We know that what moves the needle on human rights, social justice, climate action and more is the collective power of thousands of nonprofits working on the ground. But when these nonprofits aren’t financially healthy, constantly struggling to keep the lights on, the movements they serve cannot succeed. This is especially true during a crisis like COVID-19; when need is great, resources dwindle and barriers rise.
Justice organizations cannot respond to such crises—let alone the drumbeat of well-funded, organized opposition—if they don’t have cash reserves and diverse, stable sources of funding. Yet the funding system does not support this. Studies show that only 25 percent of nonprofits have six months of cash on hand, and our work indicates that less than one in 10 organizations have that level of reserves across the Global South.
The fate of justice movements is largely tied to the choices funders and nonprofits make in rebuilding from COVID: will we see business as usual or foundational changes, such as donors giving unrestricted, multi-year grants and nonprofits intentionally diversifying their income?
We at Ford have been working toward this shift since 2016, when we launched the Building Institutions and Networks (BUILD) initiative. This program offers 5-year, non-restrictive support and allows its recipients to make strategic decisions on how to invest grant funds.
Many BUILD grantees are also participating in the Financial Innovation and Resilience (FIRE) program, developed in partnership with Spring Strategies, which accompanies organizations to build greater financial strength. By working at the intersection of programs, strategic finance, resource mobilization, and communications, it equips nonprofits with the tools to attract more flexible, long-term funding from a variety of sources and create capital reserves. They realize a huge shift in perspectives and organizational culture, transforming their relationship to money. Currently, FIRE supports 137 Ford grantees in 28 countries, of which 74 are BUILD grantees.
We’ve seen how effective the approaches of BUILD and FIRE can be.