Each year MacArthur makes grants to exceptional organizations that are key contributors to fields that are core to the Foundation's work. These organizations generate provocative ideas, reframe the debate, or provide new ways of looking at persistent problems. Some are particularly effective at delivering services or challenging old paradigms.
MacArthur makes one-time institutional grants each year to a few exceptional organizations that are key grantees and Foundation partners in our core areas of work. These grants support the long-term sustainability of these organizations. Institutional grants strengthen an organization’s operating and programmatic foundations so that it can continue its work well into the future. Organizations cannot apply for these grants; the Foundation program that supports them must nominate them for an award. Awards are made to organizations that are key to their fields and to the Foundation’s goals for those fields, exhibit strong leadership and governance, have demonstrated impact that is likely to continue into the future, and are ready to implement a plan for expansion or sustainability – not just of the programs but of the organization itself. These investments are highly useful to grantee institutions and contribute to the infrastructure of the fields in which the Foundation invests.
The MacArthur Foundation began making institutional grants in 1997, to support operating reserves, endowment funds, infrastructure investments, and other purposes that were important to helping ensure the long-term sustainability of key organizations in the fields in which the Foundation works. These were designed from the start to be different from “operating support, ” which supports all programs of the organization, or “project support , which supports specific programs. Instead, they were intended to be an investment in the organization itself. For about ten years, the Foundation made one or two such investments a year, mostly in larger organizations.
Beginning in 2006, the concept was expanded to include smaller organizations. The rationale for the MacArthur Award for Creative and Effective Institutions was that small or emerging organizations often generate provocative ideas, reframe the debate, or provide a new way of looking at persistent problems. Some are particularly effective at delivering services or challenging old paradigms.
Today, the MacArthur Award for Creative and Effective Institutions combines the large and small institutional grants into a single program. As a result, the grant sizes range between $500,000 and $1.5 million depending on the size of the organization. The purpose of these grants remains the same: to recognize exceptional Foundation grantees and help ensure their sustainability long into the future.
Institutional grants enable long-range organizational planning and greater financial stability. They strengthen an organization’s infrastructure, bring valuable public attention to the recipients and their work; and signal the Foundation’s confidence in the governance, operations and programmatic impact of these groups. When invited to prepare a proposal for institutional support, organizational leaders are asked to shift focus from their daily work and launch into a process of discussion and planning about the future of their institution with their boards, staffs and other stakeholders. The public attention to the Foundation’s support leads to greater exposure to the programs and impact of these groups and can lead to increased resource opportunities, greater credibility, and linkages to complementary organizations.
This program supports selected MacArthur grant recipients with special, one-time support awarded in one year. Organizations are selected based on an internal nomination process at the Foundation. Nominees shall meet the following criteria:
- carry out creative and effective work that is central to the Foundation’s strategic priorities and that has a positive impact on its field;
- are at a critical or strategic moment in their development;
- demonstrate strong leadership and stable financial management; and
- are equipped to deploy resources at the scale of these grants (which may be between 20% - 100% of their total annual operating budgets).
Institutional grants are different from two other types of grants commonly awarded by the Foundation: general operating support grants, which support all of the program activities of an organization during a specific period of time, and project grants, which support specific programmatic activities. Unlike these types of grants, institutional grants are one-time infusions of capital (typically one-year grants) intended to strengthen an organization’s operating and programmatic foundation so that it can continue its work well into the future.
Institutional grants are most commonly used to establish or add to an endowment or an operating reserve, which can provide a cushion in periods of insufficient cash flow (for example, when a promised grant is slow to be paid); sometimes they are used to create a venture fund to invest in the start-up of a new area of work which needs to be demonstrated before it can be funded. Sometimes funds are used to purchase real estate to house office space; owning the needed space reduces an annual cost to the organization, increases its stability, and often results in expanded programming and reach. Sometimes organizations take a small portion of the grant for strategic planning, investments in technological infrastructure, training, or strengthening an internal function like development or communications.
Grantees may use grant awards for multiple purposes provided that the rationale for spreading the funds over many interventions seems reasonable given organizational capacity and need.
MacArthur plans to conduct an evaluation of this program in the next few years to examine the outcomes of this award on recipients since the program’s inception. The assessment will consider the immediate and long term effects of the award on the an organization’s operations, the delivery of its work and the resultant impact that organization has in its communities and fields. The assessment will also attempt to understand how the attention and awareness raised about the organization and its work as a result of receiving the award affected the organization and its field.