ISN'T EC JUST A GENERAL OPERATING GRANT?

No, but enterprise capital shares many goals with general operating grants, increasingly recognized as a more efficient alternative to restricted grants. The difference between them parallels the crucial difference between equity capital and revenue: equity “builds” infrastructure and organizational capacity, while revenue—either earned or raised—supports ongoing operations.

 

In other words, general operating grants typically target the income statement to provide a reliable source of revenue to fund operations or the delivery of programs and services. Enterprise capital bolsters the balance sheet and overall net asset position, providing funds—including cash—for investment wherever the organization needs it. A strong balance sheet offers a stable framework  for program expansion and innovation and it helps attract additional equity and debt investment from other lenders and investors.

 

In summary, EC highlights balance-sheet strength as a necessary ingredient for stability and growth and works as a companion to general operating grants. Together, the two can ensure that nonprofits have both the revenue and the net asset position they need to achieve their missions.