Having specialized grant applications and reports imposes a big administrative burden on nonprofits. Consider a nonprofit that receives grants from 20 or 30 foundations (and some are funded by many more). The nonprofit spends its resources in two major ways: (1) It applies for funding from 40, 50 or 60 different foundations. Each foundation has its own application form, required documentation and budget format. (2) It prepares grant reports for 20 or 30 foundations. Each report asks different questions, requests different documentation, and uses varying grant timelines that call for customized financial reports.
What the Law Requires
The law requires doing very little when making grants to most domestic public charities. In fact, most require no paperwork, process, nor post-grant reporting. A lot of foundations don’t use the information they request. So, you should figure out what is vital for your foundation to make a grant decision, and request only that information.
Consider using an anonymous survey—like our Grantee and Applicant Perception Survey—to see what your grantees recommend. This is a great way to demonstrate that your foundation wants to be sensitive of their time.
How To Simplify and Streamline Your Grant Applications and Reports
A nonprofit’s hours applying for and reporting on grants can add up to thousands of dollars annually. This lessens the net grant, or the total amount of the grant, minus the cost of the time and labor a nonprofit spends to apply. Here are Project Streamline recommendations for simplifying and streamlining grant applications and reports:
Right-Size Applications and Reports for Small Grants
Create a shorter application for small grants (typically under $10,000). Some funders use a one-page application and waive reporting or require just a few short paragraphs.
Right-Size Requirements for Repeat Grantees and Organizations You Know Well
File their materials for easy reference and ask for updates only. Consider combining their reporting and renewal into one step or have regular conversations to learn about the grant’s impact.
Waive Some Requirements for Small, New, and Grassroots Organizations
These groups have neither the staff nor systems to prepare detailed applications, reports, and financials.
Create a Simple Prescreening Process
Set up a letter of inquiry process (via your website, a short paper form, or phone call) to keep grantseekers from wasting time. Only invite full proposals from those grantseekers that fit your guidelines.
Make Your Application Easier
Reduce the number of questions and allow grantseekers to apply electronically. Let applicants link to their mission statements, reports, programs, and so on.
Accept Financials in an Original Format
Reformatting financials for different funders is expensive and strenuous, increasing the likelihood of mistakes. Pull the grantseeker’s Form 990 yourself through GuideStar.
Eliminate Quarterly and Twice-Yearly Grant Reporting
Except for high-risk grantees, an annual or end-grant report should meet your needs.
Align Grant Schedules with the Grantee’s Timing—Not Yours
If a project begins before grant approval, clarify that the grant is not a commitment until formally approved.
Make Your Streamlined Requirements Clear
Detail what you require and when. Set clear limits for word or page count.
Give General Operating Grants with Simplified Applications and Reports
General operating support is hard to get. By offering it, you’ll help grantees solve their toughest fundraising challenge.