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PEAK Grantmaking

Chapter Report: A deep dive into grantmaking legal compliance and streamlining

PEAK Grantmaking’s Greater Washington, DC regional chapter had a packed house for our 2019 fall membership meeting, which kicked off with a presentation on grantmaking legal compliance, followed by afternoon roundtable discussions on streamlining grants processes.

Leading off: Legal Compliance in Grantmaking, presented by Andras Kosaras, Esq. from Arnold & Porter, which focused on:

  • grantmaking legal basics that funders should be aware of including the mandatory distribution (the 5% minimum of assets in “qualifying” distributions funders must make each year);
  • tipping (an overly-large grant made to a tax-exempt organization which may result in the loss of its public charity status);
  • organizations that can be funded with minimal effort including 509(a)(1), 509(a)(2), and government entities;
  • grants that require additional effort by the funder including non-501c3 organizations, foreign charities, private foundations, individuals, and supporting organizations; and
  • do’s and don’ts of funding groups who engage in advocacy and lobbying.

The session wrapped with recommendations for grantmaking policies funders should implement including adopting a simple and functional policy regarding the grantmaking process, describing the grants due diligence process, and what functions should be delegated to the board (if any).

Next up: Streamlining. Participants had the opportunity to jump from roundtable to roundtable to discuss streamlining efforts about applications and reports, GMS integrations, process workflows, and due diligence. Highlights included:

  • Teams that were integrating new grants management systems into their organizations were finding it difficult to change their organizations so the integrations and acceptance within the organization may happen slower than expected.
  • Many organizations in the room were actively working towards implementing paperless processes. One challenge discussed was that paperless processes may contribute to inequity for grantees who do not have access to high speed internet. Organizations are trying to figure out solutions to address that problem so that everyone is able to apply for- or report on a grant. Another challenge is adoption efforts across their organization, including empowering program staff to help with these efforts. Groups that have gone paperless highly recommended evaluating your process and touch points. One group was able to delete enough touch points in the process to decrease a two week process down to a two hour process
  • At the roundtable on due diligence, it was expressed that grantees were not always clear why certain due diligence information was needed, so groups are trying to better explain how it is used and why it is important. Groups are mindful that it can be time-consuming to gather this information, so they rely on information found in tools including CharityNavigator and GuideStar to decrease the burden on grantees.

The results are in: We are excited that our post-meeting survey responses were overwhelmingly positive! Almost all respondents reported that the meeting was directly relevant to their work and that the subject matter matched their level of expertise. Most respondents said that their knowledge of the subject matter expertise increased and that they were able to take some resources back to help their organizations. We look forward to continuing quality programming for our members in 2020!