The Future of Grantmaking: Diversifying Funding to End Scarcity and Structures of Oppression

HSF has committed to amplifying community voices and is very happy to be partnering with some wonderful thought leaders on this series of pieces addressing the need to shift the narrative of scarcity in the human service sector. It is a great honor to have Ward S. Caswell, President of The Beveridge Family Foundation, join us to discuss the importance of alternative funding options. 


As the president of a family foundation that has a special focus on supporting local programs supporting youth development, health, education, religion, art, and the environment, I have become frustratingly aware of the changing challenges nonprofits are facing, and the patriarchal systems that current funding models perpetuate. In the past five years, The Beveridge Family Foundation has made alternative funding research a key focus in its work, and has formed a partnership with the Human Service Forum, Innovation Accelerator, and others to launch an Alternative Funding Initiative. 

The history of non-profits is intertwined with the history of white supremacy, male breadwinner models, and the aristocratic feudal economy. Legacies of each remain apparent in the predominance of wealthy, white male-dominated philanthropic boards, white female-dominated nonprofit staff, uncompetitive and unequal pay scales, grueling grant application processes, and deeply entrenched scarcity mindsets.

For those seeking to improve the situation, removing pejorative language from the discussion helps open dialogue, but real change must be addressed with a clear vision of more equitable, inclusive, efficient, and effective solutions. This piece looks at ways to re-engineer the financial structure of philanthropic relationships to break out of the trap of white male dominated grantmaking.

As pay scales of historically female-dominated roles slowly increase, it is important for society to recognize the importance of the roles of caregivers, teachers, mentors, and those who do essential work in a well-functioning society. Rather than continue to negotiate incremental change within slow-moving structures, rapid and sustainable change may come from a different outlook on organizational funding.

What could it look like to escape the cycle of funding scarcity? 

Let’s look at some differences between non-profits, and other industries with higher wages. For the sake of comparison, we’ll compare non-profits with for-profits. Some of the differences in funding sources are set forth within IRS guidelines such as the prohibition against passing on profits to shareholders. That prohibition does not mean that non-profits may not have positive cash-flow from their operations.

Within IRS guidelines, non-profits are able to make use of fixed and variable rate loans including those from affiliated persons, though the loans must be disclosed. Non-profits are not able to raise funds through either public or private offerings of stock. However, they are able to raise funds through bond offerings, including the complicated yet promising concepts of Social Impact Bonds, also known as the “Pay for Success” model. 

Social Impact Bonds (SIBs) are funded by investors who are repaid principal plus interest by another entity. SIBs allow for an abundant rather than scarce funding level and allow a non-profit to secure funding over a longer period, allowing them to focus on desired outcomes. 

While SIBs would require nonprofits, governments, data analysts, and investors, to improve data collection, adjust budgetary planning, and shift to investment strategies rather than charitable giving, they have the advantage of being ideologically agreeable to both sides of the political divide. Unfortunately, with so many changes needed by four different organizational segments, SIBs will likely take decades to become more commonplace. We should continue to work towards such structures over time by facilitating better data collection, deeper relationships with legislators and funders, and alignment of mission and outcome in every level of our processes.

While working towards abundant funding through SIBs may be the long game, it allows us to imagine and plan for a sector that isn’t operating from an environment of constant scarcity. If the nonprofit sector had the financial abundance to incorporate values of equity and compassion into its operations, what would it look like and how would we define our goals? We could begin to prioritize greater equitability in pay scales for staff and leadership, reduced staff burnout, faster evolution of project and program models to achieve superior outcomes, scaled solutions that are more aligned to levels of need, and most notably, reduced dependency on charitable giving. Charitable giving, especially when it is the primary source of funding, presents its own set of ills, including highly variable levels of funding, high expenses with low net proceeds, donor imposed restrictions and guidance that are not expert based, and indigestion from consuming too much rubber chicken at awkward funder dinners and galas. 

So how do we get from here to there? 

In 2018, the Beveridge Family Foundation partnered with the Human Service Forum (HSF) to promote a variety of alternative funding strategies. These strategies were developed after decades of listening to local non-profits as they attempted to overcome limitations of traditional funding models. Alternative funding sources include:

  1. Government Funding
  2. Program Revenue
  3. Volunteer Development
  4. Endowed Projects
  5. Extensive Cost Recovery Strategies
  6. Parallel For-Profit Activities
  7. Social Impact Bonds

A survey of local organizations found varying levels of implementation for each strategy. You can read more on our findings here

If your organization is considering alternative funding, it is important that your non-profit think creatively about how you might be able to diversify your income with these strategies. Stack rank opportunities by criteria including:

  • income potential
  • negative impacts
  • alignment with mission 

Develop a plan to implement the highest-ranking strategies. Regularly review progress, new challenges, and adjust the plan as you learn. Using a good process, you can diversify your income for a more resilient and abundant cash flow.

What progress has been made so far?

We at the Beveridge Family Foundation are proud of the work that has been done in several key areas. Local achievements in each alternative funding area include:

  1. Government Funding
    1. Community Investment Tax Credits (CITC) as well as Block grants have been used successfully by a growing number of non-profits to garner large funding amounts that offer benefits for donors. 
    2. Many non-profits benefitted from pandemic-era relief programs to survive (and in some cases thrive) during the pandemic.
    3. Some have received increased levels of state funding for important programs.
    4. HSF continues to engage leaders from state government in conversations with HSF members.
  2. Program Revenue
    1. Innovative models for scaled payments have been more prevalent in several areas. 
    2. Third-party payer structures continue to be a struggle.
  3. Volunteer Development
    1. Volunteer VQ Strategies held a workshop with 38 organizations participating.
  4. Endowed Projects
    1. More non-profits have initiated capital campaigns for endowed projects to raise funding to help individual programs maintain consistent funding levels over time.
  5. Extensive Cost Recovery Strategies
    1. Alysa Wright has worked with non-profits on a series of changes to help them be more efficient.
    2. Catchafire came to Western Massachusetts through another partnership between the Beveridge Family Foundation and the Human Service Forum with strong support from the Davis Family Foundation and The Community Foundation of Western Massachusetts. In the first six months, 61 HSF members have started with Catchafire and 32 have initiated projects making use of 406 hours of free talent through the Catchafire’s portal. 
  6. Parallel For-Profit Activities
    1. Through the work of the Innovation Accelerator a dozen area non-profits have completed the first steps in defining new models for programs that could improve cashflow and operating results.
    2. The Innovation Accelerator is now beginning the next step in the evolution of implementation with a select group of graduates.
  7. Social Impact Bonds
    1. Treehouse and others have explored SIBs for large-scale expansion projects. In each case, the journey towards SIBs provided organizations the data and arguments needed to gain approval for land acquisition and significant funding without the need for bonds.

With many non-profits showing success, the Beveridge Family Foundation has found potential for an intersection between sustainable funding, profitable programs, scalable programs, and impact investment opportunities.

Impact investing for foundations is a growing practice where investments are moved from traditional stocks and bonds into more mission-aligned structures. Implementations such as place-based investments, Environmental Social and Governance (ESG) fund practices. ESG investments use stock screening, proxy voting, and targeted investing. Targeted investment criteria vary widely based upon the beliefs of the foundation. 

For Beveridge, there is a strong desire to invest in Western Massachusetts. We are excited by possibilities to invest in non-profit programs. If those programs have truly developed profitability, with the opportunity to increase in scale, we would be thrilled to provide larger amounts of funding than we could with a grant. That would allow foundations to use a portion of the 95% of their assets to invest in supporting non-profits, rather than the 5% they issue each year as grants. Investment funding could provide a base of funding to support equitable pay, increased scale, and less dependence on traditional fundraising. Perhaps working with women and BIPOC led funders in a new financial structure could lead to relationships where non-profits move from scarcity to abundance.

To create the kind of powerful change needed to move nonprofits out of the cycle of scarcity, nonprofits will need to work together to apply the necessary pressure on governments, data analysts, and investors. Group action and organization will be required for the next phase of change. Membership organizations like the Human Service Forum can serve as a focal point for knowledge sharing and ideation, but we will need a greater level of participation to tip the balance towards a more abundant future. 


What alternative funding models are you exploring? What else can we do as a sector to organize and move these agendas forward? Please share your thoughts by reaching out to us at, we’re eager to learn from you all, and collectively move towards a more just and prosperous society. 

This blog is part of a series published by HSF exploring the state of philanthropy and the social good sector.

Ward. S. Caswell

Ward S. Caswell, President, The Beveridge Family Foundation, Inc.

From the arts, to youth development, to environmental causes, to faith-based charities, the Beveridge Family Foundation exists to fund institutions in Hampden and Hampshire Counties, Massachusetts that serve the common good. As President, Ward directs the activities of the Foundation and works with the Board of Directors, Chairman, and staff to foster and extend the mission and vision of its founder, Frank Stanley Beveridge.