What evidence is there on the impact of core funding?

Image © Berit Kessler

By Silvia Guizzardi, Oak’s senior adviser for impact

Oak Foundation often gives core-support grants. In fact, core funding represented around 43 per cent of total Oak funding in 2023. We give core support grants because we believe in the advantages that core funding brings. It gives our partners flexibility, freeing them to focus on their most pressing needs and support their own development. It can also reduce the burden of managing restrictions and bespoke reporting requirements on both sides of the funder/partner agreement.

When I set out to write this article, I did not have to look far to find good examples of core funding. In fact, we have several good examples here at Oak:

• In 2009, the Environment Programme began providing core funding to the Center for Study of Science, Technology and Policy (CSTEP) in India. At the time CSTEP only had a small three-member team and a big, bold vision, and Oak was the first and only core funder. Today, CSTEP is one of the leading climate organisations in India, with more than 100 staff, multiple donors and stable finances. Oak support has enabled CSTEP’s expansion and growth, both in terms of diversity of programmes and funders.
• All Means All (AMA) is a US-based national leadership development programme that engages school principals through training and coaching to achieve outstanding results for students with disabilities. The Learning Differences Programme (LDP) has supported AMA with core funding since 2021. Our first grant (through fiscal sponsor Cambiar) enabled AMA to consolidate its training and coaching model, expand enrolment, and integrate DEI into every aspect of its programming. In its first three years, AMA served more than 100 principals from 12 US states. AMA has already impacted hundreds of thousands of students. It is now further expanding enrolment to 200 school principals per year by 2027, and consolidating its financial stability and sustainability by streamlining costs and exploring additional revenue streams.
• Established in 2014, the Museum of Homelessness (MoH) is a grassroots, community-led charity in London. Our Housing and Homelessness Programme (HHP) provides core support to MoH to develop its long-term community building and campaigning approach alongside its justice-based work. Core funding has been pivotal for MoH to bring about change. In early 2024, it opened the only site in North London to be set up and run by people with experience of homelessness and addiction.
• Open Briefing (OB) works worldwide to provide professional and appropriate holistic security and duty of care support to at-risk human rights defenders, civic activists and humanitarians working in violent or repressive environments. Oak’s International Human Rights Programme has been supporting OB with core funding since 2016. OB has seen impressive growth and has established itself as a key player in the area of protection. Its services are accessed by thousands of activists from around the world.

Core funding is known by many names, including unrestricted funding, general operating support (GOS), organisational development grants, framework agreements, or strategic/programme grants. The purpose of core funding is to allow not-for-profit organisations to focus on their missions without worrying about financial stability, cost-recovery, and staff wellbeing. Core funding provides civil society organisations with the flexibility and autonomy they need to decide where the funding is best spent.   

This all sounds amazing, right?! But then it is natural that we ask ourselves – what evidence is available on the impact of core funding?

Substantial research has been conducted to evaluate core funding. I decided to focus only on the evidence produced in the past five years. This includes evaluations of large GOS programmes – such as the multi-year evaluation of MacKenzie Scott’s extra-large unrestricted giving programme, which is widely considered pivotal in shifting the landscape towards more flexible funding models. You can find year 1 evaluation here and year 2 evaluation here, with the third year evaluation (which will be the final one) expected later this year. 

Available evidence also includes: insights from smaller core funding and organisational development initiatives; literature reviews of existing research and evidence; and interviews with different stakeholders and experts – including leaders of not-for-profit organisations that either benefit from or lack access to core funding. Most studies have used qualitative approaches, including grantee staff and leaders’ perception surveys. Other methods include: the most significant change approach; contribution analysis; learning conversations between the funder providing core funding and the pool of grantees receiving it; and scale-based rating systems.  

The overall assessment is that organisations receiving core funding report significant benefits, including:

• Bigger and better impact: organisations can expand their reach, engage in new projects, and better serve their communities. Unrestricted funds have allowed organisations to support hard-to-reach populations and address critical needs during crises like the Covid-19 pandemic.
• Strategic performance and innovation: core funding gives organisations and their leaders the bandwidth and mental space to focus on their mission, plan for the long-term and adapt quickly to changing circumstances. This flexibility fosters innovation, creativity, and risk-taking, allowing organisations the space they need to test new approaches and develop sustainable strategies.
• Financial stability and resilience: core funding enables long-term investments as well as time and resources to leverage additional funds. Organisations with strong financial health are then better positioned to attract further support and achieve their goals.
• Staff retention, development, and wellbeing: organisations can invest in their staff, offering competitive salaries and professional development opportunities. This leads to higher staff retention and a more motivated workforce.
• Builds trust: core funding can foster trust between funders and grantees. Partner organisations have more confidence to share ideas and outcomes without feeling pressured to satisfy funders’ accountability concerns or claim impact. Yet, trust is not a given outcome of core funding, as there could still be less visible and subtle power imbalances in play, which would require working on communication and making expectations explicit.
• Encourages collaboration: core funding promotes collaboration among grantees, leading to stronger networks and shared learning.
• Reduces administrative burden for funder and partners: core funding means lighter application and compliance processes. It also reduces the time the funder needs to follow up on multiple projects.

Core funding is not without challenges. Some common concerns include:

• Length matters: unrestricted funding may need to be at least five years’ long for the full strategic planning benefits to materialise. One- or two-year grants can make it hard to recruit and keep staff; and even a three-year core grant only gives organisations an 18-month respite from fundraising.
• Measurement and attribution: core funding supports the overall organisation, rather than individual projects. This makes it challenging to attribute outcomes directly.
• Equity issues: historically, organisations led by Black and Indigenous communities and people of colour have had less access to unrestricted funding. Addressing these disparities is crucial to ensure equitable support for all organisations.
• Perceived risks: funders may worry about losing control, about the partner losing sight of its mission, or the misuse of funds. However, evidence suggests that these concerns are often unfounded, with most organisations managing large, unrestricted grants effectively.

Existing literature on core funding admits that the quality and rigour of evidence on its effectiveness can be strengthened. There is widespread recognition that more objective evidence is needed, and some organisations have made efforts to develop frameworks to assess core grants (for example, see here) – although there is still more to do. Available evidence strongly supports our initial hypothesis: core funding is a powerful tool that can transform organisations and amplify their impact. We believe that by continuing to build the evidence base and addressing challenges, we can unlock the full potential of core funding to support a vibrant and resilient not-for-profit sector.