Gifts & Giving
Public Commons
Social Ventures
Home » Foundations

Foundations Fund Operating Costs After All

By Kate Golden on May 10, 2007One Comment

Foundations fund program, not overhead, right? 

Not so, according to a new study conducted by the Center on Philanthropy at Indiana University.  The study, Paying for Overhead, found that 69% of the 710 foundations surveyed support expenses such as rent, salaries, and accounting systems.  Nearly 50% make grants toward general operating support.  Almost 1/3 award unrestricted grants. 

So why do so many nonprofits struggle to cover their operating expenses?  According to Patrick M. Rooney, director of research for the Center on Philanthropy, the discrepancy lies in the “short-term nature of much foundation funding and nonprofits’ resulting hesitancy to use foundation funding for recurring expenses such as overhead.”  Nonprofits are choosing to pursue other sources of revenue to keep their lights on and their staff paid because these costs will continue long after the life of a grant – even a multi-year one.  Unfortunately, other sources of revenue aren’t easy to find.  2/3 of the nonprofits surveyed said they lacked adequate funding for their operating expenses.

If foundations are willing to pay for overhead, should nonprofits start applying more of these grant monies toward operating expenses?  Or will this make them more dependent on foundation funding; funding that can be sporadic and unpredictable? 

Share This Post
[] [Digg] [Facebook] [LinkedIn] [Twitter] [Email]

One Comment »

Leave a comment!

Add your comment below, or trackback from your own site. You can also subscribe to these comments via RSS.

Be nice. Keep it clean. Stay on topic. No spam.

You can use these tags:
<a href="" title=""> <abbr title=""> <acronym title=""> <b> <blockquote cite=""> <cite> <code> <del datetime=""> <em> <i> <q cite=""> <strike> <strong>

This is a Gravatar-enabled weblog. To get your own globally-recognized-avatar, please register at Gravatar.


#cgi2010 Allison Fine Barack Obama Beth Kanter Bill & Melinda Gates Foundation Bill Clinton Blogs Case Foundation CauseWired Changing Our World Clinton Global Initiative Corporate Social Responsibility Disasters DonorsChoose Facebook Facebook Causes Flash Causes Fundraising Fundraising Nightmares Giving Pledge GlobalGiving Haiti Hillary Clinton Kiva Lilya Wagner Mario Morino Millennials Non-profit organization Nonprofit NonProfits Philanthropy Planned Giving Politics Ron Paul Skoll Social Actions Social Media Susan Carey Dempsey Susan Raymond Ph.D Tom Watson Twitter United Nations Women YouTube


Philanthropy News

Sites We Like


onPhilanthropy and DotOrgJobs are published by CauseWired Communications, LLC - copyright 1999-2011, all rights reserved.