Ten Ways to Streamline

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Over time, foundations have evolved specialized applications and reports to gather information and invest wisely. Unfortunately, the unintended effect has been to impose significant administrative burdens on nonprofits. Project Streamline, a national effort by foundations and grantseekers, has documented the paperwork burden and made recommendations for streamlining.

To understand the need for streamlining, consider this: A nonprofit often receives grants from 20 or 30 foundations; some are funded by many more. The nonprofit spends significant resources in two major ways:

  • It applies for funding from 40, 50, or 60 different foundations, and each foundation has its own application form, required documentation, and budget format.
  • It prepares grant reports for 20 or 30 foundations, and each report includes different questions and requests different documentation and uses varying grant timelines that call for customized financial reports.

If 1 hour of nonprofit labor is worth about $100, the hours spent by the nonprofit to apply for and report on grants each year add up to thousands and thousands of dollars. These demands reduce net grant size—or the grant amount minus dollars spent applying for and reporting on the grant.

As you talk with colleagues at your foundation about streamlining, consider how your total grant output each year is reduced by the administrative costs your foundation imposes on its grantees.

Before you streamline

Consider the following:

  • Make sure that everyone at your foundation—board, staff, family members, and your attorney and accountant—understands that the law requires little for grants to most domestic public charities. For most charities, there is no required paperwork, process, or post-grant reporting.
  • Identify the information that is essential for your foundation to make a grant decision and learn from grants, and request only that information. Also, consider how you will use the information. In its research, Project Streamline found that many foundations do not use much of the information they request.
  • Consider gathering your grantees’ recommendations for streamlining using an anonymous survey. This is a great way to develop relationships and demonstrate that your foundation wishes to be sensitive to their time.

Ways to streamline

Begin by trying one or two of the following Project Streamline recommendations.

  1. Right-size your applications and reports for small grants—Project Streamline found that many foundations ask all grantseekers and grantees to fulfill the same requirements, regardless of grant size and whether the foundation already knows the organization. Instead, you might develop a shorter application for small grant programs, which typically are under $10,000. Some Exponent Philanthropy members use a one-page application for small grants, and either waive reports for small grants or ask for just a couple of paragraphs.
  2. Right-size your requirements for repeat grantees and organizations you know well—File their materials and information for easy reference, and ask for updates only. Streamline your application process, reporting, and evaluation for these organizations. Consider combining the process of grant reporting and grant renewal into one step. Another approach is to take time for conversations—via check-in calls, coffees, or visits—with the organizations you support regularly. Exponent Philanthropy members who invite these conversations report that they don’t need as much paper; rather, they learn in person about the grant’s impact.
  3. Waive some requirements for small, new, and grassroots organizations—Funders who understand the limited capacity of these groups realize they don’t have the staff and systems to develop detailed applications, reports, and financials.
  4. Create a simple prescreening process—Expecting full applications and documentation for every grant application wastes a lot of time for nonprofits. To reduce the number of full applications that have little chance of funding, create a letter of inquiry process, often a one- or two-page paper form, or an online pre-application on your website. You then can invite full proposals for those grantseekers that truly fit your guidelines. Another method is to invite applicants to have a brief phone conversation with you before applying.
  5. Make your application easier—Reduce the number of questions, offer electronic versions for easy preparation, and allow grantseekers to submit applications electronically. Also, allow applicants to link to online information about their organizations, such as mission statements, staff and board lists, annual reports, program information, and media articles. This step saves applicants the labor in mailing or sending those documents, and makes it more likely you will access more current information.
  6. Allow grantseekers to submit financials in original, off-the-shelf formats, rather than requiring reformatting—Slicing and dicing financial information for different funders is, according to Project Streamline’s research, one of the most cost-intensive parts of grantseeking. Asking for customized formats and budget categories is not only laborious for the applicant but also increases the chances for errors and confusion. You also can pull financial information yourself, instead of asking for it, by looking up Form 990s at GuideStar.
  7. Eliminate quarterly and twice-yearly grant reporting, except for high-risk grantees—Many funders find that an annual or end-grant report meets their needs.
  8. Align grant schedules with the grantee’s timing, not yours—Funders often support nonprofit efforts that already are in process. Other times, nonprofit projects are delayed unnecessarily by the grantmaker’s timeline. Consider funding projects that will begin before grant approval, if you clarify that the grant is not a commitment until formally approved. Your sensitivity in this area can significantly reduce the gymnastics nonprofits perform to meet the demands of multiple funders.
  9. Make your streamlined requirements clear—Take the guesswork out of your process for grantseekers and grantees by being clear—in writing—what you require and when. Also, set clear limits on the number of words or pages you expect for answers to application and report questions. If you feel that more pages of grant narrative and explanation are not necessarily better, make that clear.
  10. Offer general operating support grants and simplify applications and reports for those grants—General operating grants provide nonprofits the freedom to allocate funding as the organization sees the need. Such grants are difficult to raise; by providing this support, you save grantees significant time by helping solve their toughest fundraising challenge.

Over time, adjust your mix of techniques, as appropriate, and try some additional ones that make sense for your goals. Also try to measure the impact in time and labor saved for grantseekers and grantees, and for your foundation.

As you streamline, you will become part of a growing movement of funders. Be sure to share your experiences and ideas with Exponent Philanthropy along the way.

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