Time to Reboot Grantmaking

Hilary Pennington and Michael Etzel

Bridgespan developed, and then refined with the Ford Foundation, a simple Grantmaking Pyramid that reframes how funders and their grantees should think about building successful, resilient organizations.

First, nonprofits need to build strong foundational capabilities. This requires securing adequate funds to cover the actual costs of core functions, such as strategic planning, information technology, staff development, utilities, rent, and travel.

Second, nonprofits need organizational resilience based on financial health. That means accumulating unrestricted net asset balances. For decades, groups like the Nonprofit Finance Fund and Fiscal Management Associates have called attention to the importance of strong balance sheets in the social sector.

Third, nonprofits need to deliver effective programs, the springboard for increasing impact. The peak of the Grantmaking Pyramid is the public face of nonprofits and the place where, understandably, funders and grantees focus their attention. Every nonprofit starts with a program or service goal in mind. Funders are eager to support those goals.

Source: Article text