Smart Money | Stanford Social Innovation Review

Smart Money | Stanford Social Innovation Review: In recent years, there has been much talk within the nonprofit sector about “strategic” or “effective” philanthropy, aimed at maximizing the social impact of foundation grants to nonprofit organizations. This talk takes place in the context of nonprofit organizations’ perennial and increasing concern that the large majority of philanthropic dollars are earmarked for particular projects – often designed by foundation staff with little or no consultation – rather than for general operating, or core, support. In 2001, less than 16 percent of the grants budgets of the thousand largest foundations provided general operating support.1 Many observers of the nonprofit sector argue that this relatively small proportion of core support seriously diminishes the efficacy and vitality of the organizations and the sector as a whole.2