General operating support (also known as core support funding, or core operating support) refers to a type of grant that helps nonprofits carry out their day-to-day work. These grants often take the form of multi-year commitments, and are used to pay for the kind of expenses that are essential for an organization to function. An investment in core organizational strength, they are intended not only to enable day-to-day operations, but to help an organization build a sturdy foundation for their work that makes it possible for them to thrive in the long term.
In contrast to general operating support, project support grants provide organizations with the funds they need to develop and implement distinct initiatives. These grants are usually time-bound, and aimed at achieving specific goals and milestones.
Project support grants can also include indirect cost support (also called indirect cost rate or IDC). These are costs that are not direct results of a specific project but that an organization incurs in order to operate and effectively undertake the initiative associated with a project support grant. Examples include costs for facilities (heat, electricity), technical support, and legal and financial services.
In contrast to grants, which are not paid back, program-related investments (often referred to as PRIs) are investments in causes and communities often neglected by mainstream financial institutions. Foundations provide PRIs in the form of loans and equity investments at favorable rates. PRIs often begin as small anchor investments, which encourage other foundations, banks, for-profits companies, and government agencies to invest as well. Because PRIs are paid back, they are a way of maximizing resources—funds can be reinvested again and again.
A theory of change is a roadmap for creating lasting change. It maps the process of change from beginning to end, guiding the work ahead by identifying problems, laying out goals, and outlining short- and long-term outcomes and their likely impacts. A clear, specific theory of change makes it easier to see what’s possible to achieve—along with how and why. Learn more in this guide from Grantcraft.