Should Donors Fund Projects or Give General Operating Support?

MENLO PARK, Calif., November 18, 2009 — Nonprofit organizations need flexible funding to thrive, but whether a funder provides general support or underwrites a specific project depends on the compatibility of their interests, writes Paul Brest, president of The William and Flora Hewlett Foundation, in an essay accompanying the Foundation's recently released 2008 Annual Report.

In the essay, Brest asserts that the appropriate form of support ultimately depends on the degree to which the funder's goals align with those of the organization. A close alignment of goals and timelines may suggest general operating support, while a divergence in a significant number of the organization's activities may indicate that funding a project is more appropriate. He argues that there should be a presumption favoring general support, but that philanthropic support is only a means to the end of achieving social impact. Ultimately, he says, donors must be guided by that, above all, in deciding how to fashion their support.

Brest's most recent work, the book Money Well Spent, co-authored with Hal Harvey, former director of Hewlett's Environmental Program and current CEO of ClimateWorks, is an exploration of strategic philanthropy. Here, Brest uses examples from the Foundation's 2008 grantmaking to explore the ways funders might think about the nature of their support to nonprofits to maximize impact. In the end, writes Brest, "Funders would do well to follow the clichéd adage: the right tool for the right job."

Overall, the Foundation's annual disbursal of grants to support hundreds of nonprofit organizations worldwide reflects its position as one of the country's largest foundations. The Foundation makes grants in the areas of education, the environment, global development, performing arts, and population, as well as grants to support disadvantaged communities in the San Francisco Bay Area.

In 2008, The William and Flora Hewlett Foundation awarded a total of $784,522,000 in grants and gifts, and disbursed approximately $378,000,000 in grant and gift payments.

Visit the Annual Report Web site to view the President's Statement and the full Annual Report, or see past Annual Reports dating back to 1966.