#1 Grant Blocking Factor: Operating Costs


I am in the business of giving. Literally. I have a foundation, and it’s kind of what we do. In working with non-profits you get to hear a lot of stories that will make you more attentive to facts than you had been, and that’s the nature of working with other groups. My only question is this: When did operating costs become a dirty word?

Actually I know and so do you if you think about it. Too many Ponzi schemes, too many people ‘cooking the books’ i.e.: changing their accounting figures, too many Non-Profit CE0’s making millions a year, and too many groups throwing big parties. Add to that the idea that if I give you money for operating costs this month, you’re going to need it again next month and you have a not-very-sexy alternative to spend your money on.  Which draws us to this. The number one blocking factor in grants are operating costs.

Apply for a grant and you will see that all day long. They instead want to do something that they can see a footprint on. Build a building, add on an addition, take on a specific project, etc, etc. Add to that the number of groups that don’t donate to groups that have less than a $500k annual budget and you have most charities left out in the cold.




An example of this I saw about six months ago. A charity that does an enormous amount of good in my hometown received a $10,000 grant… for windows. Now this is not looking a gift horse in the mouth. They were happy. It was a wonderful gift, but it was ear-marked for windows and thus windows ONLY. This group faces financial struggles like any non-profit. I thought that it was a good thing they would have great windows. It would hold in more heat this winter when their furnace dies and they have to use space heaters to keep out Old Man Winter.

We have a saying here in my office, “If you don’t trust your charity, find a new charity.”

So here’s my suggestion. Stop putting on restrictions and ear-markings and just give it to the charity you believe in. They know what they’re doing. Yes there are crooks out there, but it’s a small, small percentage. If you are unsure of a new group, ask for their tax id. They’ll freely give it to you if they are remotely reputable. Look them up. Most of the time that’s a non-issue because the group you would give to you have known a long time. I serve on the board of a jail ministry. It’s amazing. A whopping 80% of the men and women that go through the program NEVER see the inside of a jail again. If that didn’t knock a filling loose, re-read the last sentence. Here’s the thing. They are 100% operating costs. All we do is put chaplains in the jail and they are there 40-50 hours a week. Most grants pass on that worthy charity. “Let us build a building”, they say. We have one. It’s called the jail. Paid for. Here’s what we do need: another chaplain. It’s not as exciting as a building, but that is the work we do. That our core competency.

That is what you want to fund. The core competency. Do you like that better than ‘operating costs’? Does that sound sexier? Fine. Help the charity you love help puppies, feed the hungry, and shelter the homeless. Help the people that make prosthetics for wounded vets, or even that one group that makes prosthetics for exotic animals. Yes, they exist. Help them do what they do. It’s not  the exciting stuff. It’s the stuff, period.