In mid-June, five foundations convened roughly 55 foundations and grantees, including OMB Watch, for a day-long meeting to discuss general operating support and other funding issues. During the meeting there was considerable support for two points -- foundations should do more general operating support, and foundations should cover the real costs of overhead. The co-hosts of the meeting agreed to pursue more detailed documents on these points. They appointed two committees and have announced that a process will unfold allowing others who could not attend to provide comments on the materials once they are developed. Below is the statement of the foundation co-hosts. _________________________________________________________________________________________________ On June 18, 2003, representatives of fifty-five foundations and other nonprofit organizations met in New York to discuss an array of common concerns. The meeting was convened by the Edna McConnell Clark Foundation, the William and Flora Hewlett Foundation, the Open Society Institute, the Rockefeller Brothers Fund, and the Surdna Foundation. Much of the discussion focused on general operating support, overhead, and related funding issues. But the meeting also covered issues such as power relationships and trust between funders and grantees, collaboration among funders, organizations’ different needs at different stages of growth, nonprofit consolidations, foundations’ responsibilities when exiting a field, and foundations’ accountability. Although no votes were taken, there was a broad consensus about the critical importance of funders’ providing grantee organizations with general operating support and of funders’ covering a meaningful portion of grantees’ overhead expenditures. Currently, only 11 percent of the grants budgets of large foundations provide general operating support, and most foundations cap overhead payments far below the grantees’ actual indirect costs. A working group has been established to propose good practices with respect to general operating, project support, overhead, and other issues of funder-grantee relations. Participants include Michael Bailin, President, Edna McConnell Clark Foundation; Gary Bass, Executive Director, OMB Watch; Elizabeth Boris, Center Director, Center on Nonprofits and Philanthropy at the Urban Institute; Paul Brest, President, William and Flora Hewlett Foundation; Geoffrey Canada, President, Harlem Children's Zone (Rheedlan Centers); Rick Cohen, President, National Committee for Responsive Philanthropy; Stephen Heintz, President, Rockefeller Brothers Fund; Gara LaMarche, Vice President and Director of U.S. Programs, Open Society Institute; Clara Miller, President, Nonprofit Finance Fund; Miles Rapoport, President, Demos; Ed Skloot, Executive Director, Surdna Foundation; and Melinda Tuan, Managing Director, Roberts Enterprise Development Fund. The working group will begin this summer and hopes to circulate a statement for comment by foundations and nonprofits this fall or winter.