Are funders truly moving towards a fair indirect rate approach aiming for sustainability? Paula Martínez Valencia and I found that while the conversation has started, there’s still much to be done. Funders’ indirect rate allowances range from 7% to 29%, but actual needs range from 18% to 51%, varying significantly between organizations. This discrepancy distracts organizations from their mission, forcing leaders to focus on covering annual costs instead of creating impact. It’s time for this conversation to turn into real action. If funders seek impact and understand it takes time, they should contribute to sustainability by providing core funding, multi-year funding, acknowledging actual indirect rates, reducing admin burden, etc. Ultimately, it’s about building strong, trustful partnerships for the mid to long term. 👇🏼👇🏼👇🏼 It is time to action.
Are you a #policyresearch #funder? Are you supporting policy research organisations? Are you covering all their costs? Direct AND indirect? Recent research by On Think Tanks' Fiorella Bianchi Lahoud and Paula Martínez Valencia shows that the difference between real indirect costs and what funders are willing to pay for is much larger than expected: https://lnkd.in/esWbqivB Funders’ indirect cost rates range from 7% to 29% while think tanks' rates range from 18% to 51%. "This discrepancy perpetuates a cycle of underfunding and forces think tanks to allocate resources away from their core missions towards securing additional funding." Also, the language around indirect rates and the information that funders request from grantees, and how they request it, contributes to a misleading perception that lower rates equal higher efficiency; disregarding the differences between organisations, their growth trajectories and their contexts. Do you want to find out how to fund more effectively and fairly? Talk to us #foundations #realcost #fundingevidence #evidence