How to Prepare Your Board for Online Grant Applications

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If you're thinking about online grant applications for your foundation, you may be wondering how to get your board, well, on board.  Here are a few tips to position yourself to lead your board and your organization into online grant applications.

  • Get buy-in.  Who in your organization will be involved in using an online grant management system?  Talk with your board chair early in the process to get her or him on board.  If your board chair is likely to resist the idea, recruit another board member who is more likely to get on board, and the two of you can work together to gradually educate your board chair about the benefits of online grant applications.
  • Communicate early and often.  As you start the process of exploring options and preparing to move your system online, get input from people who will be involved (though who are involved in the grant application and evaluation process now, and those who will use the online system) and communicate clearly throughout the organization - and even to your grantees and applicants - that you are planning to move the process online, and when you are planning to make the move.
  • Mitigate anxiety.  Particularly for an organization that has been doing things in the same way for a long time, the prospect of change can bring up a lot of emotion.  Some of it will be positive ("just think of what we can accomplish with an online grant application!" "I'm so excited about all of the time we're going to have by moving online!"), and some of it will be negative ("What if I can't learn how to use the system?"  "What if the foundation doesn't need me any more to process applications?").  Understanding that people will experience that range of emotions is the first step in trying to mitigate the anxiety that some people will feel.  Creating ways for people to feel involved in the process and feel that their voice is heard goes a long way, as does clearly communicating what support will be available along the way.
  • Training and support.  From the start of the process, it's important to communicate that support and training will be available.  That training and support should come in different formats and at different times, taking into account the fact that people learn differently and have varying levels of comfort with technology (and varying levels of comfort with their varying levels of comfort with technology).  Talk to people about what kind of support they need.  Check in throughout the process to ensure that support is being given.  And create low-key ways for those in need to request additional support.

What are your top tips for preparing your board members for online grant applications?

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Author: Dahna Goldstein
August 04, 2011, 06:06 PM

Online Grant Management – Right Sizing Grant Expectations


Earlier today, I heard a business executive talking about "right sizing" his company, euphemistically discussing layoffs, reductions in staff size.

Right sizing isn't necessarily about reductions - it's about making adjustments.

Right sizing grant expectations is one of the recommendations in the Project Streamline report, "Drowning in Paperwork."  It's easy to say to take that recommendation to mean that foundations should reduce their requirements, that they should make their applications shorter, their reporting less frequent and lengthy.

But that's not my interpretation (nor, I think, is it what the Project Streamline folks mean).  Foundations have an obligation to be good stewards of their endowments and the 5% that they grant.  They have an obligation to ensure that the organizations their grants fund are valid organizations that are aligned with donor intent.  Depending on the foundation and its mandate, it may have additional or more specific obligations.  And some degree of information must be collected from the grantee to facilitate meeting those obligations.

Here’s a guideline: before you include a requirement in a grant proposal or progress report, ask yourself four questions:

  • Do I need this information to make a good decision?
  • How will I use this information?
  • Can I get this information easily without asking the applicant/grantee to supply it for me?
  • How difficult/time consuming will it be for the application/grantee to prepare this information?  Does that seem like a reasonable use of their time, given the size of the grant (or the potential grant)?

(Ok, so that last one was two questions, but you get the idea.)

I wrote an earlier post about increasing use of LOIs, and I think it’s applicable here.  Short form applications (whether LOIs or a short proposal) are a great way to collect information from grantees without creating negative net grants.

In fact, PhilanTech research, conducted with the Urban Institute, suggests five essential categories of questions for reports, represented by the following questions:
  • What did you say you were going to do with our grant?
  • What did you actually do?
  • How did you spend our grant money?
  • What were your challenges?
  • What did you learn?
A short-form proposal wouldn’t look all that different:
  • What are you going to do with our grant?
  • What makes you the right organization to do it?
  • How will you know when you’ve done it?
  • How will you spend our grant money?
  • How will you share your results/experience/learning?
Every foundation will have its own variation on the questions above, and will likely require additional information, and that’s ok.  But please think of your grantees, your information needs, and answer the four (ok, five) questions above when putting together your requirements.

And grantees – you have a responsibility here too: know what is involved in managing a grant from your end.  How long does it take you to put together an application?  To monitor/report on your grant?  How likely are you to receive a particular grant?  In what amount?  Look at the total cost of managing a potential grant -- hours of staff time X hourly rate (based on that person’s salary) + opportunity cost of not being able to pursue a different grant or other activity with that time – and decide whether that grant is worth it to your organization.

Together, we can all work to continue to streamline grants management and get grant dollars to organizations that will use them well.

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Author: Dahna Goldstein
October 28, 2010, 06:59 PM

Grant Management in Nonprofits - The Cost of Managing Grants

I've written before about Project Streamline, the initiative now housed at the Grants Managers Network that is working to improve grant application and reporting practices.  I'm a fan of the initiative -- not only because it supports what we're doing here at PhilanTech, but because I believe in the potential it has to improve grant-related information, practices, impacts, and social outcomes for the whole nonprofit sector.

dollar sign in circleGrant writing, as anyone who has written any grant applications on behalf of a nonprofit knows, is a time consuming affair.  Grantmakers generally request a lot of information in fairly particular ways -- they are giving away money and have a responsibility to ensure that they are giving it to the organizations that will best meet their missions and their donor's intent, not to mention to organizations that will use the funds well.  But there is a significant cost to the information collection practices -- both at the front end of the process (the proposal) and the tail end (the final report), and sometimes in between (the interim report(s)).

A Center for Effective Philanthropy report determined that 13% of every grant dollar is spent on grants administration.  From Indicators of Effectiveness:

Over the 2.1 year duration of the average grant, a grantee spends roughly 100 hours preparing the proposal and engaging in evaluations and other formal monitoring.  The average time required of grantees by the 23 foundations [in the survey] ranged from a high of 227 to a low of 26 hours per grant.

The median grant size for the grants awarded by the foundations in the study was $129,000.  $129,000 is a significant grant, so spending time putting together a good proposal and monitoring the funded initiative is not an unrealistic expectation. 

But what about a $10,000 grant?  If a $10,000 grant requires a similar amount of time to prepare and write the proposal, then monitor, write, and submit reports, how valuable is that grant to the nonprofit?

Assuming an average nonprofit staff member hourly rate of about $25 (based on a $50,000 salary, working 2,000 hours/year), that $10,000 grant nets $7,500 to the nonprofit.  One quarter of the grant is spent administering the information that the funder requires about the grant.  And if the staff salaries are above average (or if the executive director spends some time on the proposal, etc), the return on investment for the nonprofit diminishes that much further.

I'd argue that the return on investment for the funder is much lower too.

Nick Geisinger at the Washington Regional Association of Grantmakers has taken this calculation one step further, looking at the cost to the sector of the grants administration process, with a figure he calls the net grant to the sector.  The math goes like this (from Nick's post, "Paperwork vs. progress: the case for streamlining"):

To determine your net grant to the sector as a whole, you would include costs incurred by the applicants that don’t receive grants.

Here’s an illustration of this issue, modified from a previous column:

  • A small nonprofit spends about $400 per working day on salary and benefits for its development person.
  • If this person spends a total of one day applying for your $10,000 grant, half a day managing it, and one day on the report, your net grant was $9000.
  • If 10 other nonprofits sought the grant unsuccessfully, your net grant to the sector was $5000.
  • If 25 applied, you de-capitalized the sector. Yikes! (Note that this example does not take into account CEO and CFO time spent managing relationships, etc.)

Applying that logic to all grantmaking in the nonprofit sector, the costs are staggering.

I'm in the midst of compiling some data from a survey PhilanTech conducted with GrantStation entitled "The State of Grantseeking 2010," and a future post will apply the costs of managing grants to that survey data.

In the meantime, please check out Project Streamline for information about how to streamline your grants administration.



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Post updated to include photo credit.

Author: Dahna Goldstein
September 08, 2010, 11:28 AM

Managing Grant Applications - Hope and the Magic Lottery

I just read Seth Godin's blog post entitled "Hope and the Magic Lottery."  In it, he advises entrepreneurs not to put any eggs in the basket of "hope and the magic lottery ticket."  In other words, he writes, don't expect that your elevator pitch is going to land a $2 million venture capital investment.  Instead, focus on growing revenue and delighting the people who are already your audience.

The same advice applies to nonprofits seeking grant funding.  While it's possible that your organization will get a multi-million dollar grant from Gates or Ford, for most nonprofits, that's a magic lottery ticket.  Focus instead on:

  • Delivering great services and telling good stories about your work to your current donors (and use your service recipients, when you can, to help tell those stories);
  • Build on existing relationships with the funders you already have;
  • Do your grant research and find those foundations and other funders that are specifically interested in finding our what your organization does and what makes it gre at.  Foundation staff generally don't like to receive proposals that don't meet the foundation's guidelines, and your odds of getting that kind of prop osal funded are slim to none.

Hope is important, but hard work, good research, and knowing your audience (the foundation staff and trustees who will be reading your proposal) will win the day.

lottery ticket

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Author: Dahna Goldstein
June 17, 2010, 02:51 PM

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