Something interesting is happening with the money distributed by the Oak Foundation.
In 2023, 43 percent of the foundation’s grants supported the core operations of the organizations it partners with. In 2024, the number rose to 50 percent. And it’s only going one way.
“We’re moving steadily upward. And fundamentally, we’ve decided that going forward we will support the majority of our partners through core funding,” says Adriana Craciun, Senior Advisor, Organisational Strengthening and Effectiveness, at the Oak Foundation.
Oak Foundation has worked with core funding for fifteen years and is part of a movement that is spreading among foundations globally — and is beginning to gain traction in Denmark as well.
Core funding, also known as general operating support, is part of a bundle of terms like indirect costs and unrestricted funding, all of which are closely related or nearly synonymous.
These terms reflect a trend: foundations and philanthropists are loosening their grip and distributing larger, unrestricted amounts in the belief that the organizations they work with are best positioned to know how the money can create value.
The freer the funding, the better organizations can adapt, respond quickly, and focus on their core mission.
Our partners are in the field. We owe them the trust that they actually know better than we do what needs to be done.
Adriana Craciun, Senior Advisor, Oak Foundation
And according to Adriana Craciun, the share of core funding at Oak Foundation is actually higher than the figures suggest.
The foundation also allocates funds to intermediary organizations that then redistribute the money to smaller, specialized local groups.
In the books, these appear as project grants, but in practice, the funds go to core work. Including these in the tally brings core funding to more than 50 percent of Oak’s total grants in 2024.
And Adriana Craciun is convinced: trust-based funding frameworks deliver better results.
“We’re sitting in offices in Geneva or Copenhagen, but it’s our partners who are in the field. We owe them the trust that they actually know better than we do what needs to be done — and how to do it,” she says.
Oak: Core Funding Increases Impact
Adriana Craciun’s conviction is more than just a belief. It’s based on evidence the Oak Foundation has collected over the years.
In an article from last autumn, Oak’s Senior Advisor for Impact, Silvia Guizzardi, reviewed several examples of the results created by the foundation’s grants.
One example is the Indian organization Center for Study of Science, Technology and Policy, which in 2009 consisted of just three people.
Oak was the first and only foundation to provide core funding, and CSTEP has since grown into one of India’s leading climate organizations with more than 100 employees, loyal donors, and stable finances.
Oak’s funding gave the organization space to develop itself and its programs, Silvia Guizzardi emphasizes.
Another remarkable result can be seen at the grassroots organization Museum of Homelessness in London.
Thanks to Oak’s core funding, the user-led organization has been able to build an activist community that serves as a cultural center, museum, and drop-in space — all driven by people with lived experience of homelessness and addiction.
As Silvia Guizzardi notes:
“The available evidence clearly confirms our original assumption: core funding is a powerful tool that can transform organizations and amplify their impact.”
Studies Show Positive Results
Oak Foundation is far from the only one to reach that conclusion. Similar findings are highlighted in several meta-studies from the Center for Effective Philanthropy and the Bridgespan Group.
They consistently conclude that core funding offers a range of well-documented benefits — both organizationally and societally.
- Greater and More Lasting Impact
Core funding enables organizations to scale efforts, reach further, and respond quickly in times of crisis. During COVID-19, flexible support was crucial to reaching vulnerable groups. - Increased Strategic Capacity and Innovation
When funding is not tied to specific projects, organizations can think long-term, adapt continuously, and experiment with new solutions. This supports learning, innovation, and systemic change. - Stronger Financial Resilience
Organizations with core funding can better build reserves, make investments, and attract additional resources. It provides stability and strengthens sustainability. - Stronger Teams and Better Workplaces
Core funding enables investment in staff — in retention, recruitment, and development. This creates continuity and a more professional, motivated organization. - More Trust and Equal Partnerships
When funding is not micromanaged, the relationship between donor and recipient often evolves into a more equitable and trust-based partnership. But trust doesn’t happen automatically — it requires mutual transparency and clear expectations. - More Collaboration and Network Power
Unrestricted funds can be used to enter alliances and partnerships that transcend project boundaries and create broader collective influence. - Less Bureaucracy and Administration
Core funding simplifies both application and reporting processes. It saves time and resources for both foundation and organization — and makes evaluation more strategic and less transactional.
A Stronger Civil Infrastructure
These conclusions are echoed in evaluations of the world’s largest and most radical core funding initiative — MacKenzie Scott’s trust-based giving.
In the summer of 2020, she shook the philanthropic world by distributing $1.7 billion in unrestricted funds to 116 selected organizations. The only requirement: a three-page annual report on how the funds were used.
This approach is now standard for the American philanthropist, who in 2022 launched the Yield Giving platform to systematize her giving.
Since 2019, MacKenzie Scott has donated over $19 billion to more than 2,450 organizations.
We see a civil society with both the capacity and knowledge to create lasting change for people in vulnerable situations.
Jens Lind, CEO, Lind Foundation
Her giving has been evaluated three times by the Center for Effective Philanthropy. The most recent report — an in-depth study of seven recipient organizations — adds an important nuance:
Not only did the flexible funds strengthen organizational resilience and financial stability. In several cases, they also gave organizations the capacity to support others.
The report highlights how grantees built support structures that benefitted smaller, less-resourced organizations around them — which is key to building a strong and resilient civil society.
Lind Foundation: We Trust Our Partners
In Denmark, examples of core funding are still relatively few and scattered — but interest among philanthropic actors is growing.
This is evident at a conference hosted by Impact Insider on behalf of the Oak Foundation and Østifterne on May 5.
One participating fund is the Lind Foundation, which allocates nearly all of its funding as core funding.
“Core funding is the foundation of the partnerships we build,” says Jens Bruun, CEO of the Lind Foundation.
“We see a civil society with both the capacity and knowledge to create lasting change for people in vulnerable situations. That’s what we want to support — and we believe core funding is the best way to do that.”
Before a partnership is formed, a solid due diligence process ensures the organization is well-run and that there’s alignment on the goals. This lays the groundwork for a close and respectful collaboration, says Jens Bruun.
“We trust the organizations. And funding for operations is the foundation of their existence — it enables them to deliver the change we want to see.”
We Have Great Flexibility
That way of thinking and working was new to Nanna Asmussen when she became director of Fundamentet — one of Lind Foundation’s partners — three years ago.
“I’ve worked in the NGO world since I trained as a social educator 15 years ago. And I’ve never experienced working so closely with a foundation as I do with the Lind Foundation. It took me a moment to realize that it was an equal partnership. But it’s fantastic,” says Nanna Asmussen.
Fundamentet supports young people in vulnerable situations in various ways. The Aarhus-based organization runs housing for young people experiencing homelessness and helps others gain enough structure in their lives to complete a high school education.
These are efforts that require space to maneuver — and to shift course when planned activities don’t yield the intended results.
“We have a great deal of flexibility,” says Nanna Asmussen.
“I’ve previously sat in meetings with funders about projects that had deviated from the original plan, and I’d have a knot in my stomach because I knew it would be a stop-and-go meeting. That’s not the case here. We start with an idea of what the young people need — but we’re not locked into it.”
Core Funding Is Not Without Challenges
Despite all the praise, core funding isn’t without its challenges.
In her article on Oak Foundation’s experiences, Silvia Guizzardi outlines several key concerns:
- Time Frame Matters
Unrestricted funding often needs to span at least five years for the strategic benefits to fully materialize. One- or two-year grants make it difficult to recruit and retain staff — and even a three-year grant only gives organizations an 18-month respite from fundraising. - Measurement and Attribution
Core funding supports the organization as a whole — not individual projects. This makes it harder to attribute specific results directly to the grant. - Perceived Risks
Funders may worry about losing control, about partners losing focus on their mission, or about misuse of funds. But evidence suggests these concerns are often unfounded — most organizations manage large, unrestricted grants effectively.
This last point is particularly interesting, as it reflects a widespread skepticism in philanthropic circles about whether grantees can manage flexible funding.
In a survey of 37 foundations by the UK organization IVAR (Institute for Voluntary Action Research), three out of four fund leaders expressed concern.
But the concern doesn’t seem to match reality.
“These concerns are simply not borne out in our data,” IVAR writes.
And the Center for Effective Philanthropy reaches the same conclusion in its latest evaluation of MacKenzie Scott’s giving:
“Funders’ fears — whether about organizations’ capacity to manage large grants or about unintended consequences — have not materialized,” CEP concludes.
Lind Foundation Measures Every Intervention
The concern may stem from a misconception that core funding comes without expectations for measurable outcomes.
That’s certainly not the case at Lind Foundation, where the value of all interventions is assessed using the SROI method: Social Return on Investment.
It’s a method that translates effects — such as improved well-being, employment, or reduced crime — into economic value, allowing a calculation of how much society gains for each invested krone. And that measurement is non-negotiable, emphasizes Jens Bruun.
“When we enter a partnership, we also set up data collection and an SROI evaluation of the changes created. And we’re clear from the start: if an organization isn’t interested in that approach, then it’s not a good fit with us,” he says.
At the same time, he highlights an important nuance:
“It’s a strategic tool to understand the value of the changes being created across the organization — and a way to have a shared conversation about how we can generate even more impact for the money, for the benefit of people in socially vulnerable positions,” says Jens Bruun.
Complex Problems Require Flexible Funding
In Switzerland, Adriana Craciun acknowledges that it’s harder to measure direct impact when funding supports an organization’s core, compared to funding for a specific project.
“When you’re working with project funding, you have a clear goal. You have KPIs and measurements. With core funding, it’s all a bit fuzzier. Because it’s about long-term change and systemic change, it’s not as easy to pinpoint what you’ve achieved,” says Adriana Craciun, and adds:
“It’s also a matter of attribution — is the change a result of my funding, or of a whole set of other things happening in society?”
For Oak Foundation, supporting not-for-profit organisations that work to shift deep societal problems is a clear priority — and that must be reflected in how they fund, Adriana Craciun believes:
“If we truly want to tackle the very complex problems facing our society, we have to structure our funding in a flexible way — so that organizations can respond to the constant changes in their environment,” she says.
“We’re convinced that core funding is essential to contributing to a safer, fairer, and more sustainable world.”
