This is the second post in a six-part series on what nonprofit leaders think foundation funders could improve upon in their work. Findings are based on survey responses from 244 nonprofit leaders who have agreed to be a part of CEP’s Grantee Voice Panel — a nationally representative sample of leaders of U.S. nonprofits across a broad range of geographies, fields/issues, and sizes who confidentially provide CEP with their perspectives working with foundations.
The nonprofit sector is hugely diverse. Nonprofits come in many sizes and structures, with different purposes, approaches, contexts, strategies, issue areas, and communities served. Yet nonprofit leaders agree on a lot — including the improvements they would like to see foundations make to their grantmaking processes.
More than 20 percent of nonprofit CEOs identify opportunity for funders to improve foundation application, reporting, and evaluation processes. Here is what nonprofits want from their funders throughout grant processes:
Be more transparent. Nonprofit CEOs see room for funders to set and communicate expectations more clearly and transparently, especially when it comes to process requirements.
What are the funder’s goals and strategies? Knowing this helps nonprofits understand how their work aligns with that of the foundation and decide whether or not they should apply for funding. One nonprofit leader, for example, requests of funders, “Please make your guidelines and your decision-making process more transparent,” while another adds, “Be more specific about funding priorities so we can decide whether putting together a proposal is a worthwhile use of time and resources.” (By the way, these are among key findings in CEP’s research report Sharing What Matters: Foundation Transparency.)
How long will it take to provide a funding decision? This information helps nonprofits plan and budget. One nonprofit leader said, “Be honest and timely…If you aren’t going to fund us, let us know immediately.” Another requests that funders “make clear the date that a decision will be made and communicate even if you aren’t going to fund our project.”
How are funders using grantees’ reports? Grantees want to understand how the time they spend sharing insights in submitted reports are informing foundation learning and planning, and they want to engage in discussions about this with their funders.
Streamline. Nonprofit CEOs suggest more streamlined, straightforward, and standardized processes that are commensurate with grant size. As one notes, “Preparing grant applications is a huge amount of work. This can be very valuable work and of course, there needs to be a process by which funders can gauge alignment of their goals with an applicant. But application length should be somewhat commensurate to the funding available.”
This is not a new suggestion, and numerous efforts like PEAK Grantmaking’s Project Streamline initiative seek to address these challenges. Yet they persist. One CEO pleads for funders to “minimize the paperwork. We jump through hoops for $1,000. And then you slam us for having overhead.”
Some nonprofit leaders note that required paperwork sometimes “needlessly consumes time and generates frustration.” Online portals don’t always create the efficiencies one might hope technology would create; one grantee suggests that funders try to complete their own forms before asking nonprofits to use them. (Barr Foundation is trying that out this year.) And technical requirements can be frustrating when word count limits don’t allow nonprofits to tell their story or when questions aren’t relevant to a nonprofit’s context.
Utilize more relevant, reasonable metrics. Nonprofit CEOs are concerned about using metrics that don’t accurately capture outcomes and that too often prioritize funders’ needs over grantees’. They also describe unnecessarily overwhelming data requirements. One nonprofit leader cautions, “Metrics are important, but often, the easiest metrics to track are the least indicative of the long-term, full impact of a program.” Says another: “While data is essential to nonprofits in ensuring program efficacy and long-term learning, these priorities should be nonprofit-driven. Capturing specific, foundation-led data can be arduous in staff time and not terribly useful for the nonprofit.”
Some CEOs express interest in hearing more from their funders about how metrics and outcomes, as well as reports and evaluations, are used inside the foundation.
Be honest with declined applicants and provide feedback when requested. Nonprofit CEOs request more openness and honesty following a declination. “Knowing why a funder does not fund a project would be very helpful for writing future proposals,” says one nonprofit leader.
Another pleads: “Please stop sending form rejection letters. The [explanation that] ‘the work your organization is doing is very valuable and we just don’t have enough money to fund all worthy causes’ is old and tired. It offers us no feedback as to what makes an organization fundable. Was it the proposal? Was it too dry, too emotional, or contain too many grammatical errors? Is it the work itself? Are we not making a big enough impact to make your investment valuable? Is it our management style? Please, for heaven’s sake, give us something to go on! It will help to strengthen our organizations, even if we’ll never get funding from you. And stronger organizations benefit everyone.”
These comments aren’t new. They closely align with suggestions we have commonly seen for the better part of two decades from foundation grantees responding to CEP’s Grantee Perception Reports for specific funders. And they closely align with findings in numerous CEP research reports — for example, that both foundation and nonprofit CEOs tie transparency to the substantive work of foundations (Sharing What Matters: Foundation Transparency), and that the utility of foundations’ data requirements matter (Assessing to Achieve High Performance: What Nonprofits Are Doing and How Foundations Can Help).
Other data we have analyzed at CEP supports the case that there is real opportunity for funders to improve aspects of their processes. When we look at the GPR dataset as a whole, for example, we see very little change over time in the reported helpfulness of participating in a selection process in strengthening the organization/program funded by the grant. And we haven’t observed any drop in the time grantees spend on application and reporting processes, either.
Yes, processes are an inherent part of grantmaking crucial for allowing funders to make informed decisions. Yet, there is a clear opportunity to reduce the transactional costs for nonprofits and foundation staff alike, and to make processes less painful, more clear, and more helpful.
To staff at foundations, we want to offer some discussion questions to consider as you reflect on these suggestions and think about where you can improve your processes in ways that can help you and your grantees:
- Where can you communicate more clearly and transparently to help find nonprofits whose work is most aligned with what you’re hoping to achieve and how you’re hoping to achieve it? Where can you set clearer expectations about timelines, requirements, and decisions?
- Where can you simplify and streamline your processes to make them commensurate with grant size and reduce the transactional costs for both you and nonprofits? For a great starting point, check out the many examples of streamlining shared as part of PEAK Grantmaking’s Project Streamline.
- In what ways can you communicate more with grantees about applications, reports, and evaluations, including offering feedback to declined applicants?
See all posts in the series here.
Naomi Orensten is director, research, at CEP. Matthew H Leiwant is a former associate manager, research, at CEP.