Ending the Nonprofit Starvation Cycle

We Should Pay What It Takes to Eliminate Chronic Underfunding

Today's approaches to nonprofit funding aren't building strong grantee organizations. Let’s change that.

For articles, reports, and other information about our work to address NGO underfunding in India, please visit our "Pay-What-It-Takes India Initiative."

Five Foundation Leaders Address the "Starvation Cycle"

By Jeri Eckhart-Queenan, Michael Etzel, and Julia Silverman

Presidents of five leading foundations have agreed to experiment with practices and policies to address chronic underfunding of their grantees’ indirect costs. Said one president: “We have engaged because we have a responsibility to put forward solutions. That’s a breakthrough.”

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Download the research behind the article, Momentum for Change: Ending the Nonprofit Starvation Cycle

The article above and those below originally appeared in Bridgespan's supplement on ending the nonprofit starvation cycle in the September 2019 issue of The Chronicle of Philanthropy. 

The Best Solutions Have a Compelling Story Behind Them

By Jeffrey Moore

Many nonprofit leaders don’t know how to talk about their true costs. Making the case for better funding formulas requires nesting the need in a bigger story about the impact of nonprofits in American communities.

The Price of Real Change

By Ellen LaPointe, Sandi Clemente McKinley, and Sara Davis

Foundations should provide flexible grants and sufficient overhead funding to cover grantees’ actual costs. The time to lead this movement forward is now.

How Foundations Can End the "Starvation Cycle"

By Andrea Wilson and Hilda Polanco

How can foundations and nonprofits bridge the gap between project funding and actual costs? Foundations need a standardized approach to calculating indirect costs.

How One Nonprofit Prepared for Tough Conversations with Funders

By Josh Solomon and Isa Ballard

Funders can do one simple thing to promote more open conversation with grantees about adequate indirect costs reimbursement: state on their websites and in their grant guidelines their approach to indirect costs.

Why Funders Should Pay for the True Costs of Nonprofits’ Work — Not Just the Direct Project Expenses

By Norma Altshuler and Marissa Tirona

In spring 2018, the Ford, Hewlett, MacArthur, Open Society, and Packard Foundations conducted a pilot project to explore how well current project grants provided for nonprofits’ indirect costs. With the help of external financial experts, who worked one on one with 22 grantees to calculate each organization’s indirect-cost rate, the funders learned firsthand that driving change and having impact requires long-term flexible funding. 

Five Nonprofit Survival Skills for Managing Low-Overhead Funding

By Eric Walker

Nonprofits funded by U.S. government grants receive full reimbursement for administrative costs. Those not receiving government grants need to master five low-overhead survival skills.

Learning Strategic Financial Management From the School of Hard Knocks

By Richard Modest and Aidan Eyakuze

The research and advocacy work of an East African NGO calls for flexible, long-term financial resources, something many funders are reluctant to provide. To cope, the organization had to master financial survival skills.