A Non-Profit’s Perspective on the Funding Landscape
Public health work does not happen on program activities alone. Behind every community meeting, youth leadership initiative, prevention campaign, training, coalition, policy effort, or outreach event is an entire infrastructure that makes the work possible.
Behind-the-scenes is a team who manages contracts, supervises staff, processes payroll, maintains insurance, ensures compliance, collects data, writes reports, supports technology, responds to audits, manages risk, and keeps organizations legally and financially sound. These functions may not always be visible to the public, but they are essential to delivering high-quality, accountable, and sustainable public health work.
Yet too often, grants and contracts are designed as if these costs are separate from the “real work.” They are not. They are the foundation that allows the real work to happen.
A common funding mindset separates program expenses from administrative or operational costs, treating the former as mission-driven and the latter as burdensome overhead. But this distinction is often artificial. A community health initiative cannot succeed without the basic infrastructure that keeps more than just the lights on. When these costs are excluded or minimized, they do not disappear. They are simply shifted onto the nonprofit. Over time, this weakens the very organizations funders rely on to produce results.
When grants do not cover the full cost of doing business, nonprofits may be forced to use scarce unrestricted funds or draw down their operating reserves simply to fulfill the commitments of a grant or contract. These tradeoffs affect more than internal operations. They affect the quality, reach, and sustainability of public health programs.
The consequences are predictable: staff burnout, high turnover, and a shrinking capacity to sustain programs once a grant ends. For organizations working in communities affected by long-standing inequities, this instability can be especially painful. Community change depends on trust, and trust depends on consistency. When underfunded organizations lose staff or reduce capacity, communities lose trusted partners and programs lose momentum.
This issue is also directly connected to workforce equity.
The people who carry out nonprofit public health work are skilled professionals. They manage complex programs, build community trust, and navigate everything from government contracts and data reporting to crisis response and policy change. This is sophisticated, demanding, high-stakes work.
Too often, nonprofit workers are expected to accept lower wages simply because the work is mission-driven. But passion is not a substitute for fair compensation. The people doing this work have the same financial obligations and career ambitions as professionals in the for-profit sector. If we believe public health work is essential, then the people doing that work deserve wages and benefits that reflect its value.
Unfortunately, underfunded grants make it harder for nonprofits to retain experienced staff and build stable, well-supervised teams. When talented nonprofit professionals leave for more sustainable employment, the public health system loses knowledge, relationships, and capacity.
Another common assumption is that nonprofits can use charitable donations to cover what grants do not pay for. In theory, unrestricted donations can support infrastructure, innovation, and organizational stability. In practice, charitable giving is not a reliable or equitable substitute for fully funded public health grants and contracts.
Many community-based nonprofits do not have large donor bases or deep financial reserves. Their funding often comes from restricted government and foundation funding. Expecting these organizations to raise private donations to subsidize underfunded public health work shifts responsibility away from the systems asking them to deliver results.
It also creates inequity. Organizations with access to wealthy donors or large fundraising departments are better positioned to fill funding gaps. Smaller nonprofits, culturally rooted organizations, and organizations serving lower-income communities may have deep trust and strong impact, but less access to unrestricted charitable dollars. When funders assume donations will cover the gap, they unintentionally privilege organizations that already have more financial infrastructure.
Charitable donations are valuable. They can help nonprofits grow and adapt to emerging needs. But they should not be treated as a hidden subsidy for grants that do not cover the true cost of implementation. When a funder awards a grant to carry out a public health program, the grant should include the reasonable costs required to do the work well.
This is not an argument against accountability. In fact, it is an argument for more realistic accountability. If funders want strong outcomes and responsible stewardship, they must fund the infrastructure required to achieve those goals.
Nonprofits are often asked to address some of society’s most complex challenges, including substance use, mental health, and chronic disease, among others. These challenges require skilled staff, trusted relationships, and sustained commitment.
We need to move away from asking, “How little overhead can we fund?” and instead ask, “What does this organization need to deliver high-quality, accountable, and sustainable impact?” Nonprofit infrastructure should not be viewed as competing with community impact. It is what makes community impact possible.
If we want community-based organizations to respond to urgent needs, build trust, advance equity, and create lasting change, we must stop treating the cost of doing business as separate from the mission.
It is part of the mission.
By Brenda Simmons
Institute for Public Strategies
Info@publicstrategies.org
