Core support grants: like baking a cake

Imagine you go into a bakery and you order a large chocolate cake, but then refuse to pay for the butter or, say, the electricity to heat the oven. What sort of a cake would you get?

Obviously, you will have a pretty dense, uncooked cake! This is the analogy that Vu Le, director of the Rainier Valley Corps uses when describing what restricted funding looks like to not-for-profit organisations. Of course, it makes perfect sense – if the bakery cannot use the funds to buy the ingredients it needs, then it is forced to cut corners and that increases the risk of quality being jeopardised. “Funders don’t pay for everything,” says Vu Le, “so we have to ‘frankenstein’ a bunch of grants together … and they each have their own restrictions.”

At Oak Foundation, we are aware that not-for-profit organisations often face similar challenges when working with funders. That is why we like to provide core support grants. “People have to be paid and office rent has to be found and these don’t happen by themselves,” says Oak’s youngest Trustee, Christopher Parker in an interview with Alliance magazine, “So, for us, providing organisations with core support, where appropriate, has never been a question.”

“I think there are times when it is appropriate to give core grants and times when it isn’t appropriate,” says Caroline Turner, Oak Trustee. “If you are giving to a massive organisation, they might not need core grants. However, for a lot of groups that are just beginning to exist, core support is what will help them the most.”

Eight years ago, core support constituted just 11 per cent of Oak’s grant-making. Today, our grant-making has increased its core support allocation to over 30 per cent, varying across programmes. There is growing evidence of the benefits core support brings to organisations of all types, sizes and stages of development.

“Core support allows for growth, flexibility, adaptive management and the recruitment of high-quality staff,” says Oak president Douglas Griffiths. “It helps smaller organisations leverage other funders and seize new opportunities in real time. It allows larger groups to scale successful initiatives and do impact assessments that foster learning and further growth.”

A recent study conducted by the National Committee for Responsive Philanthropy found that US-based grant-makers provided USD 5.9 billion in core support (also known as general operating support) in 2011, a 16 per cent increase from USD 3.4 billion between 2008 and 2010 [1]. Put another way, the share of grant dollars going to core support increased from 16 per cent to 24 per cent within four years.

So, it is clear that we are not alone in our decision to increase core support funding. We realise that, as well as freeing up not-for-profits to actually do the work, core support is a sign of confidence. It establishes stronger relationships between funders and grantees, building a level of trust that creates flourishing, long-term partnerships. “If you really want to have a long-term effect in a particular field, you have to build it, and it takes years to do it,” says Christopher. “Most of our programmes have been going for 10-plus years and started from relatively small budgets which have grown. You can see the evolution, and the effect that it is having on the field.”

By providing core support grants, we hope to place our partners in the best possible position to succeed in reaching their goals. “When we go to people and say, ‘we want you to do this’, it becomes a project for them,” says Caroline. “Our role is to strengthen our grantees, not for them to strengthen us. I think core support grants give us the opportunity to strengthen grantees in a way that – from what I understand – not many grant-making organisations are willing to do.”

Flexible funding allows our partners to sit in the driver’s seat, making the decisions that they feel are best for their organisations. We believe that our partners are best positioned to know what ingredients are needed to bake the large, buttery chocolate cake that was ordered. Vu Le says, “core support grants are flexible, adaptable, and they help us to get things done.” We know that the best way we can help our grantees is by letting them take control in the kitchen.