Is Our Sector "Drowning in Paperwork?"

New report offers findings and ideas for streamlining application and reporting requirements

Drowning in Paperwork, Distracted from Purpose, is a new report from Project Streamline, a collaborative effort of organizations from both sides of the grantmaker/grantseeker divide who are studying grant application and reporting practices, their impact on grantseekers and grantmakers, and the implications for the field. The Connecticut Council for Philanthropy has been one of the key partners in this work.  According to Nancy Roberts who served on the project committee, “Grantmakers often worry that they are asking too much of their nonprofit partners.  This report can help you think seriously about how you can streamline your practice to benefit both sides”.

Almost every funder has a unique application and reporting process that seems both reasonable and necessary. But in our zeal to be thorough, strategic, and effective, we often fail to consider the cumulative impact that thousands of separate requirements have on grantseekers. Our study found that the current system of grant application and reporting creates significant burdens on the time, energy and ultimate effectiveness of nonprofit practitioners.

1. Enormous Variability:  Nonprofits encounter a dizzying range of practice when it comes to the types of information they are required to gather.

2. Requirements Aren’t “Right-Sized”:  Most foundations don’t vary their requirements depending on the size of the grant given, the type of grant given, or their relationship with the grantee.

3. Insufficient “Net Grants”:  Nonprofits must weigh the possibility of funding against the cost of seeking it.  At times, the “net grant” isn’t worth the effort.

4. Outsourced Burdens:  Grantmakers commonly “outsource” administrative and evaluative work to grantseekers—without compensating them for their time and effort.

5. Trust Undermined: Many nonprofits believe that foundations do not trust them and interpret application

6. Reports on a Shelf:  Few foundations use grants reports strategically, either to influence future grantmaking or to share with the field.  In fact some aren’t even read.

7. Fundraising Gymnastics: Application and reporting requirements can cause nonprofits to reinvent themselves and develop strategies that are the opposite of what foundations intend.

8. Due Diligence Redundancy: Grantmakers tend to play it safe at the recommendation of their legal and financial advisors, requiring redundant and often unnecessary documentation from grantseekers.

9. Double-Edged Swords:  Some streamlining strategies, notably online applications and common grant applications, have created new issues for grantmakers and grantseekers alike.

10. Time Drain for Grantmakers too:  Funders struggle with inefficiencies too, including time spent tracking down paperwork. Indeed, 13 percent of foundation dollars are spent on grants administration.

What can we do to continue reducing the burden on nonprofits and free more time and money for mission-based activities?  Here are four core principles to consider:

1. Begin from zero: Begin with a rigorous assessment of what kind of information you really need to make decisions.  Ask:  Are we really going to use this?  Is there another way we can get it?  Have we sufficiently explained to our grantees why we need it?

2. Right-size grant expectations:  Ensure that the effort that grantseekers expend to get a  grant is proportionate to the size of the grant, appropriate to the type of grant, and takes into consideration any existing relationship with the grantee.

3. Relieve the grantee burden:  Minimize the amount of time, effort, and money that grantseekers spend getting and administering grants, creating more time for mission.

4. Make communications and grantmaking processes clear and straightforward: Seek feedback from grantees and applicants, conduct a review of your process, and make sure you communicate clearly and regularly.

To learn more about Project Streamline, read the full report, share your story or comments, and learn about upcoming conversations, please visit www.projectstreamline.org.

Project Streamline is a collaborative initiative of grantmaking and grantseeking organizations, including the Grants Managers Network, the Association of Fundraising Professionals, the Association of Small Foundations, the Council on Foundations, the Forum of Regional Associations of Grantmakers, the Foundation Center, Grantmakers for Effective Organizations, and the National Council of Nonprofit Associations.