Strategic Grants Management: What is it? Why do you need it? How do you get it?
Over the course of working with nearly 100 foundation clients, we have found that we often need to explain grants management to foundation leaders and make the case for why every foundation needs a strategic grants management function. To help us tell the story, we developed a model that catalogs all of the key grants management responsibilities that a foundation typically performs.
After presenting this model to foundation leaders and peers and seeing its impact, we’ve become wholly convinced that every foundation needs at least one dedicated grants management professional in a leadership position to run a centralized function that performs all of the core grants management responsibilities and activities. This is strategic grants management.
A strategic grants management function partners with staff across the foundation to improve the overall efficiency and quality of the grantmaking policies, processes, and systems, while also working to move their organizations and the sector toward values-aligned grantmaking.
We’re excited to finally consolidate and share 1892 consulting’s perspective on strategic grants management as well as introduce a set of resources and a new tool to help design the ideal grants management team.
The Case for a CENTRALIZED Function
Grants management sits at the intersection of all foundation departments and audiences, providing data and information to support the foundation’s strategy, knowledge, and learning in service of community.
While many foundations have centralized grants management functions, we still encounter foundations with decentralized grants management, meaning the grants management responsibilities are spread across staff in several functions, including program, finance, legal, and/or IT. This structure is an impediment to strategic grantmaking and also regularly inhibits the ability to provide an efficient and holistic approach throughout the complete grant lifecycle.
For example, our team has worked with a few foundations where a grantee has simultaneously applied for funding from different program teams. In some cases, the grantee is asked to provide duplicative information on each program application, including organizational details and documents. A centralized grants management team can ensure that the grant application process is transparent and streamlined across all program areas and grantee organizations. Alternatively, a centralized team can suggest another type of grant, such as general operating support, to avoid the grantee needing to submit multiple grant applications.
Another challenge with decentralized grants management is the inability to quickly respond with holistic solutions to process and system issues. We often encounter program staff using shadow spreadsheets to track active and prospective grants. The manual upkeep of these spreadsheets is time consuming and error-prone–one of our clients once had a $1 million variance from the true grantmaking budget! If the shadow spreadsheet is owned by program staff, payments and budgets are owned by finance, and the grantmaking system is owned by IT, there’s no single role or team that can proactively spot issues.
A centralized grants management team will not only identify the problem, they will bring together all of the individuals and teams to design, build, and test a pipeline planning tool and process in the grantmaking system to ensure program staff can easily and accurately track their prospective grants and grantee organizations, and finance can ensure enough cash on hand at the time of payment.
Designing the IDEAL TEAM
Even if a foundation recognizes the importance of a centralized grants management function, they may still overlook the need to staff the team appropriately, e.g., not hiring the correct number of staff at the right levels or not having identified the correct skill sets based on the types of grants awarded.
While every foundation is a bit unique, we have found that the following four grantmaking characteristics are the most important indicators to consider when designing a strategic grants management function.
Volume: What is the total volume of grant activities, including grants, payments, reports, & amendments? Include also letters of inquiry, applications, requests for proposals, board/staff matching gifts (if processed in house), and any non-grant activities that may involve the grants management function, e.g., program related investments, contracts, direct charitable activities.
Complexity: How complex is the grantmaking portfolio, e.g., fiscal sponsors, non-U.S. entities, non-501(c)(3) organizations, intermediaries/subgrants, pooled funds, donor-advised funds, matching with conditions? Does the foundation award from multiple grantmaking entities or process other non-grant awards, e.g., program related investments, contracts, direct charitable activities?
Engagement: How high-touch are communications and interactions with applicants/grantees, program staff, and other foundation teams? Are there other audiences involved, e.g., reviewers, donors?
Systems/Data: How configured is the grantmaking system? What is the need for internal grantmaking data reports and analysis?
Each of these four grantmaking characteristics is its own continuum, and they are also all inter-connected. There is no optimal place for a foundation to sit along any of these areas. Generally speaking, when a foundation’s grantmaking practices lean more toward the high end of any of these areas, that foundation will likely require more grants management professionals and/or grants management professionals with more nuanced skill-sets.
For example, a high volume grantmaker awarding 800 grants per year of mostly general operating support grants (i.e., low complexity) could primarily be staffed with grants associates. On the other hand, a low volume grantmaker awarding 200 grants to mostly non-US entities and for profit companies (i.e., high complexity) may need to be staffed by grants officers/managers with more nuanced skill sets and experience.
Ready to design a strategic grants management team? Try out our new tool!
Note: This tool is intended for illustrative purposes only and is not a prescribed staffing plan. Additional factors may need to be considered for your particular grantmaking organization.
For a more tailored assessment of your foundation’s grants management function, please contact us.