While many grantmakers have moved their application processes online, a large number of grantmakers still require their applicants to submit grant proposals and progress reports on paper or via email.
Some foundations have been using paper applications for a long time and feel there is no reason to change, but there is a significant cost to inefficient grants management – to both the foundation and its grantees, and ultimately to the social impact that both are trying to achieve.
The Center for Effective Philanthropy determined that 13% of every foundation grant dollar is spent administering the grant. Across the nonprofit sector in the US, nearly $6 billion per year is spent on grants administration. That’s a lot of lost impact! For a foundation that awards $1,000,000 in grants annually, $130,000 is spent administering the grants. The grantees bear most of that cost, but both the grantmaker and the grant recipient benefit from streamlining the process.
Here are seven reasons that friends should not let friends require paper grant applications:
- Data entry (and re-entry) is time consuming and error-prone. Once a paper is application is received, it needs to be logged and tracked. With paper (or email) applications, someone at the foundation has to enter information into a grants database, Excel sheet, or other tracking system. That data entry process is both time consuming and error-prone. With an integrated online application and grants management system, there is no data entry that has to be done by someone at the foundation. Information from the application automatically populates the grants database, saving both time and the possibility for errors.
- Information submitted on paper can’t be easily aggregated or analyzed. Increasingly, grantmakers want to be able to look at information across a group of grants to see how much money was awarded over a period of time, analyze information about the recipient organizations, or see the impact the grants had on the issues that the foundation is trying to address. With paper applications, grant information such as people served, intended outcomes, etc., can’t be easily accessed and aggregated – at least not without someone at the foundation copying and pasting – or re-typing – that information. With an integrated online system, reports on the distribution of grant funds as well as outcome and demographic information – or anything else that the foundation wants to track – can be generated at a few button clicks, using information that the grantee or applicant submitted in the grant proposal or progress report. In fact, PhilanTrack is specifically designed to aggregate grantee-entered information to help grantmakers evaluate the effectiveness and impact of their grants and programs. And PhilanTech’s staff will be happy to advise your organization on how to take advantage of the system and its capabilities to support your grantmaking goals.
- Real-time access to information. Trustees, reviewers and other stakeholders are increasingly not in the same geographical location as the foundation’s physical office. With paper applications, someone (either the applicant or a foundation staff member or volunteer trustee) has to print many copies of each application and send them across the country or the globe prior to a board meeting. Many foundation professionals have lost count of the number of hours they spend each year pulling together board packets with collated copies for each trustee of each proposal under consideration. Moving online can also be a great way for family foundations to engage younger family members who may just be getting involved in the foundation.
- Trees. Think of the trees! Printing multiple paper copies of every application and every report costs countless trees per year. Moving the process online enables all foundations – but particularly foundations that fund environmental causes – to align their internal grantmaking processes with their missions.
- Reducing ineligible or unqualified applications. As clear as grantmakers make submission guidelines, hopeful nonprofits frequently submit funding requests even if they’re ineligible. Two features of online application systems help foundations save time and resources by discouraging that activity: eligibility quizzes and letters of intent. Eligibility quizzes can be tailored to the foundation’s specific guidelines and pose a series of questions to applicants. Applicants must affirmatively answer that they meet each component of the foundation’s funding guidelines. If an applicant does not meet one of the eligibility criteria, the organization is prevented from submitting an application, thereby significantly reducing the number of ineligible or unqualified applicants. Letters of inquiry, as we’ve written about before, can effectively help reduce the administrative burden on both the grantmaker and the applicant with a short version of the application to determine whether it’s worth the time required from both parties for the nonprofit to submit a full application.
- Contact management and centralization of information. Managing grants requires managing a lot of information about the organization – from simple data like the organization’s address to more complex information like the intended outcomes of a funded project, and everything in between. Managing contact information for grantees is important, and tracking interactions is as well. With an online grants management system that also manages applications and progress reports, all grantee- and grant-related information is in one centralized location. You can look up a grant, see what the organization outlined in the proposal, who the grant contact is and send that person an email or see when the next report is due – all with just a few a button clicks, rather than having to track down the paper copy of the proposal, then look up the relevant grant in the grants database, and the contact information in Outlook.
- Continuity and institutional memory. Over time, most organizations develop their own systems and processes for filing – and finding – documents. But what happens if there is staff turnover? With an online grants management system, the organization’s complete grantmaking history is stored in an organized, easy-to-access and easy-to-use online location. If a new family member joins the board, or if the program officer or grant manager leaves, her successor can easily pick up the mantle and see the organization’s whole history, which reports are due when, and what information was submitted in each proposal. And all of that information is available at a couple of button clicks rather than by pouring through tons of documents in filing cabinets.
Moving to online grant applications doesn’t mean automatically accepting unsolicited proposals. If your foundation has an invite-only grantmaking process, you can still gain all of the benefits of moving your application online while only inviting the organizations that you wish to have apply. Read more here about why it makes sense to move your application online even if your organization doesn’t accept unsolicited proposals.
PhilanTrack is specifically designed to manage the full lifecycle of grants. In addition to streamlining the process for grantmakers, PhilanTrack helps your grantees and applicants manage their grantseeking more efficiently so that your grant dollars go further towards supporting the programs and services they are intended to fund.
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