Non-Profit Funding Must Focus On Larger-Scale Problems And Break Down Silos, Says Growing Good Inc. CEO

Despite billions of dollars pouring into the US' non-profit sector each year, many organizations end up unable to produce the desired impact. Some efforts solve problems that are too specific, while others are unable to use the funding efficiently.

According to Cathryn Dhanatya, the co-founder, president, and principal of Growing Good Inc., many non-profits believe that everything is fine as long as they're doing good, and that the organization doesn't have to be run like a business. She disagrees with this mentality, especially amid changes in donor behavior and the fundraising landscape. There are higher expectations for non-profits to understand the value propositions for their mission and what they're doing with the money, as well as ensure that their budgeting matches their operations and promised deliverables.

Growing Good Inc. is composed of strategists who provide a range of services, including communications, investment impact, messaging, capacity building, donor development, and strategy for non-profits. The organization emphasizes the importance of comprehensive strategies and effective systems in the operations of non-profit organizations.

"We ask non-profits several questions, including: How are you going to manage the money when you receive it? How can you turn that into a longer term investment by a donor? What is your true impact like? How do you measure that? How do you define success? And how do you explain that to people? We ask them how much they think the project will cost, because they won't be able to achieve their goals until they know the true cost of something, even if they get a huge donation," Dhanatya says.

Aside from managing finances more effectively, Dhanatya says that for society to solve large-scale seemingly intractable problems, we need to rethink how we create siloed approaches to solutions. In order to create significant impact, rather than small, incremental improvements that do not have much effect in the long run, she suggests thinking more holistically and multi-dimensionally. She says that traditional funders are often averse to funding high-risk, high-reward projects. For example, it is easier to raise funds for a phase 3 clinical trial than a pilot study that has a real chance of failing.

To achieve these larger goals, Dhanatya believes both funders and fundees should focus more on multidisciplinary and interdisciplinary research and solutions that go beyond incremental changes and instead seek to address larger problems. Much non-profit funding today is contained in silos by separate disciplines, which could result in myopic views or echo chambers.

Says Dhanatya, "We need to support interdisciplinary work, which brings together experts from multiple fields to look at a problem differently. For instance, funding for cancer research traditionally supported oncologists, clinicians, biologists and biochemists. An interdisciplinary approach could bring in physicists, mathematicians, and computer scientists to look at the same problem, but from their own disciplinary perspective. We are already seeing this in team science research with multiple organizations' funding, where they form 'super teams' composed of the best scientists from various fields across the world to look at the really difficult problems in cancer and thereby accelerating new treatments and therapeutics for patients."

Having these additional disciplines examine pressing problems can lead to innovative solutions that could be overlooked or outside the expertise of the usual concerned disciplines. This is especially important for issues such as food insecurity and climate change, which have multiple intersecting social and political factors.

To achieve this, Dhanatya says funders have to rethink why and how they are funding research, as well as set conditions for fundees, bringing them to work together and contribute their unique perspectives and expertise. She says that "forcing the issue" has the potential to create quicker change, but it also requires a large amount of investment.

Furthermore, donors must be smarter on how they give money and invest in organizations or research that have the potential to create a larger impact. She urges donors and contributors who invest in non-profits to ensure that their money makes a meaningful return for its beneficiaries. This means making sure that the money is going to be used effectively, and that giving should not only be out of a desire to help, but instead thinking critically on how effective the funding is going to be in real, practical terms. This is not just in dollar value, but also in impact value.

Dhanatya encourages donors, big or small, to do their due diligence on the organizations they are donating to. All non-profit organizations in the US are required to file annual tax returns, which are accessible to the public. Donors should look at how their supported non-profits spend and invest their money and should not be afraid to ask tough questions to ensure the donations are being put to a good use.

"Funders have a lot of power to make a lasting impact. I want people to be thoughtful about who they're supporting and why they're supporting them. On the other hand, fundees must be realistic in order for the important work to get done. There's nothing wrong with being aspirational, but they must also be truthful. To be successful, non-profits must be able to align their operations with what they hope to do, which is why Growing Good Inc. works in partnership with them," she says.