By Richard H. Levey

Intermediaries take a lot of worry out of nonprofit funding. Organizations that specialize in directing funding are believed to bring deeper expertise and impact to their fields of focus, have insight into best practices within specific issues and areas and concerns and be more adept at funding initiatives and organizations that advance knowledge in their fields, according to a new report. 

But intermediaries are also likelier to spread largesse around more thinly. Grantees received median funds of $75,000 from intermediaries, compared with $150,000 from other funders, per the report.

The report, BRIDGING THE GAP: Grantee Perspectives on Intermediary Funders, was just released by the Center for Effective Philanthropy (CEP), a Cambridge, Massachusetts-based think tank that provides data, feedback, programs, and insights to help individual and institutional donors improve their effectiveness. Researchers also found that, in addition to communication and research competencies, intermediaries placed a higher priority in equity and diversity considerations in their work, although their commitment to diversity, equity and conclusion when presented as an issue was similar to that of originating funders.

Intermediaries were more likely to shine when it came to developing deep relationships with communities and understanding their needs. For this reason, intermediaries can play a valuable role in facilitating these needs between the recipients and the originating funders. This competency, however, is not universal. As the report’s authors noted, “[T]he evidence is mixed in terms of whether intermediary funders meaningfully and consistently outperform originating funders in their relationships and communications with grantees.”

“I was [previously] executive director of a nonprofit, and we served as an intermediary,” report co-author and CEP Vice President of Research Elisha Smith Arrillaga told The NonProfit Times. “We re-granted funds to about 10 to 12 smaller, community-based organizations. The total of those funds was not large, and there were some restrictions around, how that initial funder was hoping those funds would be spent,” she said.

What often plays out is that an originating funder decided to work through an intermediary because they want to be close to the community, to find organizations they couldn’t otherwise find. But sometimes doing that then means the nonprofits end up getting smaller grants with more restrictions, because it’s passing through another layer of complexity before it actually gets to the organization itself, she explained.

Grantees also look to intermediaries to provide more frequent and open communications, with intermediaries more likely to be in contact with their funder monthly or more often, while originating funders having such contacts only a few times a year.

Grantees additionally indicated intermediaries were slightly more likely to have an understanding of the grantees’ fields; advance the state of knowledge about the grantees’ fields; have an understanding of how their works fits into the funder’s broader efforts; or express openness to grantee ideas about funder strategy. Grantees also believed originating funders were slightly more likely to have an impact on grantees’ organization; have an understanding of grantees’ goals and strategies; trust in grantees; have compassion for those affected by grantees’ work; or have respectful interactions.

Grantees rated intermediaries and originating funders as equally likely to have an impact on grantees’ fields; maintain clear communications about diversity, equity and inclusion; have a strong commitment to diversity, equity and inclusion; or be clear in terms of their communications regarding the funder’s goals and strategies.

“One of the questions we pose at the end of the report, and that we suggest people think about is, even if you’re using an intermediary, what are the mechanisms you want to use to be communicating with those grantees, even though you’re granting to them through another third party?” Smith Arrillaga said. “How are you still building those relationships or helping those organizations understand how your mission is connected to their mission? That’s still important, too.”

CEP based its analysis in part on data from 24 organizations — with responses from 3,444 grantees — that are intermediaries. According to the report’s authors, CEP defines intermediary funders as “organizations that receive money from other institutional funding sources (“originating funders”) to distribute on their behalf. These include nonprofits that act as regrantors, donor collaboratives, and other structures. For the purposes of CEP’s research, this definition excludes donor-advised fund providers, community foundations, and giving circles.” In doing so, the authors were able to “compare the experiences of those receiving grants from intermediaries with the experiences of those receiving grants from originating funders in our dataset.”

The report is available here: https://cep.org/report-backpacks/bridging-the-gap-grantee-perspectives-on-intermediary-funders/?section=intro

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Source From Non Profit Times