricted funds are some of the hardest to secure each year." (We imagine you're currently nodding your head saying, "Amen.")

Recipients were selected based on criteria that included "leadership, organization business model and the alignment of these two vital factors with their near-term planning objectives." And it gets even better for grantees. That's because control, as we all know, is a relative thing. Even an unrestricted grant can have some strings attached to it. Take, for example, Bloomberg Philanthropies' Arts and Innovation Management program, which provides unrestricted general operation support. The only catch—and we thoroughly admit, it's a minor one—is that Bloomberg, understandably, measured progress at recipient organizations through its first round of funding, from 2011 to 2013. (After all, it is their money.)

Standard stuff, of course, but nonetheless a bit more hands-on than the Miller Foundation's Operating Support Initiative, where arts organizations in the cohort have selected their own benchmarks, which will be used to measure progress throughout the duration of the initiative. It's a subtle but not insignificant distinction.

All told, by providing unrestricted general operating support and letting recipients select their own performance benchmarks, the Miller Foundation's initiative falls on the "uniquely hands-off" end of the funder control spectrum. This is against-the-grain stuff. Remember Callahan's data point—something like 75 percent of grant dollars have strings attached.

What's more, the foundation hopes other funders in the state loosen up a bit and realize it's OK to relinquish some control, noting, "It is our hope that our support of these organizations encourages support from other foundations throughout the state."

Will Miller's funding brethren follow suit—both in-state and nationally? Stay tuned.