Note to Funders: If You Believe in the Importance of Leadership, Fund What Leaders Want to Do

Tuesday, July 8, 2014
By Nancy Wackstein, executive director, United Neighborhood Houses of New York 
This post originally appeared on the Alliance for Children and Families website here.
Many academic journal articles and even entire books are devoted to the importance of leadership to the success of organizations, whether in the nonprofit, corporate, or government realms. There are literally entire shelves in the business sections of bookstores about this topic. No matter if the research focuses on what makes effective school principals, college presidents, nonprofit executives, or corporate leaders, experts agree on the critical role of the leader in enabling an organization to achieve its mission and goals.
Yet, the funding community that supports the nonprofit sector, including foundations and individual and corporate donors, seems intent on making decisions about how and what it will fund in a way that ignores this vast body of literature.
In fact, most funding to nonprofits is restricted—set aside for a specific purpose—most typically determined by the funder’s priorities, not those of the organization’s leader. In very few instances is the leader ever asked by the funder or donor how she or he really needs or wants to use the money.
In my experience, almost 100 percent of nonprofit leaders, if asked, would say they want general operating support or unrestricted funding. Yet, a very small portion of overall charitable funding falls into this category. I understand that foundations have to accommodate the wishes of their trustees and the constraints of their endowments. I understand that corporations need and want to show their shareholders alignment between their business and philanthropic goals.
But still. There is a giant mismatch between what nonprofit leaders need and what funders fund. If, indeed, there is evidence to show that leadership really matters, why aren’t the needs and priorities of leaders more often considered when funders make their investment decisions?
If funders believe enough in a leader to invest in the organization that person leads, why not take the next step and trust that leader to make the very best decisions about how to use the money to advance the mission?
It is really time to reconcile the research and the practice.
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