Whitepaper: Unrestricted funding - why grantmakers need it
If you're serious about making a big difference to the organisations you support, you must consider including unrestricted grants in your funding mix.
These "no strings attached" funds allow grantees to spend the money as they see fit, within a sliding scale of restrictions depending on your appetite for risk. This flexibility is crucial for organisations when it comes to covering core costs, attracting further funds, investing in organisational capability, bridging financial gaps, and surviving financial shocks.
Unrestricted funds can also boost recipients' ability to respond to circumstances, increase innovation and support politically sensitive causes.
What's more, unrestricted funding can help right the power imbalance between grantmakers and grant recipients, and increase the impact of funding programs by giving grassroots players the power to develop their own solutions. Covid-19 prompted many grantmakers to reduce restrictions on existing funding, yet many are already reverting to strict controls on their programs.
The latest white paper from SmartyGrants –Unrestricted Funding: Why grantmakers need it –walks funders through the benefits and challenges of unrestricted funding, and options for different program settings.
The white paper is a collaboration between SmartyGrants and Professor Pamala Wiepking, a Netherlands-based international expert in philanthropy and grantmaking.
Professor Wiepking has a keen interest in the effects of unrestricted multiyear funding for grantee effectiveness. Co-authors Kathy Richardson, SmartyGrants executive director, and Josh Presser, SmartyGrants special projects director, bring an Australian perspective to the white paper.
Some of the benefits of unrestricted funding
Unrestricted funding can help recipients:
- Keep the lights on, potentially helping cover core costs and other aspects of financial sustainability
- provide agility, flexibility, and the ability to respond to a crisis or changing circumstances
- increase innovation, independence, and ability to support unpopular or politically sensitive causes
- strengthens grantee–grantmaker relationships and addresses inherent power imbalances.
- builds organisational capacity
- increase impact
- reduce the administrative burden
Explore our white paper for more expert advice on unrestricted funding.