Multiyear partnerships nurture trust as relationships deepen over time and mutual understanding of a nonprofit’s needs and goals grows. Such partnerships allow nonprofits to plan and implement programmes and pursue new approaches that require sustained effort and long-term commitment. Predictable funding also allows nonprofits to focus on doing their best work instead of scrambling for money each year to sustain their efforts.
Funders also benefit. Multiyear commitments simplify grantmaking and reduce time spent on scouting new grantees and projects. Funders can then spend more time deepening their understanding of their target social issues, along with the nonprofit organisations and the communities they serve, and using that knowledge to help advance solutions. Funders also appreciate that the approach helps them increasingly focus on lasting change over immediate, superficial outputs.
Evidence from the Ford Foundation’s BUILD initiative shows multiyear partnerships can lead to better results. Eighty-three percent of nonprofits receiving a multiyear BUILD grant reported that certainty of funding helped significantly strengthen their organisation’s ability to achieve its mission, a win for the grantees and the foundation alike.[4]
Work with values-aligned partners
Funders who seek to build multiyear partnerships put a premium on choosing nonprofit partners whose work aligns closely with their core values and impact goals. Consider the Ford Foundation’s aforementioned BUILD initiative. In 2016, Ford launched BUILD to provide five years of general operating and organisational strengthening support to a set of partners working for social justice. Ford recognised that with multiyear commitments their nonprofit partners could increasingly focus on their core mission and build long-term strategies to drive greater impact and advance systems change. Later, in 2021, it extended the BUILD support to nonprofit partners across all programme areas and regions.
Other funders pursuing this path include the Children’s Investment Fund Foundation, IndusInd Bank CSR, Rainmatter Foundation, and Rohini Nilekani Philanthropies.
Commit to multiyear partnerships with grants renewed annually
Funders interested in developing multiyear commitments with their nonprofit partners may do so with the understanding that grants are renewed annually. This approach enables funders and nonprofits to align on and work towards a long-term impact objective. At the same time, the annual renewal provides room to evolve the specific approach to achieving that long-term objective based on how efforts are proceeding. Non-renewal decisions are rare.
This pathway is common amongst CSR organisations. ASK Foundation, Axis Bank Foundation, EdelGive Foundation, Forbes Marshall CSR,[5] IndusInd Bank CSR, and Thermax Foundation all have multiyear nonprofit partnerships that stipulate annual grant renewal.
Use pilot grants to explore potential long-term partnerships
Funders use an initial pilot grant to get to know a nonprofit’s work with an eye towards committing to long-term support. The pilot grant allows the funder and nonprofit to try out the relationship and build trust. Sometimes pilot grants also serve to ready a nonprofit to deploy larger grants by supporting investment in organisational capabilities that are critical for growth. Funders like LGT Venture Philanthropy, Mariwala Health Initiative, and Rohini Nilekani Philanthropies which are often the first institutional funders for early stage and grassroot nonprofits, use this approach.
“Developmental challenges exist within complex ecosystems. Solutions that can deliver impact in varying social, economic, and ecological contexts emerge from a series of experiments. Philanthropic capital has two distinct characteristics — risk and patience — making it an ideal fund for this kind of solutioning. Most of these solutions that can deliver sustainable impact take longer than a year to create, discover, implement, integrate, or influence. Consequently, relying on single-year grants would be short‑sighted and inefficient.”
