In my last interview with Mary Hirschbiel, she mentioned that she needed donations for "unrestricted operating funds." For those of you that don't speak nonprofit, this term is used to describe monies that are given to the organization with no strings attached.
Many times, if you win a grant, the work has only just begun. Each grant may have stringent reporting requirements, or the grantmaker may request that the funds be used for only one portion of the nonprofit's programs. In order for a nonprofit to operate, all of its expenses must be covered by a combination of grants, sponsorships, and contributions. Operational grants have all but gone the way of the dodo.
In most cases, contributions like My Ten Bucks get put into a general operating fund (unless I say I want it to go to a specific fund). The money is used to pay for insurance, tax preparation, paper clips, and the other million-and-one odds and ends that come with running a professional business. Unrestricted operating funds pay for the nonprofit's costliest but greatest asset: its staff. And if the donations don't come in, the staff won't be there to write programs and help people and support the board of directors and do everything else that it takes to run the nonprofit. Including buying those paper clips.
Although we love grants (yes, we do!) and sponsorships (we love those, too!), nothing is better than a no-strings-attached donation. Still, outright contributions come with their own price: our donors are trusting us to use their money wisely. We must take that responsibility to heart.
In any case, if that ever comes up again, you'll know what I'm talking about. Thanks, Mary, for the inspiration.
The narrow scope of some grants, especially government grants,can put restraints on an organization that actually limit the effectiveness of its programs. A nonprofit beholden to these funders is indirectly controlled by them - often fearing to do something that might"offend" these powers and curtail future grant receipt. When an organization relies significantly on directed funds and their providers, the injured party is the constituent. That's a lot of wasted money and effort. Go unrestricted funds!!
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