The Center for Effective Philanthropy finds that grant reports don’t help. Is it time to put grantees first in order to put the mission first?
In the middle of a virus-ridden, lockdown-addled 2020, foundations and philanthropists found new ways to release funds and support their grantees. This “pro-grantee revolution” offered donors a chance to consider obstacles to giving that were not in the best interest of either grantor or grantee.
As we looked forward to the end of the pandemic (perhaps a bit too soon), we suggested that givers should learn from the adaptations they made to streamline giving, in hopes that this “revolutionary” approach might become the norm. Would donors learn from their own changes that onerous reporting requirements and extensive application procedures were not only a waste of resources but also an obstacle to effective grantmaking?
And earlier this week, we covered American Philanthropic’s “Little Book on Giving Well,” a short manual helping donors think through how to structure their giving in order to advance their goals and best support their grantees’ missions.
THE PHILANTHROPIC REVOLUTION
But why is this advice and this revolution needed in the first place?
As Jeremy Beer details in Philanthropic Revolution, the twentieth century watched a steady shift from “charity” to “philanthropy,” the latter describing a modern, “scientific” approach to charity. No more should giving merely seek to succor suffering; smart giving attacks “root causes” and “solves” social ills.
In order, then, to ensure that philanthropy is “smart,” philanthropists burden their grantees with extensive applications and burdensome reporting. How can they ensure that their gifts are effective without reports and data?
These changes, of course, raise this important question: does reporting help? Did the pro-grantee revolution of 2020 lead to waste and floundering missions? It does not appear so. And even the Center for Effective Philanthropy is seeing this.
In their latest Grantee Perception Report, the Center for Effective Philanthropy found that reporting is not valued by grantees and often makes them feel disrespected by their donors. Across the survey, CEP reports, reporting receives extremely low ratings in terms of its actual value to them. And reports are rarely used by donors, too, it turns out.
Discussing the results of the report, Kevin Bolduc, CEP’s vice president of assessment and advisory services, doesn’t mince words. “Why do we bother?” he asks in his title. The reports are valuable neither to grantor or grantee, and they suck up enormous amounts of time—time better spent on raising more money and advancing the mission.
Bolduc’s main solution is squarely in line with the pro-grantee revolution, and he too sees the opportunity we have right now. “These are solvable problems,” he writes, “and I think that this particular moment is ripe for real change: funders should dramatically reduce requirements and commit to making whatever remains more helpful for everyone.” And why is the moment ripe? Precisely because we are on the heels of the pandemic and lockdown disruptions. CEP found that 70% of nonprofits said that some of their donors relaxed or canceled reporting requirements.
In the wake of these changes, now is the time for donors to look forward and set policies and expectations that put the grantee first. Why? Because putting the grantee first puts the mission first. While grantor and grantee may be on opposite sides of the ledger, what they have in common is their interest in advancing some shared mission. Both parties—and whomever the nonprofit serves—are better served when they see each other as partners in advancing a mission.
We can easily get rid of reports because, at the end of the day, there is no replacing real relationships.
The answer to lesser reporting expectations isn’t blind or haphazard grantmaking; it’s trusting relationships. Bolduc’s advice is apt: “drastically minimize,” yes, but also, “treat reporting as an opportunity for engagement.”
Donors (or foundation staff) should invest in getting to know their grantees. Donors are well within their rights to expect clear plans for how their funds will be used and honest explanations of what their gift achieved (or didn’t achieve). But everyone is better served when that explanation happens, not through forms and reports that are onerous and overlooked, but through personal engagement between trusting (and trustworthy) partners.
As we move forward and seek to improve giving, donors—especially foundations—should “take more of the burden” on themselves to understand what their giving can and, ultimately, did achieve. As it turns out, trust and personal relationships—not reports—are the key to “effective” giving.