A Practical Guide to Collaboration in Grantmaking

Foundations and nonprofits have ambitious goals. In our work, we often talk about how systems change and foundations make major investments to achieve societal impact. This work is incredibly challenging and complex, and, increasingly, we are all coming to the realization that the old ways of working are becoming obsolete. More effective collaboration among funders, grantees and a host of others is essential to achieving our common goals.

To become more effective and impactful together, we must examine our ways of working, communicating and ideating. Unnecessary overhead, siloed working strategies and metrics for metrics sake create a philanthropic grantmaking culture that is functional but far from perfect and prevents true collaboration from taking place.

It’s time to disrupt the outdated work processes and systems that inhibit true partnership. We must change our approach to the grantmaking process in a fundamental way to improve collaboration.

No. 1: Eliminate Unnecessary Overhead

Grants are a critical segment of most nonprofits’ revenue streams. However, the administrative work involved with grant-seeking creates a burden that many organizations find difficult to shoulder with limited resources. Foundations, too, are equally weighed down by the process of reviewing, analyzing and vetting grant applications and partners. It can take as long as a year to secure a grant from a foundation. This cuts into the time both sides could spend making an impact on the ground.

Start by examining the application process. Are the questions leading to only the most essential information needed to make a decision or form a partnership? Are questions redundant, causing duplicate data and review? Are grantees asked to supply data that can be easily obtained with technology (i.e. financial data from GuideStar)? Are guidelines and project requirements clearly underscored to reduce ill-fitted applications? By eliminating everything unnecessary that doesn’t add value, we can ease the burden required to match funding with appropriate partners.

One answer that often emerges is technology. Certainly in measures of time and inefficiency, it’s easy to see how everyone in the ecosystem benefits from technology that facilitates communication and teamwork.

But there’s another benefit I think many overlook. Think about the emotional connection a seamless user experience creates. Perhaps that sounds high minded, but after having worked at the intersection of technology and philanthropy for many years and seeing how companies like Patagonia and Salesforce and Warby Parker have garnered loyalty and changed the way consumers expect to interact with companies, I’m a believer.

Better technology workflows not only strengthen our relationships, but they improve internal operations as well. For example, as the Michigan Health Endowment Fund implemented smart grantmaking software, they saved 2,000 hours over the course of 205 grants and cut the time it took to review a grant in half.

Better technology frees everyone to focus on more important things, like working together on project tasks and reviewing data to inform decisions and next steps.

No. 2: Work Together, Not Apart

A common refrain in the past year has been nonprofits’ desire to engage their foundation partners throughout the lifecycle of a project. And for good reason. Grant officers bring a wealth of expertise, experience and connections to the table, and these resources are as valuable as the funding they provide. Once a grant is approved the real partnership and collaboration begin.

In the old way of working, foundations tended to dictate project goals, expected outcomes and metrics. Yet, this approach runs counter to the reality that nonprofits often have a better sense or different perspective of what works and how to achieve (and measure) it. Both sides, along with other stakeholders who are invested in a project’s outcome, must come together to openly dialogue and exchange ideas on how to best approach their common goals. The result? A deeper understanding of the challenge and the approach towards tackling it.

Open communication between parties is good for grantmaking organizations, too. Grantmakers have a vested interest in understanding how their investments are making an impact, yet they often miss out on opportunities to do so by not fostering meaningful relationships with their grantees. When grantmakers engage with their grantees, they can ensure there’s vision, organizational alignment and an open exchange of ideas to create the biggest impact.

Borrowing from our colleagues in the software development world, implementing key concepts of agile project management processes can lead to better, more predictable outcomes. Using this approach, project teams meet daily to review progress, and stakeholders have the chance to influence the development of the product before it’s complete. Whether stakeholders choose to adopt this method formally or informally isn’t important. What matters is building reflection, iteration and open communication into our grantmaking process.

Such an approach in grantmaking would enable us to collectively examine progress and calibrate midstream to ensure we achieve impact now, rather than discovering too late what might have been done better. Projects should be approached with a one-team perspective, each side providing their resources, expertise and commitment to achieving success.

Imagine the changes this would make on the ground. Rather than waiting for several months to receive an interim impact report, teams can gather frequently to discuss progress and review project data. Doing so promotes critical discussion on what is working and what isn’t. The team can collectively review data and progress, and work together to address issues while the project is being executed. Problems can be seen and addressed earlier, greatly increasing the odds of success.

No. 3: Focus on the Metrics That Actually Matter

Grantees and funders must agree on the work they seek to accomplish and what data to collect to measure the work’s success.

Eventually, however, the work on the ground can change based on the collaborative approach to frequent measurement and calibration, and the data that funders initially requested may no longer relate to how the project has evolved.

Funders must be comfortable with this inevitable change. Nonprofits are often the ones who understand the reality on the ground better than anyone and may have the best understanding of how to execute on the goal in a way that is appropriate to the population being served. Their real-time data and input to process improvement is critical to a collaborative approach to success.

I mention technology above and return to it again here. If foundations could better collect real-time, disaggregated data flowing from grantees to their funders, we could give funders and nonprofits the flexibility they need to revise their metrics and data collection strategies.

Collectively measuring our work will ensure everyone has the opportunity to weigh in on the measures used to define success. This also requires both grantmaking and grant-seeking organizations to be more flexible and able to change direction based on the insights that data provides..

Imagine what we could accomplish with data mined from grantee/funder relationships. We could build comprehensive networks of information that benefit not just our own projects, but entire philanthropic sectors—from health care, to education, to animal welfare. New data could highlight previously unrecognized patterns and provide insights that help all foundations and nonprofits refine their efforts.

Isn’t that what we’re all after anyway?

Building Philanthropy for the Future

A collaborative approach to our work isn’t a new or niche idea. One of the leading foundations in the country, The Knight Foundation,  has built collaboration right into their grantmaking process. Their transparent system allows grantees to see where their request or grant is anywhere in the approval process. Not only do grantees have a strong relationship with the Knight Foundation as a result, but the organization has also cut down on time-intensive administrative tasks like phone calls and emails.

Grantee relationships are a grantmaker’s most critical resource. They make a foundation run, no doubt about it. To take advantage of this resource, funders must see themselves as true partners with grantees, not as a one-and-done transaction.

When foundations and nonprofits with a shared vision partner to deliver on their mission, the world becomes a better place.