In many of our materials, including the recently published Donor-Grantee Trap, we discuss the importance of a strong donor-grantee partnership to achieve results. One of the most frequent partnership challenges is the “cost of capital” that donors (often unwittingly) impose on their grantees. Recently, the Foundation Center turned a spotlight on its own grantseeking process to analyze where some of these costs come from. The Foundation Center itself is a nonprofit that each year completes more than 500 grant applications and a similar amount of reports back to funders. With sponsorship from the Ford Foundation, Foundation Center analyzed a random sample of online applications and reports it had prepared over the last two years to compare funder processes and highlight challenges.
What did the Foundation Center find? Essentially, that “the quantity and quality of instructional information and assistance for grantseekers was poor, and vast differences and inconsistencies in procedures, questions, and requirements presented challenges that increased the administrative demand placed on nonprofit staff.” What were some of these challenges specifically? Less than half (44 percent) of reports provided requirements and instructions at the outset, and only 22 percent provided any means of contacting the funder with questions. Sixty-six percent of the reports analyzed required nonprofits to submit foundation-specific budget templates for financial reporting, rather than allowing the nonprofits to submit their own budget numbers. See here for the full report.
The strength of the report to me was the firsthand perspective. Of course, all the organizations funding the Foundation Center want it to be successful in fulfilling its mission, and surely none of them are seeking to impose such burdens. Nonetheless, the felt experience seems to be death by a thousand (virtual) papercuts.
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