General Operating Support in Action

2022-2023 Grantmaking Report and Insights

How flexible funding made an impact on our grantee partners’ organizations

Introduction

ince implementing our evaluation approach in 2021, we have gained deeper insights into our grantee partners’ experiences from the 2022-2023 grant term and how they have adapted from ongoing post-pandemic challenges. As part of our trust-based approach, our commitment to transparency includes sharing with our grantee partners, peer funders and community members in our service region what we have learned, how we have responded, and what our plans are moving forward.

Each year, we want to understand how our general operating support impacts our grantee partners and identify opportunities for us to be better champions and partners of their work beyond funding. Therefore, grantee partner data (e.g., organizational demographics, grant utilization) and feedback are important to us because they guide continuous quality improvement of our processes and practices and keep us aligned with our values and trust-based approach.

We believe that our evaluation practice, and working alongside our partners, can help shift the field of philanthropy toward more equitable and trust-based practices. The Equitable Evaluation Initiative influences our evaluation approach, and we are committed to the principles outlined in its Equitable Evaluation Framework (TM).

This report i Due to the timing of when grant reports are submitted and the time spent analyzing the data, this report is published following that timeline. However, with improvements in collecting and analyzing data, we strive to publish future learning reports like this one earlier in the year to ensure the information we share is as relevant to community and actionable as possible for our peers interested in themes we lift up. summarizes insights gleaned from data collected throughout the October 2022-September 2023 grant term–from the grant application to the final grant report—specifically from our 2022 grantee partners and first multi-year partner cohort during Year 2 of our 3-year funding commitment.

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Methodology

The insights in this report were derived from organizational data from grant applications, site visits, conversations throughout the year, and verbal or written reports from the 2022-2023 grant term.

What We Learned Last Year

Last year, we published our first learnings report since implementing our evaluation framework in 2021 based on grantmaking and grantee partner data from the 2021-2022 grant term.

What Did We Want to Learn from the 2022-2023 Grant Term?

Before we delve into the insights, here is what we wanted to learn, which guided the “why” behind the types of questions we asked and the data we gathered from our partners:

Now let’s get into the insights.

Insight #1

Staff retention and covering the rising true costs of high-quality programs and services were top priorities for one-year and multi-year grantee partners, and flexible funding helped bridge the gaps.

In 2022, grantee partners initially planned to use our general operating support for staff recruitment, retention, and program expansion.

However, the impact of inflation on goods and services since last year has been felt by all of us, including nonprofits. By the end of the grant term in 2023, partners reflected on how our funding helped them cover the true costs of expanded programming, offset the impact of inflation on operational essentials like utilities and rent, and offer competitive wages to retain core staff.

We also observed that our annual partners were more likely to leverage our one-year grants to secure new institutional or individual funding streams. Last year, partners invested in hiring additional staff, filling vacancies, and strengthening their back offices, enabling them to pursue larger grants and funding opportunities and further elevating their work in our local health ecosystem. further elevating their work in our local health ecosystem. i We also take our commitment to trust-based philanthropy seriously because we always look for ways to support our partners beyond our grants. For example, we have introduced partners to peer funders with aligned values and priorities and have talked about our partners’ work at various tables.

This data highlights the importance, value and flexibility of general operating support for organizations to build and sustain their internal operations, enhance their organizational culture, and deliver quality programming, especially in challenging economic conditions.

Partners, particularly those with committed multi-year general operating support, reported that flexible funding enabled them to address emergent needs in real time without the concern of affording them.

Qualitative data revealed a consistent narrative: Inflation affects every facet of a healthy organization’s ecosystem. Experienced and essential staff need higher wages to remain at their organizations, program expansion grants from institutional funders fail to cover the true costs of expanding programs, and operational costs necessary for delivering quality programs and services (such as rent, supplies and utilities) have increased without a corresponding rise in revenue.

Insight #2

Our three-year commitment to flexible and unrestricted funding has enabled our multi-year funding partner cohort to quickly address emerging health and wellness needs in our service region, alleviating concerns about financing that work.

When we implemented our evaluation framework in 2021 during the COVID-19 pandemic, we observed our partners, particularly multi-year partners, were instrumental in ensuring COVID vaccinations were administered and providing critical health education. Since then, we have seen how rapid our multi-year partners are in their response to emerging community health needs and, based on their reflections, how critical general operating support has been in that response.

Thirty-nine (39%) percent of partners reported a substantial increase in demand for their services, and 30% expanded into new focus areas of social-determinants-of-health navigation work, such as mental health and food access, housing, and clinical care benefit enrollments, to meet this demand.

How have new migrant arrivals impacted their work?

Since the summer of 2022, thousands of people crossed the US border seeking asylum and have resettled in our service region, with periods of record high arrivals in the Fall and Winter 2023. Several grantee partners, particularly our multi-year partners, have played a central role in responding to their needs unmet by inadequate government response. The flexibility of multi-year funding has allowed them to act with fewer financial concerns.

When applying a racial equity lens to the data, we observed that BILPOC-led organizations tasked with quickly providing programming and responding to the needs of new arrivals were not given sufficient government support to properly handle the proposed scope of work. BILPOC leaders have long reported having less access to general operating support and capital funding compared to their White colleagues, perpetuating this inequitable investment dynamic.

Approximately half i of BILPOC-led organizations responded to increased demand for services, were expected to quickly implement programming, and/or apply for emergency funding opportunities. of BILPOC-led organizations responded to increased demand for services, were expected to quickly implement programming, and/or apply for emergency funding opportunities.

Almost half of our partners i Note: This is a qualitative data point and may likely be higher among all of our grantee partners. who have taken part in response efforts shared they were worried about financially sustaining this work in the long term, especially with an increasing number of new arrivals anticipated later this year.

Compounded by inflation and the expenses associated with expanding programming in general, the influx of new arrivals in our region posed challenges for organizations to sustain their efforts and adapt to evolving needs. Nonetheless, our grantee partners have shown resilience, especially since 2020 at the height of the pandemic. They have navigated these challenges with agility, often prioritizing response efforts over financial concerns, with our general operating support playing a crucial role in assisting them.

Insight #3

Some organizations view sustainability as an internal goal that addresses staff and organizational culture, while others view it as an infrastructure system investment.

When reviewing the themes about organizational sustainability in our partners’ reports, two groups emerged:

One viewed sustainability as investing in their staff (i.e., salary increases, better or new benefit packages and professional development) and strengthening their organizational culture and connectedness.
The second viewed it as investments in their operational or physical infrastructure, such as buildings, strategic planning, and technology.

Our multi-year partners were more likely to invest in staff and organizational culture investment.

When we dove deeper into the data and applied a racial lens to it, we observed that organizations with BILPOC and White-majority boards equally shared that staff were critical to their organization’s sustainability. Those with BILPOC-majority boards were more likely to share specific actions and activities that they have implemented that benefit the staff, community members and organizational culture than those with White-majority boards.

How can philanthropy fund work that invests in organizational sustainability and supports culture and connection within and between partner organizations, especially if they do not have the bandwidth to implement?

Insight #4

There is still so much we want to learn, and we hold ourselves accountable to improving how we track and ask about racial equity efforts, especially for organizations that have been slower to move on this work.

Tracking Organizational Demographic Data

In 2018, we observed rapid demographic changes in Chicago, especially the western suburbs. However, the social service infrastructure was not evolving at the same pace.

By 2022-2023, data showed that suburban-focused partner organizations were predominately White-led, whereas those serving Chicago or both Chicago and the suburbs often had BILPOC executive directors. This is significant as Black, Latine, and Asian communities are the fastest growing groups in our suburban footprint, highlighting the need for our partners to be aware of these shifts and adapt their leadership and programs to these changes.

This is why we emphasize the importance of demographic data collection to advance racial equity work and foster a more racially equitable workplace as it establishes a baseline to track progress over time. Tracking this information helps organizations serve their communities better and allows us to assess our investments to avoid perpetuating inequitable funding dynamics.

Annually, we collect organizational demographic data from applicants and grantee partners to measure the impact of our grantmaking strategies. We realized that other funders also request this data, often in different ways. To streamline this process, we joined the Demographics via Candid campaign, which encourages nonprofits, including funders, to share their demographic data on the Candid platform. This partnership aligns with our trust-based approach—organizations have to only share their information once and in one place and we “do the homework” to retrieve demographic data each year.

Later this year, we plan to share resources with our current partners about the benefits of completing their demographic profiles on Candid, and we will explore how to leverage this platform for learning and evaluation purposes moving forward.

Our Racial Equity Measure

We currently assess our partners’ racial equity efforts through a self-reported measure, where organizations locate themselves on a spectrum ranging from “not yet taking on this work” to “we have clear, targeted goals and active progress”. However, this method is not giving us the full and deeper picture of what we want to learn and how we can track racial equity outcomes over time per our Theory of Change.

Achieving racial equity is both a process and an outcome. For work we want to do with our grantee partners, we aim to refine how we measure progress and deepen our own analysis and understanding of efforts from partners leading in health justice and racial justice efforts.

Next Steps

Since the release of this report in Spring 2024, various external and environmental factors have impacted organizations and communities in our region, both in known and unforeseen ways. We will closely monitor these and other potential impact over the coming months, especially with this summer’s Democratic National Convention in Chicago, the Republican National Convention in nearby Milwaukee, and the Presidential election this Fall.

Toward the end of this year, we plan to convene with our partners to envision future possibilities for the next five years—together. With insights from our last grant term in hand, we aim to explore how we, as a foundation, can continue supporting our grantee partners in the ways they need us to, both with flexible funding and beyond the check, and co-create a better, healthier future for all community members in our service region.