Ideas

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Strong communities don’t happen by chance—they depend on strong organizations with the capacity to lead, adapt, and sustain change. In this article, Kien Lee and David Chavis examine growing evidence showing how general operating support strengthens nonprofit organizations, intermediary organizations, and ultimately the communities they serve. Drawing on recent research and Community Science evaluations, the post explains why unrestricted funding should be viewed as an investment in community capacity building infrastructure rather than simply another grantmaking strategy.

Why Strong Organizations Are Essential for Strong Communities

Building community capacity to improve community conditions and advance equitable outcomes does not happen one grant, one program, or one organization at a time. It requires an infrastructure that connects organizations to opportunities, resources, knowledge, and one another. Intermediary organizations are a critical part of that infrastructure. They help community organizations develop leadership, strengthen organizational functions, mobilize resources, influence policy, support learning, and build relationships across communities and institutions. Community organizations, in turn, organize residents, advocate for local priorities, and drive solutions that meet community needs.

Communities are only as strong as the organizations that support them. When those organizations have the resources to build leadership, strengthen operations, and respond to changing conditions, they are better positioned to create lasting community and systems change.

Why General Operating Support Matters

Because these functions are ongoing rather than project- or program-based, both intermediary and community organizations need funding that strengthens the whole organization, and not just individual programs or services. Multi-year unrestricted funding or general operating support allows organizations to build the leadership, staffing, organizational systems, relationships, and financial resilience they need to sustain this work and adapt as community priorities and conditions evolve.

General operating support gives organizations the flexibility to invest where the need is greatest. That flexibility enables them to strengthen internal capacity, respond to emerging challenges, and pursue opportunities that would otherwise be difficult to address within narrowly defined grant requirements or that foundations cannot fund directly.

What the Evidence Shows

Research examining the effects of general operating support has grown considerably over the past decade. Collectively, the literature and evaluation findings point to several consistent benefits.

Organizations are better able to respond to complex systemic and community challenges. General operating support enables organizations to respond to the interconnected nature of community challenges through organizing, advocacy, leadership development, and coalition building. Community Science’s evaluation of The Colorado Trust’s Building and Bridging Power initiative found that providing general operating support to grassroots and policy advocacy organizations strengthened organizational capacity. In turn, those organizations were better able to organize, advocate, build leadership, and develop relationships and networks to address their communities’ concerns. This work resulted in measurable policy outcomes, including 16 state policy changes and seven local policy changes among 21 participating organizations. The initiative also enabled the participating organizations to respond to rapidly changing conditions during and after the COVID-19 pandemic, demonstrating the value of general operating support when communities face unexpected challenges.

Our evaluation of the Conrad N. Hilton Foundation’s unrestricted funding involving more than 30 national and regional nonprofit organizations, including several intermediaries, produced similar findings. Intermediaries were better able to support frontline organizations as they mobilized and advocated for changes that improved people’s lives. Collectively, these grantees helped more than 2.2 million people access housing assistance, legal services, public benefits enrollment, community safety resources, educational supports, and leadership development opportunities. These findings suggest that general operating support can serve as an indirect but powerful mechanism for strengthening advocacy and organizing when foundations are unwilling or unable to fund those activities explicitly.

Organizations become more innovative and adaptive. Research by Levere (2026) and Steele (2025) examined multiple unrestricted funding initiatives and found that this grantmaking approach allows nonprofits to innovate and adapt, especially in the face of uncertainty. Rather than being constrained by narrowly defined program goals and reporting requirements, organizations can respond to changing community conditions and emerging opportunities.

The evaluations described reinforced this conclusion. Both initiatives occurred during the COVID-19 pandemic and its aftermath, when organizations had to shift priorities, redesign services, and respond to rapidly changing community needs.

Similarly, Grantmakers for Effective Organizations (GEO) has published several resources emphasizing that unrestricted funding allows organizations to allocate resources where most needed and how accountability should focus on mission effectiveness rather than compliance with narrowly defined project outputs. Publications such as How Can We Evaluate the Impact of Our General Operating Grants and What is General Operating Support and Why Is It Important, make this case persuasively.

Organizations improve their efficiency. General operating support also strengthens organizations by allowing them to invest in staff, technology, infrastructure, strategic planning, and continuous learning. Stronger organizations, whether intermediaries or community-based organizations, are necessary for an effective infrastructure for community capacity building. They connect people, resources, and opportunities in ways that individual grants and programs cannot.

A growing body of evidence supports this conclusion. IVAR (2023) and Steele (2025) found that unrestricted funding helps organizations become more resilient, strategic, and effective. Likewise, NIRAS’ evaluation of Ford Foundation’s BUILD initiative (2022), which combined multi-year unrestricted support with institutional strengthening investments, documented improvements in financial resilience, leadership, governance, systems, partnerships, and adaptive capacity. Approximately 83% of BUILD grantees surveyed reported improved financial resilience.

Hung and Berrett (2025) reached a similar conclusion in their analysis of 2,541 Habitat for Humanity organizations, finding that greater unrestricted resources were associated with higher nonprofit efficiency.

General operating support also helps advance equity. Organizations rooted in historically marginalized communities often face chronic underinvestment and are disproportionately constrained by short-term, restricted grants (Dorsey, Bradach, & Kim, 2020; Pollard, 2026). Their leaders also experience high levels of burnout (GEO, 2022).

General operating support helps address these structural funding inequities by giving these organizations the resources and autonomy to define priorities alongside the historically disadvantaged communities they serve. It also enables them to invest in community organizing, policy advocacy, coalition building, and leadership development — the very strategies needed to address the systemic issues that produce inequitable outcomes.

This pattern was evident in the evaluation of the Hilton Foundation’s initiative. General operating support strengthened the intermediaries and positioned them to provide technical assistance and leadership development and regrant unrestricted funding to smaller, lower-capacity community organizations working on the frontlines of economic, health, education, and other disparities. They were able to absorb the risks that many funders are reluctant to take with such organizations. Collectively, they reached more than 2.2 million people, as mentioned before, and also convened and strengthened the leadership of more than 25,000 individuals.

How Strong Organizations Strengthen Communities

Taken together, the literature and evaluations illustrate an important pathway to community and systems change. General operating support does not produce community outcomes directly. Instead, it strengthens organizations, and stronger organizations are better able to develop leaders, build partnerships, influence policy, support local organizations, respond to changing community priorities, and help communities solve problems collectively and more immediately. This pathway is particularly important for intermediary organizations, whose primary contribution is not delivering a single program or service. Rather, they strengthen the capacity of community organizations, connect them to resources, foster collaboration, and help build the infrastructure that enables communities to create lasting change.

Yet despite this growing body of evidence, general operating support remains the exception rather than the norm.

Why Philanthropy Still Hesitates to Provide General Operating Support

Limited understanding about how organizational capacity is connected to community and systems change outcomes. Organizations such as Grantmakers for Effective Organizations, Center for Effective Philanthropy, and Bridgespan have increasingly emphasized the value of unrestricted funding. However, so many foundation executives and boards continue to view investments in organizational capacity as separate from, or even competing with, investments in community outcomes.

Our work with foundations suggests several reasons for this disconnect.

Explaining the return on investment for general operating support requires more than a few summary statistics presented to a board. It requires understanding this support strengthens organizations which form the infrastructure for community and systems change. In contrast, measures such as the number of people served or programs delivered are easier to understand and often feel more immediately compelling.
Some foundation leaders also worry that unrestricted grants will create expectations for long-term financial support beyond what their institutions are prepared to provide. Others remain concerned that investing in organizational capacity somehow reduces investments in direct community outcomes.

As a result, conversations about organizational capacity often end before foundation leadership and boards fully understand how strengthening organizations contributes to lasting community and systems change.

The evidence base needs to be expanded. These findings also highlight several areas for further exploration to strengthen our collective understanding of the effects of general operating support:

• Incorporate additional data sources beyond grantee self-reports to provide a more comprehensive and balanced evidence base.
• Examine more deeply how general operating support aligns with an organization’s mission, strategic priorities, and organizational capacity.
• Explore how organizations with varying levels of capacity (low, moderate, and high) experience and use general operating support, including the conditions that enable or constrain its effectiveness.
• Identify communities demonstrating positive community-level outcomes and examine whether organizations receiving general operating support in those places contributed to those outcomes.
• More appropriate intermediary outcomes need to be developed, applied, and tested that demonstrate concrete changes such as changes in organizational policies and practices as well as relationships which have been shown to contribute to community and systemic change.

These suggestions point to opportunities for future research rather than weaknesses in the case for general operating support. The evidence consistently demonstrates that this funding approach strengthens organizations. The next step is to better understand—and continue documenting—how stronger organizations contribute to stronger communities and more effective systems over time.

What Foundations Can Do Next

If philanthropy is serious about strengthening communities, it must think beyond individual grants and programs and invest in the infrastructure that makes community change possible.

Intermediary organizations are a vital part of that infrastructure. Their greatest contribution is not delivering a single program but increasing the capacity of community organizations to mobilize and organize communities, build local leadership, solve problems, influence policy, and sustain change over time. For these reasons, flexible, multi-year general operating support is more than an improved grantmaking practice. It is a strategic investment in the infrastructure that enables stronger organizations to build stronger communities.

At the same time, foundations’ concerns about creating long-term financial dependence are understandable. Foundations should consider when making the grant that the size of grants should be sustainable for that particular organization in its context and include intentional transition strategies that help grantees diversify their funding from the start. These strategies might include supporting fundraising capacity, encouraging collaborative funding models, establishing funding consortia, and intentionally connecting grantees with broader philanthropic networks.

Conclusion

Communities are only as strong as the organizations that support them. The evidence increasingly shows that general operating support strengthens nonprofit organizations by giving them the flexibility to invest in leadership, people, systems, partnerships, and learning. Stronger organizations are better equipped to organize residents, advocate for policy change, respond to emerging challenges, and build the relationships that sustain community and systems change.

References

Buteau, E., Marotta, S., Martin, H., Orensten, N., & Gehling, K. (2020). New attitudes, old practices: The provision of multiyear general operating support. Center for Effective Philanthropy.

Buteau, E., Im, C., Marotta, S., Martin, H., & Gehling, K. (2023). Emerging impacts: The effects of MacKenzie Scott’s large, unrestricted gifts. Center for Effective Philanthropy.

Community Science. (2024). Building and Bridging Power strategy, grassroots and grasstops components: Final evaluation report—Executive summary. The Colorado Trust.

Dorsey, C., Bradach, J. L., & Kim, P. (2020). Racial equity and philanthropy: Disparities in funding for leaders of color leave impact on the table. The Bridgespan Group and Echoing Green.

Grantmakers for Effective Organizations. (2014). How can we evaluate the impact of our general operating support grants?

Grantmakers for Effective Organizations. (2022). Centering equity through flexible, reliable funding: Resourcing BIPOC leaders

Hung, C., & Berrett, J. L. (2026). Exploring the dynamics: The relationship between unrestricted resources and nonprofit efficiency. Nonprofit and Voluntary Sector Quarterly, 55(2), 446–474.

Institute for Voluntary Action Research. (2023). Making the case for unrestricted funding.

Levere, A. (2026, January 12). The evidence is in: Unrestricted funding works. Forbes.

NIRAS. (2022). BUILD evaluation final report. Ford Foundation.

Pollard, J. (2026, April 7). Black-led nonprofits didn’t see the lasting funding boosts promised after 2020’s racial reckoning. Associated Press.

Smith Arrillaga, E., Buteau, E., Im, C., & Grundhoefer, S. (2025). Breaking the mold: The transformative effect of MacKenzie Scott’s big gifts. Center for Effective Philanthropy.

Steele, L. (2025, May 27). No strings attached: A guide to giving unrestricted funds. Submittable.

About the Authors

Questions this post answers

• What is general operating support?
• Why does unrestricted funding matter for nonprofit organizations?
• How does general operating support strengthen organizational capacity?
• What evidence supports flexible, unrestricted grantmaking?
• Why are intermediary organizations important for community change?
• How do stronger organizations contribute to stronger communities?
• Why are many foundations still reluctant to provide general operating support?
• What barriers prevent wider adoption of unrestricted funding?
• How can philanthropy invest more effectively in community infrastructure?
• What role does organizational capacity play in systems change?
• How can foundations balance flexible funding with long-term sustainability?