Hawaii Community Foundation: Unrestricted Grants

After over a decade of making planning and implementation grants in response to grantees’ self-diagnosed capacity needs, the Hawaii Community Foundation (HCF) closed its Organizational Effectiveness Program and now offers unrestricted operating support. “We had some frustration assessing our organizational effectiveness grants,” says program director Pi’ikea Miller. “Program officers could evaluate the success of an individual capacity building project, but at the end of the day, trying to aggregate data demonstrating impact across capacity building grants was really challenging.” HCF then decided to think differently about how it was approaching capacity issues. It created what it calls the “Flex Grants Program,” which provides unrestricted operating support to “high-performing nonprofits” that can demonstrate financial health, program impact, and effective strategies based on a clear rationale and informed by the communities they serve. “We absolutely believe this shift was the right thing to do. We’ve received more applications for this program than any other in our history. All the nonprofits I know are interested in operating support, and FLEX allows us to say here are the kinds of things we think effective or high performing nonprofits do well. It incentivizes nonprofits to move towards practices that are correlated with high performance. Ideally this will allow us to have a greater influence on the effectiveness of local nonprofits, influence that’s greater than if we were funding capacity building on a project by project basis.”