Stop Differentiating Between Program and Administrative Support

As the director of special projects at Siegel Family Endowment, I spend a lot of time talking to folks in the philanthropic sector about their approaches to funding. It's an opportunity to get in the weeds with others about their strategic priorities and to build an understanding of innovation and best practices in the field.

And for years now, I've heard funder after funder draw the same false distinction between supporting an organization's administrative costs and its program costs.

There's one thing they're ignoring when they make this kind of distinction: You can't have one without the other.

If there's a single prerequisite for running an effective program, it's having the right administrative structures in place to do so. HR, compliance, reporting, fundraising, finance, IT —  they're all critical factors in determining whether a program ultimately succeeds or fails.

Designating funding as programmatic merely forces nonprofits to be cheap, not prudent. With the majority of funding supporting programmatic work instead of the infrastructure needed to make such work possible, nonprofits are often forced to skimp on the very things that can ensure the efficacy and sustainability of their work.

Unfortunately, there's no magic formula that funders can use when deciding how their grants should be allocated. If they want to be nimble and responsive, they need, instead, to be clear in their expectations and receptive to an organization's changing needs. Big administrative needs (like new software purchases or upgrading office space) are unlikely to be an annual expense,  but when they are needed, the impact on an organization's budget — and programmatic work — tends to be outsized.

My big recommendation for funders? Start by asking grantees where they have had to cut corners. An organization's long-term success is a function of the health of the infrastructure that makes its work possible in the first place, and we as funders owe it to our grantees to cultivate a relationship with them that’s honest, open, and bi-directional.

Grantmakers have an opportunity in 2019 to shift their thinking on how responsible, responsive funding works. Let's help our grantees be as effective as they can be by investing in every aspect of their work and not just cherry-picking the things that appeal to us.

Jessica Johansen is director of special projects at Siegel Family Endowment. A version of this post originally appeared on the SFE website.