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February 9, 2015 - Kim Moore [see other posts]


The Elusive Concept of Sustainability

Many grantmakers would say that a key tactical understanding for them is “making long-term change with short-term money.” These funders—and the Health Ministry Fund is one—intend  to support a project for a period of two to five years; the project will be expected to sustain itself after the grant period. Frequently, there are public guidelines containing the indicia of this tactical understanding: “No on-going operating grants,”  “Maximum grant term of five years,” and “Renewals are the exception.” Almost always, those same grantmakers do make repeated renewals in one or more parts of their portfolio. For example, many funders believe that advocacy organizations have to be an exception to the “no on-going funding” rule because those organizations cannot develop a natural funding constituency (other people who care enough about the cause to donate or any source of earned revenue from the organization’s work).  

There are a lot of things wrong with the short-term money/long-term benefit idea, especially as applied by funders and understood by grantees. The first problem is that it so seldom works in many contexts. I have read countless applications where an applicant wants to start an organization and is requesting three-year support from us of a significant amount (75% percent or more of the costs) and answers our question on sustainability by saying “At the conclusion of the grant, we will seek other grants and, because of the benefits proven, will be able to attract funding.” This “pie in the sky” approach to sustainability has worked not more than 5 times in my 27 years of grantmaking. There are occasions when start-up funding—significant coverage of total costs for two or three years—can successfully establish a long-term organization. My experience is that one of three things have to be in place: 1) the probability of significant revenues from the organization’s service, 2) a proven organizational format which contains successful fundraising strategies (i.e., Big Brothers/Big Sisters) not dependent on grants, or 3) pre-existing take-over funders which require a history or volume before providing funding. There are, of course, exceptions to all rules and certainly to my experience, but they are surely rare as far as organizational sustainability is concerned.

At the center of most sustainability problems are the mismatched goals of the nonprofit grantee and the funder. Frequently, in our current work, our goal for sustainability is not the perpetuation of an organization but a sustained change in policy or practice. From our view, the maintenance of personnel to any large degree post-project to achieve this change in policy or practice should be unnecessary. The two to five year period where personnel assisted in making these changes is over; the changes are there and staff outside the project should have altered their practices and not have the need for on-going supervision and constant training. The organization which has an employee or contractor doing the project work has a natural incentive to retain the person. The grantee may not see the change in practice or policy as sufficiently embedded without on-going support for the staff and may not have been working toward that end very consistently. These situations create mixed sustainability results: some grantees do sustain the innovation; some don’t sustain all the innovation; and others revert to pre-grant activity.

The best approach to sustainability is clearly one where both sides of the funding relationship share mutual goals reflecting the reality of the funding period. The funder is in dream land if it believes $100,000 in support will be replaced by new appreciation in the public for the service, and the grantee is living on the edge if it believes that another funder will appear for another period of equivalent support. Of course, either might happen, but the more prudent course is to assess what will remain when there is no $100,000 in annual support and how the work can be built into organizational practice—partially funded by earned income, shared with other organizations (collaboration), and/or partially retained within the organization’s existing capacity. In some cases the funder should, throughout the grant, be assisting the organization with capacity building work to strengthen the organization’s overall financial situation. Grantee and funder should work on appropriate dissemination of the results of the project work, both to enhance learning in the field and also to increase the chances that the work will be acknowledged by private or public funding for continuing support.

We have certainly failed to achieve sustainable results many times. Sometimes our plans for sustainability were developed too late in the projects. Sometimes the grantee was not willing to look at partial sustainability or sustainability in practice versus continuation of funded staff and financial resources. Other times the grantee did not really see the work as part of its ongoing mission but only work to do when someone else paid for it. Clearly, from the beginning of the grant work, both grantee and funder need to be on the same page on what will be sustained and on a realistic plan for working toward that continued operation. Perfect sustainability will not always result, but there will be less grief when realistic expectations for some form of sustainability are achieved versus total loss of the benefits of the funding.