In Search of Impact: Practices and Perceptions in Foundations’ Provision of Program and Operating Grants to Nonprofits (2006): Foundation and nonprofit executives have long discussed and debated how grantmakers can best support nonprofits. Missing from this debate is data about current foundation practice and what informs that practice, and data about the grantee perspective on these critical issues.

Summary of Key Findings:

• Most of the grants made by even the large foundations whose grantmaking is analyzed in our study are program restricted, small, and short term. The proportion of small grants made by these foundations is often overlooked because of how data on foundation grantmaking has historically been reported.
• CEOs see operating support as more likely to make a positive impact on grantee organizations, but most place other priorities higher in their decision-making. Just 16 percent of CEOs we surveyed indicate that they favor providing operating support, and a third have no preference. Nearly half prefer to provide program support to grantees – often because they feel it is easier to connect their grants to specific outcomes.

To grantees, type of support is important – and operating support is preferred – but only when grants are larger and longer term than what is typically provided today, even by the country’s larger foundations. Those foundations seeking to maximize their impact on grantee organizations should make larger, longer term operating grants – and do so while exemplifying three additional characteristics that grantees most value in their foundation funders.

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