Grant Management Tools – Assessing Project Streamline

Project Streamline

It's been five years since Project Streamline launched to identify areas for improvement in grantmaking processes and develop principles and tools to support improved practices.  Taking a page from its own book, the initiative is taking stock of its own activities, successes, and areas for improvement.

Earlier this year, Project Streamline conducted a survey of grantmakers and grantseekers to learn how the streamlining principles are being translated into practice, and just released a report detailing the outcomes.

Those who are regular readers of the somewhat irregular posts on this blog will likely know that we at PhilanTech are fans of what Project Streamline is pursuing and promoting.  So we were happy to read about some of the successes of the past five years, and unfortunately not surprised to read about some areas still in need of improvement.

A few key findings:

  • While the majority of the 460 grantmakers who responded to the survey indicated that they were aware of streamlining principles and had put some into practice, the majority of the 300 grantseekers who responded had not seen noticeable improvements with their funders;
  • For each streamlining principle, there is a disconnect between the grantmaker perspective and the grantseeker perspective.  For example, over half of the grantmakers surveyed indicated that they had right-sized either their applications or reports to align the amount of required information with the size of the grant.  But 72% of of grantseekers indicated that applications for small grants were rarely right-sized.
  • Strategic philanthropy and streamlining can be at odds.  Some funders’ approach to more strategic giving has resulted in narrow funding areas and very specific outcome reporting requirements.  Those specific reporting requirements can create additional burdens for grantees.
  • There is an increasing interest in streamlining.  A majority of grantmakers reported that streamlining is more important today than it was five years ago.  And there is little question that grantseekers feel the same way.
  • The benefits of streamlining are significant to both parties – when done correctly.  Grantmakers say staff time can be spent on what matters, grantseekers spend less time on application processes, grantmakers get better data, and both sides benefit from a better relationship.

My main takeaways are threefold:

  • There has been some progress since Project Streamline launched.
  • There needs to be more.  I support Project Steamline’s efforts and look forward the progress it will continue to make as more grantmakers streamline their grantmaking – and involve their grantees in the process.
  • What we’re doing at PhilanTech is important to this effort – we provide tools that help both grantmakers and grantseekers streamline the process so that more grant dollars can be dedicated to program and service delivery, rather than to grant administration.

Request a demo to learn how PhilanTrack can help streamline your grantmaking or grantseeking

 

Image from http://www.projstreamline.org/
Author: Dahna Goldstein
May 28, 2013, 04:37 PM

Invite-Only Proposals? Why Online Grantmaking Still Makes Sense

files

If your foundation does not accept unsolicited proposals, you may think, "why should we move our grantmaking process online?" or "Won't we then get flooded with unsolicited proposals?"

The short answer is no, you won't get flooded with unsolicited proposals.  Moving online doesn't mean changing your process from invite-only to unsolicited.  It doesn't mean opening a portal for every grantseeking nonprofits to approach your foundation.  You can still invite selected organizations - and only selected organizations - to apply.

Why, then, does it make sense to move your process online?  With an invite-only process, you can still get all of the benefits of streamlining your grantmaking with an online system:

  • It will save you time, and provide easier access to information.  With an online system, grantees enter information (everything from their organization and contact information to proposals and progress reports).  That information flows directly into a format that you can view and manipulate.  There's no need to re-enter grantee or applicant information.  And all relevant grant and grantee information is in one place, so you can easily view the foundation's whole history with a given grantee organization without having to look in different files (either paper files or virtual files, depending on what your organization is currently using).
  • Trustees can access information remotely.  I talk to a lot of family foundations that have trustees in different physical locations (from different offices to entirely different parts of the country -- and sometimes different countries).  With an online system, trustees can simply log into the system from wherever they are to view current grant, grantee, and proposal information.  That means that the foundation staff person (or the trustee who usually collects information) doesn't need to spend hours - or days! - putting together packets of information prior to board meetings for trustees to review.
  • The online process enables grantmakers to do things they haven't been able to do before (or at least haven't been able to do easily).  Tools like Word, Excel and Outlook are great for writing documents, creating spreadsheets and managing email, but they weren't designed to manage grants.  With an online grants management system, foundations benefit from features designed specifically with grantmakers in mind -- everything from the ability to view all information about a particular grantee in one place (their history with the foundation, proposals and reports they've submitted, contact information, etc.) to the ability to create board packs in a few button clicks.
  • It's easier for grantees.  With an online system, grantees can access information from anywhere at any time.  With online grant proposals, they don't need to print 6 copies of the application, their audited financials, 990s, and everything else required in the proposal packet and then FedEx it to you.  They can also log into the online system and see when their next progress report is due -- and even get an automated email reminder prior to the due date.  And with PhilanTrack, grantees can manage all of their grant information for all of their funders in one centralized online location (whether or not their other funders are using PhilanTrack), saving them even more time that they can dedicate to programs and services - helping your grant dollars go even further.

Several of our grantmaker clients don't accept unsolicited requests, and have benefitted greatly from moving their processes online, and inviting online proposals from pre-selected organizations. 

Are you considering switching from an offline grants management process to an online grants management system?  Sign up for a PhilanTrack for Foundations webinar, or contact us to see a demonstration and learn about how we can help.

 

Photo credit: http://www.flickr.com/photos/manc/1427691715/
Author: Dahna Goldstein
January 24, 2013, 09:42 AM

Streamlining Grants Management - Assessing Project Streamline

Project Streamline

As regular readers of this blog know, we at PhilanTech are fans of Project Streamline, the initiative of the Grants Managers Network dedicated to streamlining the grants management process.

After five years of learning and sharing tips to simplify and streamline grantmaking, Project Streamline is taking stock of how well its messages have been received and implemented by the grantmaking and grantseeking communities.

Project Streamline is asking for input from the grantmaking and grantseeking communities in two surveys (one for each audience).  Please take a few moments to help assess how well these initiatives are taking root:

The deadline for the surveys is December 15th.  We'll share the results when they are published next year.

 

 

Author: Dahna Goldstein
December 06, 2012, 04:27 PM

Atoning for Grantmaking Transgressions

Last week, in the spirit of Yom Kippur, I wrote about atoning for grantseeking transgressions.  In that post, I promised to post this week about grantmaking transgressions, and immediately post-Yom Kippur, I’m particularly motivated to keep my promises.  So here it is: atoning for grantmaking transgressions.

As indicated in last week’s post, one of the unique elements of Yom Kippur is a type of communal atonement.  Many of the prayers recited are in first person plural, ways "we" have transgressed, rather than ways "I" have transgressed. 

I offer the following grantwriting transgressions we, a community of grantmakers, may have made in the past year.  Note: atonement is only meaningful when it is accompanied by a good faith promise to do better in the coming year, to not repeat the mistakes and transgressions of the past year.

Again, in no particular order:

  • We have been unclear. While grantees and applicants have a responsibility to ensure that their organization and programs are a good fit with the foundation’s priorities before applying, the foundation must help that process by making its priorities clear.  When a prospective grantee visits your website or reads your annual report, if you don’t have a website – and why don’t you have a website?  Even if you don’t have – or don’t want - an online application, you can still help your grantees by putting together a very simple website (it can even be one page).  But I digress.  When a prospective grantee visits your website, can they easily find clear information about:
    • Your priorities
    • What types of organizations and projects you will consider funding (organization type, size, location, issue area, types of grants/requests)
    • What types of organizations and projects you will not consider funding
    • What information should be submitted for a grant request
    • When
    • To Whom
    • In what format
    • What your deadlines are
    • When they can expect to hear something back from you – how long does it take for a request to be considered?  If a grant is awarded, how long does it take from the date the decision is made until the grant funds are in the grantee’s hands?
    • What are the reporting requirements for awarded grants
    • How the applicant can get questions answered in the application process
    • Your preferred initial form of communication (should applicants talk to a program officer?  Submit an LOI if they meet the basic eligibility requirements?  Take an online eligibility quiz?)
  • We have increased the full cost of our grants by asking for information we don’t need. Seeking grants is costly.  Nonprofits spend a tremendous amount of time (read: money that could be spent on other mission-related activities) doing it.  The Center for Effective Philanthropy has said that 13% of every foundation grant dollar is spent administering the grants.  13%.  That’s $6B across the sector. And the breakdown of that 13% is roughly 1.5% foundation expenditures, 11.5% nonprofit expenditures. Foundations can help that. 
  • Take the time at least every other year to review your LOI, proposal, and report forms and processes.  What information are you requesting from your applicants and grantees? 
    • For each piece of information, ask yourself, “How are we using this information?”  If the answer is, “We aren’t,” or “I’m not sure,” get rid of it.  It will save your applicants and grantees time.  Incidentally, it will also save you time, since you and your staff, board, and reviewers will not have to read information that is extraneous to your decision-making process. 
    • Next, for each piece of information, ask yourself
  • We have not actively encouraged our grantees to talk about failure, and we have therefore collectively not learned from it.  Not every project is going to be successful.  Even the most impactful and well-run organizations will have some initiatives that will not work.  If a grant has not gone well, will your grantees tell you about what went wrong?  Will they really?  Many (even most) nonprofits fear sharing failures with foundations.  Their concern is their perception that foundations only fund successful programs.  If you’ve funded them once, they really really really want you to fund them again.  What if their admission that something didn’t go perfectly discourages you from funding them again?  Failures in programs and initiatives (even organizations as a whole) create amazing learning opportunities, not only for the organization but for you as the funder and for the field as a whole.  Assuming that you fund several organizations that work on similar issues – and talk to other foundations that fund similar issues – you’re uniquely positioned to learn from one project’s failures and shortcomings and shorten the learning curve for others so that they don’t have to make the same mistakes.  But you need to get an honest assessment from your grantees of what worked and what didn’t.  This isn’t easy, given the concern that many nonprofits feel about sharing less-than-stellar results. Encourage your grantees to talk about failures.  Reward them for doing so by funding them again – and by helping the issue that they’re working on by sharing information productively and broadly.
  • We have been unwilling to take risks.  It makes a ton of sense of invest in things that work.  But there are a lot of new, innovative, potentially world-changing ideas and organizations out there.  And they’re having a hard time getting funding, particularly because they’re new.  They don’t have a track record, which clearly makes them a riskier investment.  But with higher risk also comes the potential for higher reward.  Some of these unproven new ideas will radically improve whatever issue they’re dedicated to tackling.  And we’ll never know their full potential unless they get some support.  I’m not advocating turning away from successful organizations and programs, but rather trying to push beyond the comfort zone of only investing in things you’ve invested in previously.  It doesn’t have to be a lot.  Maybe 5% of your grants next year could be to organizations under two years old?  Maybe even under a year old?  And maybe you could connect them with other resources (knowledge, people, potentially other funders even?) to help set them up for success?  You may “lose” that money.  But you may invest in something world-changing.

Feel free to add your own grantmaking transgressions in the comments.

Author: Dahna Goldstein
October 06, 2012, 12:19 AM

Streamlining Grant Management – CEP’s Grantmaker Assessment Tool

streamlining grant management

We at PhilanTech are fans of Project Streamline (as readers of this blog may have discerned).  Project Streamline is very much aligned what we’re committed to: helping to streamline the grants administration process.  While we’re approaching streamlining by creating online grants management tools to help both grant makers and grant seekers, Project Streamline is developing principles, spreading knowledge, and developing, with the Center for Effective Philanthropy (CEP) – a grantmaker assessment tool.

This assessment tool, a series of questions to which grantmakers can respond online, asks a series of questions that start to identify streamlining opportunities consistent with Project Streamline’s principles.  For example, grantmakers are asked if they require grant applicants to submit the same information regardless of the size of the grant.  (One of the core streamlining principles is right sizing applications to match the amount of information request from grantees – which is a rough proxy for the amount of effort required to create an application – with the size of the grant.

CEP then provides an assessment, and is also aggregating the results from the foundations that go through the process.

The early results are both discouraging and encouraging.  Amber Bradley, writing on CEP’s blog, notes that most foundations that have responded so far do not think there are opportunities to streamline their processes.  Yet, she notes, most of those same respondents also indicated that they require their grantees and applicants to submit information that is publicly available.

The opportunities to streamline are significant, and many of them don’t require major changes.

If you're a grantmaker, please consider going through the grantmaker assessment tool for your organization.

We look forward to seeing more results from CEP, Project Streamline, and the Grantmaker Assessment Tool.  And if you’d like to learn about how PhilanTech can help your organization streamline, please contact us.

Photo credit: http://www.flickr.com/photos/ncreedplayer/3970853240/ (modified)

Author: Dahna Goldstein
April 05, 2011, 11:31 AM

Moving Your Offline Grants Management Process Online

There are those who insist on dividing people into two groups: cat people and dog people; iPhone people and Droid people; Justin Bieber fans and everyone else; and, of course, people who divide the world into two groups and people who don’t.

While I’m generally in the “people who don’t” category, there tend to be two types of foundations that evaluate online grants management systems: those with completely offline grants processes (paper, fax, and sometimes email) and those with existing online processes (another commercial grants management vendor, a homegrown solution, or simple online forms for LOIs or eligibility).

I’ll address the latter category (those that already have online processes) in a future blog post.  This is about those foundations that are considering moving an offline process into an online system.

The vast majority of the 86,000 foundations in the U.S. don’t have an online grants management process (many of them don’t accept proposals at all, another topic for a future blog post).  That means that they are frequently using paper or some combination of Microsoft products (generally Word and Outlook, and sometimes Excel or a homegrown Access database) to track grantees, proposals, deadlines and to manage contact information, reporting to board members, viewing the foundation’s history with a given grantee and more.  It also means that grantees and applicants are either submitting hard copies of proposals and reports, or that the foundation accepts electronic copies of proposals and reports as email attachments.

color coded paper

Leaving aside for the moment the environmental concerns with having grantees print many copies of their grant proposals to submit via mail, this offline process is often inefficient.  I hear frequently from foundations that the major reason they want to move online is to save time for their staff members or board members who are processing grant applications.

Moving from a completely offline process to a completely online process is a big step, but it’s one that’s right for many foundations.  There are a few things that are important to remember when considering going online:

  • You’ve probably gotten used to the offline way of doing things.  That’s ok and totally understandable.  Change can be hard, and even a bit scary since it means jumping into an unknown and unfamiliar process.  The benefits far outweigh the drawbacks, but it’s important to acknowledge that it will take some getting used to and ensure that the resources are in place to help you do so;
  • The online process won’t be exactly the same.  Perhaps you have a color coding system that you’ve been using for years.  The online system may not have that, but it will have other features that will help you categorize information in ways that will support your decision making, reporting, analysis, and post-grant monitoring and evaluation;
  • The online process will enable you to do things you haven’t been able to do before.  Word and Outlook weren’t specifically designed to manage grants.  The online grants management system was, and can therefore support parts of the process by default that you may have had to creatively manipulate using Word or Outlook.  For example:
    • Automated email reminders to grantees prior to due dates;
    • The ability for grantees to update their own contact information if they move or if they have a new Executive Director;
    • A complete view of any grantee – their grant history with the foundation, the proposals they’ve submitted, upcoming due dates for reports – all within one or two button clicks;
    • Reporting features that enable you to create board packs by clicking a few buttons;
  • Some of your board members might not be ready.  If that’s the case, you can request additional training for them, or you can ease them into it by first exporting reports from the online grants management system with them, before setting them up with their own accounts;
  • It will save you time.  And you’ll probably have easier access to information.  All grant and grantee-related information will be in a centralized location that you can access securely from any computer.  And the system will help you pull together information you would otherwise have to manually collect and enter.  Grantees also enter their own information (everything from contact information to the content of their proposals), so your data entry time is minimal;
  • Your grantees will thank you.  Grantees increasingly want their funders to be online.  It’s easier for the grantees to access information (because they can access it from anywhere at any time); it’s easier for them to enter information; all the information is available to them for the lifecycle of the grant (they can log in and see what they submitted in the proposal and when the next report is due); and they get automated email reminders prior to due dates.  And with PhilanTrack, they can manage all of their grant information for all of their funders (whether or not their other funders are using PhilanTrack), which helps them save even more time that they can dedicate to programs and services – and to making your grant dollars go further.

Are you considering switching from an offline grants management process to an online grants management process?  Contact us to see a demonstration and learn more about how we can help.

 

Image: http://www.flickr.com/photos/chrismetcalf/8384724/

Author: Dahna Goldstein
March 15, 2011, 03:03 PM

Streamlining Grants Management - A Little Humor and a Lot of Truth

Vladimir Nabokov wrote, "Satire is a lesson, parody is a game."

Grant T. Goldhammer and Ophelia Pain's article entitled "A Strategic Nonprofit Reorganization Plan" is just the type of satire the sector needs to drive home some critical lessons about improving relationships between funders and grantees.

In it, the authors (one of whom, according to the Nonprofit Quarterly, on whose pages both have appeared, created the Philanthrobabble Generator) satirize several common dynamics between funders and their grantees, attempting to turn the relationship on its head, in the form of a letter - really a manifesto - from a nonprofit to its funders.  For example,

Program autonomy. We will no longer seek funding for specific projects of interest to the foundation community;​ instead, all future grants will support activities at our organization’s sole discretion. This change will allow us to develop programs that best meet the needs of the communities we serve and provide for greater public input and accountability.

and

Streamlined grant-application process. We send you an invoice, you send us the money. No staff or board review on the funder side. This streamlined approval process will reduce meetings and bureaucracy as well as free up foundation staff and funds for expanded grantmaking.

(read the whole piece here)

While, as satire, the piece clearly goes to an extreme, it makes some important points:

  • Nonprofits need general operating support.  This has been a much-discussed topic in recent months (and years!), but little has changed in terms of the numbers of grants awarded for general operating support versus program grants;
  • Funder-grantee dynamics.  Funders have money.  Grantees want money.  Funders ask grantees to do things.  Grantees want money.  Grantees therefore do things.  Those things are not always the best use of the grantees' resources.  Collaborations are great, for example, and funders are frequently in an ideal position to identify potential collaborations.  Requiring specific collaborations is another story, and not necessarily beneficial to all paries;
  • Streamlining grant applications.  While the segment quoted above clearly takes it to an extreme, streamlining the grant administration process has benefits not only for the grantee, but also for the funder.

What do you think?  What lessons can we - as a sector - learn from this satirical send-up of the funder-grantee relationship?

nabokov

Nabokov monument photo from http://commons.wikimedia.org/wiki/File:Monument_Nabokov_Montreux_23.12.2006.jpg
Author: Dahna Goldstein
January 06, 2011, 06:35 PM

When You’re Ready for Online Grants, but Your Foundation Isn’t

I talk to a lot of foundation professionals who are interested in online grants management, but not quite ready to make the leap.  Why?  Their paper forms are working for them (or are at least sort of working for them), and while the individual I’m talking to may really understand the benefit – to the foundation and its grantees – of managing grants online, The Foundation isn’t ready to change the way it’s been doing things.

("The Foundation" could be some or all of your colleagues or your organization’s board members, or an organizational culture that isn’t accustomed to change.)

Does this sound familiar?  If so, here are a few things you can do to start the conversation inside your foundation:

  • Find out which of your colleagues is similarly excited about online grant applications and who might have some hesitations;
  • Talk to the folks who have hesitations to find out what they are:
    • Are they concerned about the foundation getting flooded with unqualified applications?  (If so, your foundation can add an eligibility quiz to its online application to filter out unqualified applicants)
    • Are they afraid they won’t know how to use an online system?  (If so, there are lots of ways for them to get support and learn how to use the system)
    • Do they think that the status quo is just fine?  (If so, you might consider sharing the Project Streamline report with them, or encouraging them to talk to other foundations and perhaps some of your grantees to understand how moving grants management online helps not only the foundation but your grantees as well);
  • Talk to the folks who are in your camp, and put a plan in place to recruit the resistors.  The process here can’t be aggressive lobbying – it has to be finding out who among your compatriots has a good relationship with the resistors, and creating an environment where the resistors can feel safe to talk about what’s holding them back.

What do you think?  What are some ways you have found to move the conversation forward at your foundation?  I’ll write another post soon with your ideas and a few more of my own.

two people meeting

Photo credit: http://www.flickr.com/photos/mydigitalslrcamera/3784049371/

Author: Dahna Goldstein
November 17, 2010, 06:36 PM

Online Grant Management – Right Sizing Grant Expectations

ruler

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.



Photo credit: http://www.flickr.com/photos/iliahi/408971482/

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.

 

 

Photo credit: http://www.flickr.com/photos/lwr/2568935346/

Post updated to include photo credit.

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

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