This week I was on an NDOA panel to discuss the importance of unrestricted funds. I was there with another nonprofit leader as well as two funders, and all of us, everyone in the room, agreed that general operating funds are awesome. General operating funds are like Tyrion Lannister of Game of Thrones, or Darryl Dixon of The Walking Dead, or, you know, Sophia from The Golden Girls: It is flexible, it is adaptable, and that’s why it gets stuff done.
For years I have been railing against restricted funding to anyone who would listen. I wrote a piece imagining what it would be like if a bakery ran with the same funding restrictions as a nonprofit: “I need a cake for some gluten-free veterans. I can pay you only 20% of the cost of the cake, and you can only spend my money on eggs, but not butter, and certainly not for the electricity; you have to find someone else to pay for the oven’s electricity. Also, you need to get an accounting firm to figure out where you’re spending my money, but you can’t use my money to pay for that service.” (Read the full post: “Nonprofit funding: Ordering a cake and restricting it too“). Continue reading