Having specialized grant applications and reports imposes a big administrative burden on nonprofits. Consider, a nonprofit receives grants from 20 or 30 foundations (and some are funded by many more). The nonprofit spends its resources in two major ways:
- It applies for funding from 40, 50 or 60 different foundations. Each foundation has its own application form, required documentation and budget format.
- 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.
The hours a nonprofit spends applying for and reporting on grants can add up to thousands of dollars each year. This lessens your net grant—the total amount of your grant, minus the cost of time and labor the nonprofit spends to apply.
Principles for Peak Grantmaking helps funders reduce the burden of their requirements so grantseekers can dedicate more time to mission-based work. Here are some of their recommendations for simplifying and streamlining:
Before you begin
The law requires doing very little for grants to most domestic public charities. I.e., grants to most charities require no paperwork, process or post-grant reporting. Make sure everyone at your foundation knows this.
A lot of foundations don’t use most of the information they request. Figure out what is vital for yours to make a grant decision. Request only that information.
Consider using an anonymous survey to see what your grantees’ recommend. This is a great way to demonstrate that your foundation wants to be sensitive of their time.
Ways to simplify and streamline paperwork
- Right-size applications and reports for small grants. Create a shorter application for small grants (typically under $10k). 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 that fit your guidelines.
- Make your application easier. Reduce the number of questions, and allow applying electronically. Let applicants link to their mission statements, reports, programs, etc.
- Let grantseekers submit financials in an original format. Reformatting financials for different funders is costly, strenuous, and it increases the likelihood of mistakes. Pull their 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 gen op 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.
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Exponent Philanthropy is the country’s largest association of funders and the only one dedicated to serving foundations with few or no staff, philanthropic families, and individual donors. Join our community >>