Time To Revisit Reporting

Wednesday, October 4, 2017

This post from Jessica Bearman and Elizabeth Myrick, consultants to Project Streamline an initiative of PEAK Grantmaking, was originally published by the Center for Effective Philanthropy.

Back when Project Streamline — a project of PEAK Grantmaking — was a fledgling initiative, grant reporting seemed to be the least of our concerns. Since funders spend the most time and energy finding and selecting grantees, application practices seemed the more pressing and immediate issue and opportunity for streamlining.

The most urgent problem at the time was funders unintentionally or unknowingly asking too much of grantseekers’ time prior to — or even without — giving them a grant. Once a grantee has a grant, time wasting might be a problem, but at least the money is in hand.

Over time, streamlining has become a common concept in philanthropy. Along with the internet and widespread use of online grantmaking systems, the basic principles and recommended practices of streamlining have helped many grantmakers to reduce the burden on nonprofit grantseekers. But it’s crucial that we turn back to the other end of the grantmaking sequence, to a question that has nagged Project Streamline since the start: what if grant reporting is our field’s missed opportunity?

Too often, funders are missing the connections, lessons, and relationships that grant reporting could and should be making.  Reporting is often our field’s first (and sometimes only) opportunity to explore the space between what we hoped for and what actually happened.

Certainly, there are many possible purposes for grant reports:

  • Accountability: a way to know whether and how the grant money has been used for its intended purposes.
  • Documentation: to ensure a record of a grantee’s history with the funder so that when a program officer leaves, all information stays with the funder.
  • Grantee support and relationship building: reporting can be used as part of an ongoing conversation with grantees about what they are learning and what they need to succeed.
  • Grantee assessment: to determine whether a grantee is eligible and a priority for future funding — or whether that grantee could benefit from capacity support, field connections, or other resources that the funder could offer.
  • Grantmaker learning to inform decision-making: to help determine whether a particular type of grant or portfolio of grants is effective and worthwhile.
  • Stakeholder engagement: sharing grantee stories and lessons with board members, community stakeholders, or more broadly to increase enthusiasm for, and investment in, grantees’ work.
  • Building a field: reports can be used, in aggregate, to draw useful conclusions about a whole field of work or a community — and findings can then be shared back out to the community.

It’s important that we ask ourselves, does our design and use of reporting match our intentions? 

Consider this story about a grantmaker we know.

This very thoughtful and conscientious organization, like many, spends most of its time and effort — let’s say 90 percent — on making grants, and very little time and energy learning from grants.

Their grantees diligently submit reports, with detailed narratives, metrics data, and financial information. In fact, some of the grantees report up to four times per year. Yet, reporting requirements are not tied to specific guidelines or criteria having to do with grant size, risk, or strategy. Even fairly small, low-risk grants sometimes require quarterly reporting, and quarterly fund disbursement is tied to report submission (i.e. a checked box), rather than the substance of the report or grantee progress.

So every six months or quarter, the foundation’s grantees spend 5-10 hours writing each report. Most consider the reports, at worst, “the cost of doing business” and, at best, a chance to share their work with an admired funder that they consider a great partner. In any event, though, grantees say they have “no idea” how their reports are used.

Inside the walls of the foundation, staff admit they don’t have much time for systematic knowledge sharing among program officers. Most reports are not reviewed by the organization’s evaluation staff. Knowledge of what happened with the grant funds tends to stay in the program officer’s head and/or the files.

Preliminary conversations with grants managers, foundation executives, program officers, and other thought leaders tell us this scenario is more common than we might want to believe.

As Aaron Dorfman, executive director of the National Committee for Responsive Philanthropy (NCRP) put it:

If most foundations are honest with themselves, they know that reports are about box checking and compliance. That’s what it feels like to most grantees most of the time. ‘No one is reading this, it’s just for the files. What really matters is what I put in my next application, not what I put in the report.’

We know foundations can choose (or choose not) to require grant reports. Reporting is not required by the IRS, except in cases of expenditure responsibility or other special circumstances.

The time that nonprofits spend reporting to funders has remained constant or gone up, but with few exceptions, we know that reporting about grants is not particularly useful to grantees. (This is obvious to anyone who has worked in or around a nonprofit organization, and is supported by data from previous research by both Project Streamline and CEP.)

Every requirement imposed by a funder takes time. A 2011 CEP report found that grantees spend an average of 20 hours on monitoring and reporting per grant. This time cost adds up, taking money and energy away from what the funder has invested in: the nonprofit or community group’s mission-focused work.

Knowing we have the freedom to set reporting requirements as each of us sees fit, and knowing these requirements necessarily eat into our grantees’ finite resources, Project Streamline is eager to discover just what foundations are requiring and how we can make best use of what we receive. And to move beyond stories and anecdotes, and create a reporting culture based on building relationships and learning from grantees, we need your help!

Project Streamline is surveying foundations to learn more about their approach to reporting. You can access the survey here. Whether or not your experience is similar to our story above — or even if your foundation does not require reports at all — your response is essential to capturing the field’s current reality.

Over the next few months, Project Streamline will be sharing what we learn about reporting reality — the good, the bad, and the inspiring. Your valuable input is the key to demystifying and improving the grant reporting experience for yourself and your grantees. We look forward to hearing from you.

Join in the conversation on Twitter with #RevisitReporting.

Jessica Bearman is principal of Bearman Consulting and a long-time Project Streamline gadfly, helping philanthropic organizations be more effective and have more fun. You can find her on Twitter at @jbearwoman.

Elizabeth Myrick is principal of Elizabeth Myrick Consulting, LLC, where she works with nonprofits, associations, and foundations to enhance and sustain their impact.

Find More By

News type