Right-Sizing Your Requirements

From Essentials, the Association of Small Foundations Quarterly Newsletter
By Andy Carrol and Editor Kimberly Adkinson of ASF and the Project Streamline Right-Sizing Work Group

Foundations are diligent stewards—taking their responsibilities to support nonprofits seriously and striving to invest their dollars and time wisely. To this end, many foundations develop specialized applications and report forms to gather significant amounts of information from grant applicants and recipients.

These well-intentioned practices, however, multiplied by dozens of foundations, place a heavy burden on grantseekers and grantees. A single nonprofit can spend thousands of dollars applying for and fulfilling the requirements for an individual grant, reducing the value of the grant by the true cost of fundraising and grants management.

In these economic times, as resources are tightening while the demand for nonprofit services grows, reducing a nonprofit’s administrative burden is one way to make more resources available for programs and services—and right-sizing is a great way to do so.

What Is Right-Sizing?

Right-sizing means tailoring what you require of grantseekers and grantees to apply for and report on grants so that the requirements are proportionate to the size of grant, appropriate to the type of grant, and reflective of any existing relationship with the grantee.

In short, right-sizing considers the notion of “net grants”—the grant dollars received after subtracting the cost of applying for and managing the grant. Does applying for a grant from your foundation result in a positive net grant for the grantee?

Project Streamline, a national effort to support grantmakers as they reduce paperwork and associated costs for themselves and their grantees, reports the following about today’s grantmaking practices:

  • Only 28% of foundations vary their requirements for previously funded organizations.
  • Only 34% of foundations vary their requirements by grant size.
  • Only 41% of foundations vary their requirements by grant type.

How can you right-size your grant applications and reports yet still get the information you need to make decisions and assess your impact? Read on for 10 suggestions from Project Streamline and ASF members.

Ten Ways to Right-Size

  • Identify the information that is essential for your foundation to make a grant decision and request only that information in your grant application. Consider how you will use the information.
  • Develop different versions of your application tailored to the types of funding you offer, such as project support, general operating support, and capital project funding.
  • Set page limits or ranges as part of your grant application to make clear the scope and depth of information you are seeking for different sizes and types of grants.
  • Develop a streamlined application and report form for small grants to ensure the grant is worthwhile. Does applying for a small grant from your foundation result in a positive net grant?
  • Test your streamlined applications with existing grantees and ask for feedback. Chances are they will offer ideas you haven’t considered.
  • Ask grantseekers to submit applications electronically and allow them to link to online information about their organizations, such as mission statements and program descriptions, instead of mailing you those documents.
  • Allow grantseekers to submit financial information in original, off-the-shelf formats rather than require reformatting. Nonprofits spend a huge amount of time tailoring financial data to the individual needs of different funders.
  • Align reporting requirements to the size and type of grant. Instead of asking for a written report, consider inviting key grantees to talk about their projects or their organizations over coffee or lunch.
  • For renewal grants, make reporting on the previous grant part of the process to apply for subsequent funding.
  • Store grantee information in an Excel file, database, or grants management system. Then ask organizations you’ve supported in the past to submit updates only, without resubmitting documents and information they’ve already sent you.

Be sure to take stock! After a year, ask if right-sizing has benefitted grantseekers and your foundation. Have net grants remained positive and even increased as a result of your streamlining? Is your foundation making decisions more efficiently?

ASF Members Who Right-Size

ASF members are streamlining their grant applications and reports—starting with a key question: What information do we really need to make a grant decision and evaluate our impact? Although the answer differs for each foundation, many are finding ways to reduce administrative burdens for themselves and their grantees.

Zell Family Foundation in Massachusetts created a streamlined application process for its small grants program. Operating every other year, the program offers grants up to $5,000 for general operations, programs, or other organizational needs. The streamlined “by invitation only” application includes a two-page concept letter, budget information in an as-is format, and financial statements. “The small organizations appreciate the shorter format and relatively quick turnaround time,” says Trustee Amy Zell Ellsworth, “and our board appreciates the more limited amount of information to review.”

To ease the administrative burden on key grantees during the recession, The Jackson Foundation in Texas streamlined its application for the previously funded organizations most aligned with its mission. The foundation eliminated several questions that asked for overlapping information and reduced the amount of information required for evaluation. Says Executive Director Carol Deason, “During this tough year, we wanted to make it simpler for these groups to apply for funding—especially for general operations.”

In late 2008, The Faye McBeath Foundation in Wisconsin created a streamlined grant application and reporting process to swiftly meet critical needs. According to Executive Director Scott Gelzer, “The foundation reshaped and slimmed down the area’s common application form to reflect a focus on food, shelter, and basic income. From the time the application went out the first week of December to the time we made grant decisions was a little over 3 weeks. Most groups had their checks before December 31 and several credited this effort to ensuring services during the holidays.”

See what other ASF members require in their grant applications and reports at www.smallfoundations.org/Samples.

Project Streamline