When Wendo Aszed, the founder of a health nonprofit in rural Kenya, is asked about her frustrations with donors, it doesn’t take long before she brings up a hot-button issue in philanthropy: restrictions on how to use donations.
The “pain point” for her is when funders won’t allow contributions earmarked for one project to be used on related emerging needs. One donor, she notes, funded family planning services — like birth control – but then objected to the money being used for HIV testing on the same women. And some, the 43-year-old added, didn’t want contributions they made prior to the COVID-19 pandemic to help implement virus safety measures at her organization, Dandelion Africa.
“They would prefer the organization closes, even if the funds were for essential services, than use their funds for prevention,” said Aszed, adding that some restricted grants even prohibit buying masks for a project. “We deserve unrestricted grants. We’ve been having these conversations back and forth with some funders who give us restricted funding. Some have gone well, and some have not gone so well.”
Unrestricted funding allows organizations to use donations on what they want. It makes an organization’s infrastructure more durable by funding overhead costs. Proponents say it also corrects donor blindspots in areas like racial equity funding, breeds trust and provides organizations flexibility to respond to shifting needs.
While Aszed’s organization gets a few of these contributions, most of its funding is restricted — earmarked for a specific project by the donor. The debate over these funding models has been around for many years. But nothing has been more galvanizing in this conversation than the pandemic, and to some extent, the racial justice protests following the police killing of George Floyd.