More Than a Program: Why Unrestricted Giving Matters.

Understanding the real cost of helping families move from crisis to stability.

When someone makes a gift to a nonprofit, it is natural to want to know exactly where that money goes. Will it provide shelter for a family? Help a parent get to work? Purchase supplies? Assist a family as they move into stable housing?

At Family Promise of Baldwin County, the answer may be yes to any of those things.

But there is another kind of giving that is just as important and often less understood: unrestricted operating support. Unrestricted gifts allow a nonprofit to use funding where it is needed most. Instead of requiring every dollar to be assigned to one specific program, purchase, or activity, unrestricted support gives an organization the flexibility to respond to real needs as they arise. And in the work of helping families experiencing homelessness and housing insecurity, those needs rarely fit neatly into one category.

A family’s path toward stability may involve housing, transportation, employment, childcare, documents, case management, basic necessities, and connections to other community resources, all at the same time. The organization supporting that family must have the staff, systems, facilities, training, technology, administration, and resources necessary to respond.

That is where unrestricted giving becomes extraordinarily valuable.

Myth: “Administrative” or operating expenses don’t help the mission.

Fact: They make the mission possible.

There is sometimes a misconception that the best nonprofit is the one that spends almost nothing on administration or overhead. Leading nonprofit organizations and charity experts have challenged that idea for years. The National Council of Nonprofits notes that focusing heavily on overhead ratios can give donors an incomplete picture of effectiveness; strong nonprofits also need sound leadership, financial management, technology, staff development, fundraising capacity, and other infrastructure to deliver results. (National Council of Nonprofits)

Think about any successful organization. Someone has to answer the phone when a family calls for help. Someone has to conduct an intake, coordinate services, maintain records, manage grants, pay insurance and utilities, train staff, maintain technology, communicate with community partners, oversee finances, and keep the organization functioning every day. Those expenses may not always fit neatly beneath a particular program heading. They are still part of serving families.

Myth: “My entire donation should go directly to a program.”

Fact: Programs cannot operate without people and infrastructure.

A shelter program without trained staff cannot serve a family. Case management without qualified case managers does not exist. A transportation program cannot operate without coordination. A facility cannot serve families without insurance, maintenance, utilities, supplies, and administration. Even fundraising itself costs money, and fundraising is what allows a nonprofit to continue providing services long after a single grant or donation has been spent.

Bridgespan has described chronic underfunding of these essential costs as a nonprofit “starvation cycle”: organizations are expected to produce strong results while being discouraged from investing in the infrastructure required to produce them. Its research argues that donors should focus more on outcomes and what those outcomes realistically cost rather than relying primarily on a low overhead percentage as a measure of effectiveness. (Bridgespan)

Myth: Restricted funding is always more responsible.

Fact: Restricted and unrestricted gifts both have important roles.

Restricted funding can be incredibly valuable. Grants and donations designated for a specific program, project, or purchase allow organizations to expand services, purchase needed equipment, launch initiatives, and accomplish specific goals. We are deeply grateful for that support. The challenge comes when nearly every dollar is restricted. A grant may pay for one specific service but not the staff training required to deliver it. Another may purchase supplies but not cover transportation. Another may fund a particular program while excluding technology, administrative coordination, insurance, facility expenses, professional development, or other operational needs. The organization is still responsible for all of them. Unrestricted funding helps fill those gaps. Research on unrestricted giving has found that flexible funding can strengthen nonprofit resilience, allow organizations to invest in staff and organizational capacity, improve long-term planning, and give leaders greater ability to respond when circumstances change. (The Center for Effective Philanthropy)

Myth: Unrestricted means unaccountable.

Fact: “Unrestricted” does not mean “unmanaged.”

An unrestricted donation does not become money without oversight. It becomes funding that organizational leadership can allocate according to current needs and priorities. Nonprofits still operate within budgets, accounting practices, board oversight, financial controls, grant requirements, and their charitable mission. The difference is that flexible funding allows leaders who are closest to the work to determine where those dollars can make the greatest difference at that moment.

Candid describes general operating support as funding the organization and its mission rather than restricting the contribution to one particular project. That flexibility can allow nonprofit leaders to direct resources where they believe they will be most effective. (Candid)

At Family Promise of Baldwin County, unrestricted operating support can help sustain the pieces of our work that do not always fit within a narrowly defined grant. It can help support trained staff and case management capacity. It can help with administrative coordination, program supplies, facility needs, professional development, transportation-related support, technology, and the everyday expenses required to keep services available when families need them. It also gives us the ability to respond to the family standing in front of us. One family may need intensive case management. Another may need help avoiding eviction. Another may need transportation support so a parent can maintain employment. Another may need help securing documents, applying for housing, connecting with community resources, or overcoming an unexpected barrier threatening the family’s stability. Real life does not arrive divided into grant categories.

Flexible support allows us to meet families there.

To the donors who trust us: Thank you.

Some of the most meaningful words a nonprofit can hear from a donor are:

“Use this where you need it most.”

That is an extraordinary expression of trust.

To every individual, business, foundation, church, civic organization, and community partner who has made an unrestricted gift to Family Promise of Baldwin County:Thank you!

Thank you for understanding that keeping families together requires more than funding one visible moment. Thank you for helping us maintain the people, systems, resources, and capacity that allow us to answer when a family needs help. And thank you to every donor who has supported Family Promise, whether your gift has funded a particular program, provided needed goods or services, supported an event, sponsored our work, or simply arrived with the instruction to use it where it can do the most good. Every form of generosity has a place in this mission.

Give where the need is greatest

When you choose unrestricted giving, you are not giving to “overhead.”

You are giving Family Promise the flexibility to put resources behind the people and needs that require them most. You are helping make sure the doors can stay open, qualified people are there to answer them, programs have the support they need to operate, and families can continue receiving thoughtful, individualized assistance on their journey toward stability.

Because keeping families together takes more than a program. It takes a strong organization, and a community willing to stand behind it.

To support Family Promise of Baldwin County and help us respond where the need is greatest, we invite you to make an unrestricted gift today.

~ Lillian

Director of Fund Development

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