G-O-S: Three Letters Our Donors Should Get to Know and Why They Matter So Much to Nonprofits
When we relaunched our strategy last year—in addition to announcing our focus on Brooklyn’s Youth, Neighborhoods, and Nonprofits—we also committed to being a stronger funding partner to our grantees, which means deeper engagement with the challenges and opportunities they face in operating successful organizations. Our first step was to focus on providing General Operating Support (GOS) whenever possible.
While GOS may be music to many nonprofits’ ears, for a lot of donors and philanthropists it’s not necessarily a familiar concept.
To borrow an apt description from one of our favorite nonprofit blogs, “General operating funds are like Tyrion Lannister of Game of Thrones, or Darryl Dixon of The Walking Dead, or, you know, Sophia from The Golden Girls: It is flexible, it is adaptable, and that’s why it gets stuff done.”
In the past, many of our grants were specifically targeted to fund nonprofit programs and services, but through Brooklyn Insights and subsequent convenings, our grantees let us know loud and clear that what's most valuable is the kind of support that frees them to address what’s needed most at any given time. And often, that’s overhead: employee salaries and benefits, rent and utilities, phones and computers—the list goes on and on, but it’s the things that make their programs and services successful and ensures that staff members can receive a critical living wage.
Today, there is mounting concern and criticism toward foundations and governments for ignoring the importance of overhead costs and underfunding organizations that are expected to do more with less. In the latest issue of the Stanford Social Innovation Review, there’s a lively debate on this topic, ignited by a new study and accompanying article from The Bridgespan Group:
For years, nonprofits have campaigned for funders to end their widespread practice of providing full financial support for programs and services, but scrimping on overhead costs. This practice gives rise to the vexing “starvation cycle” that constrains nonprofits’ ability to invest in essential organizational infrastructure and creates tensions, and even dishonesty, between grantmakers and grantees.
Here in Brooklyn, some human service nonprofits are starting to refuse government contracts that don’t cover the full costs of providing services. As a community foundation, we are committed to building the holistic capacity of organizations in a way that allows them to address the needs and challenges of the people they work with and at the same time sustain their long-term work. It’s a critical challenge for the nonprofit sector and one we hope more donors will pay attention to as they think about their own giving and expectations placed on nonprofits.