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Why Do We Bother? The Tragedy of Foundation Reporting Requirements

Date: November 10, 2021

Kevin Bolduc

Vice President, Assessment and Advisory Services, CEP

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There’s essentially nothing a foundation must do when it comes to asking most nonprofits to provide reports on the grants they’ve received. In fact, there’s no regulation that requires a funder to have a reporting process at all. (Expenditure responsibility grants are a major exception, of course.) Yet nearly all foundations do require reports for virtually all their grantees. It’s a tragedy because, as far as I can tell, foundation staff and grantees alike often suffer under the burden of an invented system, filled with bespoke reporting requirements that don’t seem to be doing anyone much good. I’m going to take a risk here and suggest that funders should throw out reporting as it exists altogether.

In the Center for Effective Philanthropy (CEP)’s Grantee Perception Reports, we ask grantees to estimate how much time they spend on monitoring, reporting, and evaluation. For the typical grant, it’s about 8 hours per year. On average, grantees are often spending 30 hours or more across the lifetime of their grant. Multiply that across a nonprofit’s multiple grants, and what might seem like a minor annoyance can really add up. And while reporting isn’t the most common topic grantees write about in our feedback surveys (they’re more likely to suggest improvements to long and confusing applications), grantees sure seem to mention it when a foundation’s requirements — especially inflexible, detailed budget forms — diverge from common approaches.

I think of reporting requirements like Boston summer humidity — generally annoying and sometimes overwhelming enough to make everyone hot and bothered.

That pain could be worth it if reporting was providing great value to grantees, funders, or nonprofits, but, with a few exceptions, it doesn’t seem to be. In the Grantee Perception Report, questions related to reporting historically have received some of the lowest ratings in the whole survey. In fact, a question about the helpfulness of a funder’s reporting process in strengthening grantees was the lowest rated question in the entire grantee survey of more than forty questions. Not to mention, grantees can feel fundamentally disrespected when their reports, unacknowledged, seem to fall into a fiery furnace, as Jessica Bearman evocatively wrote in a previous lament about reporting.

Here’s the truth: we actually know what makes reporting more helpful — or at least what gives it a chance to be a substantive, strategic, learning interaction between grantees and funders. How? It’s when the reporting process is used to create engagement between funders and grantees about both grantees’ approach to their own assessment and the content of the reports they’ve submitted.

For example, in GPR engagements, we often see meaningfully more positive results associated with an affirmative grantee answer to this simple question: did you discuss with your funder “how your organization would assess the results of the work funded by this grant?” Grantees who have had those conversations with their funders often provide more positive ratings on questions as varied as the helpfulness of the reporting process to them, the clarity of a foundation’s communication, and perceptions of their funder’s understanding of their goals and the context in which they work. Likewise, over many years of surveys, only about 60 percent of grantees say they’ve discussed the report they submitted with someone at their funder. Similarly, those that did have that kind of discussion often provide higher ratings across a whole host of survey questions.

On the other side of the equation, why aren’t grantee reports more valuable to funders? On this topic, I’m a little less definitive. But when I ask program staff this question, I tend to hear one of a few very reasonable answers:

  • The timing of reporting is off. Reports are often coming in close to when program officers are talking to grantees about future funding. Completely rationally for everyone, reports are not the most important topic of conversation at that point.
  • Reports feel redundant. Program officers tell me they don’t make time for a conversation about every report because they often already know what’s in the report without reading it. They’ve had conversations with grantees throughout the grant.
  • Reading reports is not urgent. Reports are always a lower priority than either helping a grantee or responding to internal responsibilities and requests.

So, reports pile up and become overwhelming. They’re always that “other thing” hanging over a program officer’s head, creating a vague sense of guilt and remorse.

These are solvable problems, 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.

From CEP’s research, we know that about 70 percent of nonprofits said that at least some of their funders relaxed or canceled reporting requirements during COVID. Grantees appreciated that shift and funders can learn from it. My colleague Satia will write more about this in a forthcoming blog based on post-pandemic research surveys CEP has conducted.

In Grantee Perception Reports, nonprofits have commented over the last year and a half on better-timed, more flexible formats, like verbal reporting that focuses on grantee needs. Likewise, funders say they are (finally) increasing the proportion of unrestricted support they provide. That can make reporting faster for grantees, more straightforward, and more easily repurposed across funders. New CEP research, Foundations Respond to Crisis: Lasting Change?, reveals that funders say they intend to maintain both these changes.

Let’s keep the trend going — at least funders need to right-size their reporting to the utility (or lack of) that those reports are providing. Better yet, funders could turn reports into conversations focused on targeted learning questions or broader cross-portfolio inquiries that will be shared back with the fields and communities whose nonprofits took their time to share their perspectives. Even better, there could be ways to move some of this learning to the public domain. Imagine video or narrative grantee report repositories that multiple funders could proactively draw from when they wanted to learn what’s working or not for their grantees.

Of course, any proof of lasting change will be apparent only in the coming years, but I, for one, remain hopeful because I see funders rising to this occasion. For example, I’ve been inspired by the efforts of Rachel Kimber and Blanch Vance, grants managers at Arcus and Grove Foundations respectively, who initiated a PEAK Grantmaking working group about the value and implementation of alternate reporting formats, like oral or group reporting. The first working group conversation had more than a hundred funders participate. Nearly the same number joined a second one, focused on case studies from funders that have experimented with verbal reporting. (Full disclosure: I’m a member of the PEAK Grantmaking board of directors.)

My advice to funders: do it. Be clear about the actual purpose of your reporting. Drastically minimize where you can. Take more of the burden on yourself by treating reporting as an opportunity for engagement, focused on specific learning questions that can be discussed, synthesized, and shared back with grantees.

And, ultimately, ask yourself a simple question: am I willing to engage with what grantees share and then discuss it with them? If the answer is no, then there’s a simple solution: don’t ask in the first place. Save everyone a little pain.

Kevin Bolduc is vice president, assessment and advisory services, at CEP. Follow him on Twitter at @kmbolduc.

Editor’s Note: CEP publishes a range of perspectives. The views expressed here are those of the authors, not necessarily those of CEP.

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