Research Corner
National Study Shows Streamlining is Catching On
More foundations are streamlining their grantmaking processes, according to a field study by Grantmakers for Effective Organizations in partnership with the TCC Group. The summary report—Is Grantmaking Getting Smarter?: A National Field Study of Grantmaker Practices—offers encouraging data regarding efforts at streamlining. The study, completed in 2011, is the third of its kind, following surveys in 2003 and 2008.
Right-Sizing is on the Rise
Project Streamline calls for grantmakers to ensure that net grants are worthwhile by scaling the efforts that grantseekers expend to get a grant so that they are proportionate to the size of the grant, appropriate to the type of grant, and take into consideration any existing relationship with the grantee. This can be done by right-sizing application and reporting practices.
The 2011 field study results indicate that significantly more foundations are right-sizing their application processes. Half of the survey participants indicated that their application requirements are “often or always” proportionate to the size and type of the grant. Only 41 percent of foundations engaged in this practice in 2008. Additionally, more than half of the foundations reported that they:
- Explain their rationale for rejecting funding requests to applicants (64 percent)
- Accept grantee applications and reports submitted online or as email attachments (60 percent)
The Burden on Grantees is a Little Lighter
Project Streamline asks grantmakers to find ways to minimize the time, effort, and money that nonprofits spend on getting and administering grants so that those resources can be devoted to mission-based activities. Only 12 percent of respondents in the field surveys in 2011 and 2008 reported that they collect information about how long it takes grantees to meet the organization’s administrative requirements.
Application and Award Practices
The 2011 field survey respondents reported a median reduction of 30 days (from length of time reported in 2008) from the time that grant requests are received to when the funding is completed. They also indicated greater efficiency in the approval and payment of grants, and there is some evidence of faster acknowledgement of funding.
Foundations have used a variety of methods to reduce the time it takes to process a typical grant. For example, one funder streamlined its review process “by reducing the portion of grants that are made through unsolicited proposal process[es] and increasing discretionary grants that can be quickly appraised and approved by a committee.” Another indicated that the improvement in the processing times was due to the development of “deeper relationships with grantees over time.” This meant there was “less time needed for ‘back and forth’ during the review process.”
Reporting Practices
Although more foundations are streamlining their application practices and soliciting input from their grantees, reporting practices have not seen the same level of improvement. Slightly fewer foundations in 2011 are using reports to foster learning and exchange with their grantees (53 percent in 2011 compared to 59 percent in 2008). Additionally, the percent of organizations that had at least one employee tasked with reading grantee reports declined from 98 percent in 2008 to 92 percent in 2011. Finally, fewer grantmakers are including the appropriate overhead costs in their grants to cover the expense of reporting. In 2008, 20 percent of funders factored these expenses into their grants. In 2011, that rate dropped to 18 percent.
The study does indicate a small improvement in the amount of time it takes for foundations to acknowledge the receipt of reports. In 2011, 63 percent of survey participants sent an acknowledgement within four weeks compared to 56 percent who did so in 2008.
Improving Communications
Project Streamline asks grantmakers to ensure communications and grantmaking processes are clear and straightforward. The study reported good news in this area.
More grantmakers solicit feedback on their processes using surveys, interviews, or focus groups. In 2011:
- 44 percent of respondents solicited feedback, compared to 36 percent in 2008
- 31 percent of respondents solicited this feedback non-anonymously in 2011, compared to 25 percent in 2008
- 30 percent of foundations reported soliciting anonymous feedback in 2011, compared to 22 percent in 2008
The largest foundations (more than $400 million in assets) are more likely to solicit anonymous feedback, with more than 67 percent responding that they solicited anonymous feedback. Among the smallest foundations (under 10 million in assets), only 19 percent report soliciting anonymous feedback.
Conclusions
The results of the 2011 survey of grantmaker practices demonstrate that streamlining is growing both in interest and implementation, but there is still room for improvement among grantmakers of all sizes. Continuing the work of Project Streamline is critical to increasing awareness about the need for and benefits of streamlining, both for funders and grantseekers.