Where do foundations stand on multiyear funding?

The research is clear about the many benefits of multiyear funding. According to a literature review by the Institute for Voluntary Action Research, multiyear grants provide greater organizational stability and capacity. They take into account the longer time horizon needed to effect meaningful change, so nonprofits can dedicate less effort toward fundraising and focus more on accomplishing their missions. Multiyear funding also builds trust and strengthens relationships between funders and nonprofits.  

So, how prevalent is multiyear funding by U.S. foundations? Candid’s 2024 Foundation Giving Forecast Surveyⁱ asked large U.S. foundations about their multiyear grant commitmentsⁱⁱ in fiscal year end (FYE) 2022. Here’s what we learned: 

Two-thirds of surveyed foundations made at least one multiyear grant 

Two-thirds of surveyed foundations (67%) awarded at least one multiyear grant in FYE 2022, including 15% that awarded more than 50.  

The share of multiyear grants among total grants varied widely 

We also examined the proportion of foundations’ total grantmaking that was accounted for by multiyear grants. Among private foundations that awarded at least one multiyear grant, we found that the percentage of multiyear grants varied substantially. Fifty private foundations reported that multiyear grants made up less than 5% of their total grant commitments, while 16 private foundations reported that all their grants were multiyear. (We excluded community foundations from this analysis, as a large proportion of their grants are donor-advised. Unlike private foundations, community foundations tend to exercise little control over these grants and don’t determine their time frame.) 

Foundations differ in how they define multiyear funding 

Our survey did not define the term “multiyear,” and we discovered that foundations counted multiyear support in different ways. For example, some considered any grant with a term of more than 12 months, or 18 months, to be a multiyear grant. Other foundations reported three-year or five-year grant commitments being the norm across their grantmaking. Some foundations counted grant extensions as multiyear grants, whereas others may not have.  

Although there’s no consensus about how long grant periods must be to be considered multiyear, those with a longer time frame benefit nonprofits by enabling them to set and work toward longer-term goals.  

Some funders provide multiple years of annual support instead of multiyear funding 

Foundations reporting no or few multiyear grant commitments may still consistently renew support for the same nonprofits every year:  

• “None of our grant commitments are guaranteed from year to year but [the majority of grantees] have been receiving grants for over 20 years.” 

• “‘Multiyear grants’ is not a meaningful term for us.…We allow the grantee to determine the length of the grant. We also frequently renew existing grants.” 

Multiyear funding, however, is distinct from, and has advantages over, annual funding across multiple years. Multiyear support is considered more efficient for both funders and grantees, reducing administrative work, and is particularly meaningful for smaller nonprofits with fewer staff.  

Funders’ priorities and strategies influence multiyear funding 

Based on the survey comments, foundations may have targeted reasons for awarding short-term grants:  

• “A majority of our funding supports multiyear commitments (3 years), but our newest program [awards] one-year grants to catalyze innovative projects or programs.” 

• “In 2022, we had a separate pool of funds for capacity building grants, all of which were one-year. This explains our unusually high percentage of one-year grants.” 

Foundations with matching gift programs or donor-advised funds may also award disproportionately fewer multiyear grants.  

At the same time, some foundations may be shifting their strategies to increase multiyear funding. At least one foundation reported a change in its practice: “Our foundation board approved the use of multiyear grants for all programs halfway through the year, so that number is increasing significantly moving forward.” 

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ⁱThe 2024 Foundation Giving Forecast Survey was fielded to 2,156 U.S. foundations between January and March 2024; 527 foundations responded, a 24% response rate. Not every foundation responded to every question. The survey focuses on larger foundations, as their giving accounts for a vast proportion of the overall grant dollars awarded.

ⁱⁱThe survey questions were: 1) How many new grant commitments did you make in FYE 2022? Please do not count grant commitments that were made in prior years which may be paid out in FYE 2022. 2) Of the new grant commitments your foundation made in FYE 2022, roughly how many were multiyear commitments? Please do not include multiyear grants that were made in prior years which may be paid out in FYE 2022.