Good Intentions, Not-So-Good Practices?

Grantmakers want to adopt more nonprofit-friendly practices, but are slow to institute those changes within their own organizations, a report by Grantmakers for Effective Organizations found. Is Grantmaking Getting Smarter? surveyed more than 800 foundations about their grantmaking practices and communications with nonprofit grantees.

In separate interviews, GEO found that foundation leaders and staff said practices like covering overhead costs for grant proposals, making more general operating support grants, and soliciting feedback from grantees through a third party are all likely to have a positive impact on grantmaking.

But the survey found that many foundations had not yet instituted these practices.

Only 20 percent of foundations in the study said that their grants include enough overhead to cover the amount of time grantees spend on their reports.  And just over 20 percent said the proportion of grant dollars devoted to general operating support has increased in the last three years. When it comes to soliciting feedback, only 12 percent of grantmakers surveyed have collected information on the time grantees spend to meet their requirements.  And less than four out of ten grantmakers said they solicit feedback of any kind from grantees.

The study did find “pockets of progress” in the field where foundations have successfully changed grantmaking practices to relieve the burden on their grantees. In one of the study’s most striking findings, foundations that have adopted grantee-friendly practices were significantly more likely to have board members and staff with a nonprofit background. These foundations were twice as likely to support grantee capacity building and nearly three times more likely to directly support grantee leadership.

The Hawai’i Community Foundation was cited as one example of foundation responsiveness to grantees. “We no longer just make grants. We will share our ideas and thoughts on what we want to do and get a lot of feedback,” says Christine van Bergeijk, Vice President of Programs. “Sometimes you may not like what you hear, but you need real dialogue with grantees so that everyone can do a better job.”

GEO intends to survey the field again in 2011, using the 2008 response as a baseline. The entire report can be found here.

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