So much grantmaking is hindered by unnecessary bureaucracy. Here are four ways for foundations to cut out the fat and make their grantmaking efficient—and grantee-friendly.
Yesterday I encouraged foundations to embrace the pro-grantee revolution. Once this pandemic has passed, foundations should maintain the grantee-friendly practices that they may have begun to help grantees during the pandemic.
In addition to considering how much foundation requirements cost nonprofits in general, I want to offer four more suggestions for foundations to foster smarter, more efficient grantmaking.
ABANDON COMPLEX INQUIRY AND APPLICATION FORMATS
Foundations should reconsider rigid grant application or initial inquiry formats that ask every nonprofit to answer the same 27 questions, or to complete a 7-minute video—or even the common and well-meaning restriction to send a letter that is no more than one or two pages.
Your goal, as a foundation representative, is a quick initial look at whether a nonprofit might qualify for a grant. Would it take much more time to tell nonprofits that they could submit whatever they want? And might that be better for their missional priorities? Perhaps their website URL is enough to give you the quick insight you need. Or maybe their annual report from the previous year, or an executive summary from another grant they received this year. How about a 10-slide PowerPoint deck they use with major individual donors, or a piece of collateral that summarizes their work? Or, of course, the trusty two-page letter they have on hand already.
Let the nonprofit decide what format paints their mission in the best light, with as few restrictions as possible. Why? For two reasons: first, you want to waste as little of the nonprofits’ time as possible. If they’re doing good work (whether you decide to fund it or not), you don’t want them spending time painstakingly preparing an LOI, but on doing that work. Second, you want a good, honest look at the nonprofit, and you want it to be easy for you, too. What’s the best way to achieve that? Not a one-size-fits-all requirement, but whatever suits that organization.
If you’re worried about going too easy on them, don’t be. First of all, since when was the goal to be tough on grantees? You want to facilitate, not obstruct, their work. But more than that, the freedom does bear a burden. Not all nonprofits have good websites or good collateral or good slide decks—it’s not as if this flexibility will conduce to putting development officers out of work. Really it will just make your job and theirs more effective and efficient.
THE INTERVIEW MODEL VS. THE MORTGAGE MODEL
What’s the most painful, insanely bureaucratic process that most adults go through? Post-2008, I’d say that for many it is getting a mortgage. You’ve got real estate agents, bankers, and lawyers all typically involved in the process—on both sides of the transaction. You give six forms of ID and fourteen bank statements and paystubs dating back to 2015 for everyone involved. The bank calls your 6th grade math teacher to check up your creditworthiness. You hire a home inspector to make sure you aren’t getting ripped off. And then at the last minute, maybe the appraisal comes in low or the homeowners won’t budge and the whole thing comes crashing down anyway.
Compare that to a another formal and purposeful process that establishes a great deal of information but without being overly burdensome: a professional job interview. You might submit a resume and perhaps a short cover letter, but from there it is a conversation meant to establish one’s fitness for the position and that the organization and position are something you actually want. If you are doing hiring right, you know that it’s a two-way street: if you force candidates into a 200-question personality test before applying or drag your feet without consideration for the candidate’s timeline, you know that you will lose the best candidates to other groups.
As a funder, ask yourself which of these processes you are forcing your grantees to go through. If aspects of your process are a little bit like getting a mortgage, consider whether they are worth it. Again, you don’t want to create unnecessary work for your grantees or for yourself. So many foundations are making work which makes more work. Why? Is it actually advancing your mission?
TRUST IN LEADERSHIP, NOT STRICT BUDGET REQUIREMENTS
Strict requirements for funding only particular projects can make a foundation feel like it is doing funding wisely. It can tell itself that it is not overpaying for administrative costs. It can tell itself that it is achieving some very particular (and usually narrow) ends. And it can tell itself that it is forcing nonprofits to really do their homework on an issue or cause.
But all grantmaking is ultimately an exercise in trust with the leadership of the nonprofit. Here is the real question: Based on your relationship with the nonprofit, would you trust the executive leadership to understand their own mission and to steward funds in an acceptable matter? If not, you probably shouldn’t be making that grant, even if the numbers line up and the logic model presented to you looks airtight.
See the real catch here? The requirements and hoops and paperwork actually present a pathway for untrustworthy people to appear trustworthy. You’re trying to protect the integrity of your grantmaking, but you’re relying on manipulatable systems, instead of your own relationship with the leadership (or the relationships of people you trust).
What if you do trust them, and you value their “on the ground” knowledge of the cause? Why impose artificial restrictions that may not be what they actually need to accomplish the mission you want to see succeed? Why would you introduce these extraneous and limiting factors? Why not let them guide the process?
STRIVE FOR MEANINGFUL PROCESS REVIEW
Some foundations have quite admirably begun to ask grantees for feedback about their experience as a grantee. They have an earnest desire to know what is most challenging about working with them, or what sort of help grantees might want that they aren’t getting.
But nonprofits have such a dependency on their supporters that they are highly unlikely to tell the full truth. Getting at the truth requires real anonymity and an objective third party evaluator. If you are serious about making grantees a real part of your strategic process, you must find a way to get at the truth.
THE PRO-GRANTEE REVOLUTION
Foundations exist to give money away in support of a mission. Some exist to do that in perpetuity, and some to do that for a set period of time. Whatever the case may be, you operate well as a foundation, when your funds effectively support the mission you exist to advance.
For too long, foundations and fundraisers have been too frequently at loggerheads. There is no denying that fundraisers have been often to blame, but much of the issue lies with onerous and unnecessary stipulations set up on the foundation side.
Whether the pandemic has led you to do away with some of those stipulations or not, I hope you’ll take the time to consider some of the ways you can make your grantmaking more effective by removing the bureaucracy and ill-advised requirements for fundraisers. Doing so will make both of your jobs easier and both of your organizations more effective.
As we all seek to navigate the COVID-19 pandemic and its impact on the nonprofit sector, please feel free to reach out to me to schedule a call to discuss your fundraising or your grantmaking, and how you might pivot to respond to your current needs. You can send me an email to email@example.com.