November 9, 2015 | Read Time: 3 minutes
The widespread interest among charities to collaborate to solve thorny social problems may be yielding an unexpected bonanza for nonprofits: more of the unrestricted, general operating support they’ve been seeking for years.
The Citi Foundation is announcing today a new $20 million program to provide general operating support to charities in six cities that agree to work closely with other groups to improve economic opportunities for low-income people. Charities in Chicago, Los Angeles, Miami, New York City, the San Francisco Bay Area, and Washington, D.C., will be eligible for grants up to $500,000 over two years.
“We believe that the cities that are most vibrant have a cohort of community-based change agents — local organizations that are champions for their neighborhoods and working to create economic and social opportunity,” says Brandee McHale, the foundation’s president.
Citi Foundation’s first foray into general operating support doesn’t mean the foundation will back away from measurement of outcomes, Ms. McHale says. “We’ll still set milestones, but we don’t want to tie them down about how they use the dollars,” she says. “We’ll give them flexibility to deploy the money where they see the greatest need.”
Growing Trend
Ms. McHale says Citi was inspired by other foundations that have increased the amount of unrestricted grants they provide to reduce inequality and improve economic mobility, including the Ford Foundation, the F.B. Heron Foundation, the Chicago Community Trust, and the Bank of America Foundation.
The Center for Effective Philanthropy, which advised Citi on the new unrestricted-grant program, says its surveys repeatedly show that charities that receive large ($100,000 or more), multi-year general operating support are more likely than other grant recipients to report that the grantmaker is having a positive impact on their organizations.
“Is this the beginning of a real upswing in this kind of support?” asks Phil Buchanan, the center’s president. “I don’t know, but it is certainly encouraging.”
Ms. McHale pointed to Bridge Housing, based in San Francisco, as one type of group that Citi might want to support, although she emphasized that Citi had not made any decisions about grants. The charity builds affordable housing, but contracts with local agencies to bring in programs focused on academic enrichment, English as a second language, and financial literacy, among others.
“Affordable housing isn’t their end goal,” Ms. McHale says. “Their goal is to transform those neighborhoods and make them places of opportunity.”
Broad Approach
Sarah Rosen Wartell, president of the Urban Institute, says Citi is wise to give organizations more freedom to find a comprehensive approach to solving community problems.
“We see from the work that we do that the best chance for making measurable change is when organizations break down silos and work collectively with others,” Ms. Wartell says. “They focus on the health of individuals in the community as a whole, rather than delivering a particular housing, criminal justice, or workforce-development outcome.”
Citi Foundation, the philanthropic arm of the financial-services giant, grants about $78-million per year, with roughly half that amount going to U.S. charities.
Volunteer teams from the company will assist the new grantees, in areas such as human resources, finance, and communications, Ms. McHale says. Citi also plans to bring the grantees together, to learn from each other and from national experts at the Urban Institute and elsewhere.
Focusing on Income
The new program, called the Community Progress Makers Fund, fits with other recent efforts by the foundation to help low-income individuals and communities. Last year, the foundation started a three-year, $50 million program to help 100,000 low-income youths develop the workplace skills and leadership experience necessary to better compete for jobs. The foundation recently concluded a two-year, $3.25 million program to identify high-performing organizations that could serve as “community quarterbacks” and coordinate local efforts focused on economic development.
Citi will put out a request for proposals today. The deadline for applying is January 8. The foundation expects to announce its awards by June, and bring all grantees together for the first time in September. More information about the Community Progress Makers Fund is available on the foundation’s web site.
