Abstract
Unrestricted or flexible funding practices are increasingly popular among funders. There is initial empirical support for the assumption that fewer donor-imposed restrictions on funding have positive outcomes for nonprofit capacities, including the ability to better deal with external shocks such as presented by the COVID-19 crisis. However, academic literature on the consequences of donor-imposed restrictions is scarce, scattered, and lacks an overarching theoretical basis. In this article, we theorize how unrestricted funding may relate to nonprofit capacities and consequently effectiveness. Our theoretical propositions are derived from a review of the academic and gray literature as well as a theory-based analysis of 20 in-depth interviews with grantees receiving multi-year unrestricted funding as a substantial part of their funding portfolio. We propose a conceptual model that hypothesizes how unrestricted funding may affect seven different nonprofit capacities: (1) financial management; (2) operational capacity; (3) staff management; (4) adaptive capacity; (5) strategic planning; (6) mission orientation; and (7) innovation. This framework can function as a much-needed starting point to support academics and nonprofit leaders to better understand how unrestricted funding relates to nonprofit capabilities and consequently nonprofit effectiveness.
Original language | English |
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Pages (from-to) | 801-824 |
Number of pages | 24 |
Journal | Nonprofit Management and Leadership |
Volume | 34 |
Issue number | 4 |
Early online date | 19 Oct 2023 |
DOIs | |
Publication status | Published - Jun 2024 |
Bibliographical note
Publisher Copyright:© 2023 The Authors. Nonprofit Management & Leadership published by Wiley Periodicals LLC.
Funding
The work by Pamala Wiepking at the Lilly Family School of Philanthropy is funded through a donation by the Stead Family, and her work at the Vrije Universiteit Amsterdam is funded by the Dutch Postcode Lottery. The work by Arjen de Wit is partly funded by the Dutch Postcode Lottery.
Keywords
- donor-imposed restrictions on funding
- flexible funding
- grantmaking
- nonprofit capacities
- nonprofit capacity
- nonprofit effectiveness
- unrestricted funding