Simplifying Grant Applications and Reporting for Nonprofits - Exponent Philanthropy
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Simplifying Grant Applications and Reporting for Nonprofits

Photo by Yan Krukau

When foundations require detailed and specialized grant applications and reporting, it creates a lot of extra work for nonprofits. If a nonprofit secures funding from 20 to 30 foundations, it must manage applications to 40, 50, or 60 different foundations, each with unique requirements. Additionally, it must prepare grant reports for 20 to 30 foundations, each with different questions, templates, and timelines. In this blog, you’ll learn how to make your foundation’s grant applications and reporting easier, saving time and labor for your grantees and applicants. 

Develop Clear Grant Guidelines

It’s not always easy for grantseekers to understand how foundations work or how to access them. Grant guidelines are a great way to communicate your interests and strategies to potential grantees, making it clear what you fund and how to apply.

The clearer your guidelines, the more likely you are to receive grant applications that align with your interests. This will save you time in screening and responding to unsuitable proposals and provide a consistent framework for evaluating the ones that do fit. Similarly, applicants will avoid wasting time on foundations that are not a good match. You can also create a simple prescreening process through your website, a short form, or phone call, and only invite full proposals from those that fit your guidelines.

Learn What to Include in Your Grant Guidelines Here »

Move Applications Online

Most applicants prefer online applications that let them link to their mission statements, reports, and programs, avoiding the need for bulky paper packets. Well-designed online systems can electronically capture all application information, including budgets, IRS determination letters, and post-grant reports. These systems serve as repositories where applicants can access their entire history of interactions with your foundation.

Our members have found that using online systems increases interactions with applicants during the application process, enabling easy draft submissions and allowing foundations to request additional or clarifying information as needed.

Request Only the Information You’ll Use

A lot of foundations don’t use the information they request, and making grants to most domestic public charities requires no paperwork, process, nor post-grant reporting. Figure out what your foundation needs to make a grant decision, and request only that information.

“It is important for a foundation to fully consider the impact of its requests on a grantee,” said Exponent Philanthropy member Dee Ann Harris of the Leightman Maxey Foundation in Oregon. “Requesting materials that will not be reviewed and/or used by the foundation imposes an unnecessary burden and can prevent a good relationship and true partnership.”

To streamline your financial due diligence, consider the following questions:

  • What financial information do I need to assess the proposal, the organization’s capacity, and the extent to which the grantee spent the grant funds as proposed?
  • What existing financial documents will give me this information?
  • What additional documents do I need, and how can I best obtain them?

Streamline Small and Repeat Grants

Develop streamlined application and report forms for small grants (typically under $10,000) to ensure the grant is worthwhile. Some funders use a one-page application and either waive reporting requirements or ask for just a few brief paragraphs. Others prefer to meet grantees for informal discussions over coffee or lunch to learn about their projects or organizations.

Relax some requirements for small, new, and grassroots nonprofits, as they often lack the staff and systems needed for detailed applications, reports, and financial documentation.

For renewal grants, incorporate reporting on the previous grant into the application process for new funding. Store information about repeat grantees and familiar organizations in a spreadsheet, database, or grants management system, and only request updates from them. 

Accept Financials in Their Original Format

Let grantseekers submit financial information in their original, off-the-shelf formats rather than requiring reformatting. Why use nonprofits’ existing financial information?

  • Reduce the burden—According to nonprofits, slicing and dicing their financial information to satisfy funders’ requirements is one of the most time- and cost-intensive parts of grantseeking. By accepting grantseekers’ existing budgets, funders help to keep the net grant high.
  • Yield valuable information on capacity—Some nonprofits struggle with budgets and financial statements. Receiving these documents in the grantseeker’s format can let the funder assess the grantseeker’s financial sophistication and organizational capacity.
  • Improve accuracy—Accepting existing materials eliminates the chance that nonprofits will make errors when transcribing budget or financial numbers into a new format. These materials are also more authentic to the grantseeker and more representative of the organization or project.

When circumstances do call for templates, or standard forms requesting categories of information, specify only a limited number of line items to give grantees the flexibility to accurately represent their budgets or financial information.

Annual Reports as the Default

Except for high-risk grantees, an annual or end-grant report should meet your needs. Funders that require semiannual or even quarterly reporting are some of the most challenging partners for nonprofits. It’s no wonder. Such frequent requirements can undermine a nonprofit’s effectiveness, diverting time to reporting that could instead go towards their core work. Even worse, many reports add little value to either party and leave some grantees wondering if they’re even read.

When you do need more frequent reports, they should be brief, rely on readily available material whenever possible, and come with explicit justification by the funder: for example, concerns about the organization, a complex project, or a particularly large grant.

Align Grant Schedules With the Grantee’s Timing

Timing can be everything when it comes to grant budgets and financial reports. But whose timing? Grant start dates tend to align with the funders’ administrative procedures and are unrelated to the organization or activity they’re funding.

Nearly all nonprofits produce financial reports at the end of their fiscal years. When grant reporting periods don’t align with these natural reporting cycles, consider shifting your reporting requirements so they do. When in doubt, talk with nonprofit staff about what works best from their perspective and try to reflect the reality of the grantee’s situation where possible. For example, to prevent unnecessary delays due to funders’ grant cycles, predated projects may be appropriate if:

  • The funder clarifies that the grant is not a commitment until formally approved.
  • The grant recommendation states that, if approved, the grant will go in part to pay for activity that already has taken place.
  • The grantee understands that funds spent in advance of approval are the grantee’s responsibility until the funder approves the grant.

To be prudent, Project Streamline recommends start dates that predate approval by no more than 6 months—and never earlier than the beginning of the nonprofit’s current fiscal year.

Get Feedback

Be sure to take stock! After a year, ask if right-sizing has benefited grantseekers and your foundation. Have net grants remained positive and even increased because of your streamlining? Is your foundation making decisions more efficiently? Consider using an anonymous survey—like our Grantee and Applicant Perception Survey—to see what your grantees recommend. Chances are they will offer ideas you haven’t considered. This is a great way to demonstrate that your foundation wants to be sensitive of their time.

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