At effective foundations, the how of grantmaking is everyone’s business.
When grantmakers think about their funding strategy, we often focus on where we will give, to what, and to whom. We think about the results we want our funding to spark or enable. But strategy is supported (or not) by operations: the way in which grantmaking programs are structured and how grants are introduced, applied for, screened, decided, made, monitored, reported upon, assessed, and learned from. These funder practices are what we call “the how.”
When practices align with strategy, they support the impact that the funder wants to have. When they are discordant, they undermine relationships and results. When — as is more common — practices are simply unexamined, grantmakers miss an opportunity to strengthen the effectiveness of their funding.
As the organizing body of the grants management profession, Grants Managers Network has always played a key role in representing and elevating the potential of grantmaking practices and grants management. Project Streamline was GMN’s first field-wide change effort and its success has raised awareness that burdensome and onerous application and reporting processes waste the time and resources of grantseekers and grantmakers alike.
But we’ve come to believe that the opportunity is bigger than streamlining application and reporting processes. We believe funders aren’t doing all they can unless they value effective practice as integral to strategy and take concrete steps to make grantmaking practice — and grants management — everyone’s business. Over the last year, we’ve looked across the field to better understand attitudes and perceptions about grants management and grantmaking practices, and have taken deep dives to learn more about foundations that are intentionally moving toward “successful structures” that integrate operations and program for greater impact.
Organizations working toward these successful structures are all different, but they have five essential characteristics in common:
- Senior leadership values effective practice and demonstrates that how grants get made matters. To strengthen grantmaking, executives must be willing to delve more deeply into how grants get made. In organizations moving toward successful structures, we found that foundation CEOs and senior staff care deeply and concretely about how grantmaking practice reflects foundation values and strengthens the impact of grants on nonprofits and communities. For example, when Jennifer Ford-Reedy became president of the Minnesota-based Bush Foundation, she immediately set the expectation that relationships with grantseekers and grantees are of critical importance. As one program director explained, “When your new CEO asks to review all the decline letters, you know she really cares about this customer service thing. She set the tone: how we do grantmaking matters…”
- Grants management expertise is “upstream” in the decision-making process. In a successful structure, leaders make sure that consideration of operational realities is part of the big-picture planning process, rather than an afterthought. Having grants management upstream means that at moments when key strategic or programmatic decisions are made, someone with a keen understanding of grantmaking practice is at the table, participating with standing and authority. Grants managers can weigh in on potential complexities, recommend effective ways to structure grants, alert leadership to situations that will require additional staff time, and prepare their team to effectively manage special cases. When the Hill-Snowdon Foundation faced unprecedented declines in its endowment, for example, grants management played a critical role in vetting and structuring a “rolling black-out” strategy that had been imagined and approved by the Foundation’s executive and Board.
- Deliberate cross-functional structures increase empathy and communication. Breaking down silos is a favorite topic in philanthropy — and the next frontier is breaking down the silos separating programs and operations. When program staff and grants management staff understand each others’ priorities, they can facilitate solutions that best serve the whole organization. At the William and Flora Hewlett Foundation, for example, grants managers are embedded within program teams, where they can stay on top of priorities and be alert to developing plans that might create complex grantmaking and due-diligence situations. In other organizations, such as the Blue Shield of California Foundation, this structural integration has been achieved through the development of a cross-functional team that identifies and addresses issues that affect the whole organization.
- Grants management is positioned as a “hub” for data analytics, leading to learning in real time. Funders have a tendency to jump over an assessment of their own systems and practices on their way to evaluating grantee performance. But grants management technology allows us to collect and analyze data about everything from where grants go to the percentage of declines to how long it takes to cut a check. In organizations with successful structures, grants managers often serve as the data hub, taking the lead in analyzing and displaying that data to help the organization determine whether grantmaking is streamlined, effective, and strategic. For more on what kinds of questions funders should be able to answer about their grantmaking practices, check out GMN’s resource, Assessing the How of Grantmaking.
- Grants Management 2.0 emphasizes a different kind of “talent” and professional development. Grants management is changing. Highly effective and efficient grantmaking processes require grants managers who can gather data, make a compelling case for change, navigate organizational culture, redesign business processes that may be deeply entrenched, communicate internally and externally, and test and assess new processes — all while simultaneously making grants. Finding and keeping grants managers with these hard and soft skills means a different kind of recruiting, professional development, salary, and position.
The funders we’ve been learning from don’t claim to have arrived at perfect “successful structures.” But we think that by working toward these five characteristics, they are on their way to becoming more intentional, more effective grantmakers.