Unique Reporting Challenges for Corporate Grant Programs (And How to Solve Them)

Compliance in reporting consumes nonprofits’ most valuable resources and distracts them from their purpose. Can corporate grantmakers help ease the burden?

Time, energy, and effectiveness. These are three vital resources for nonprofit organizations. The challenge of reporting compliance consumes all three and distracts them from their purpose. Is there a way to keep them from drowning in that sea of paperwork?

There are over 71,000 grantmaking organizations with assets of more than $550.6 billion operating in the United States. Their systems for reporting are almost as varied as their number.

Everybody’s doing it a different way. A Rand Corporation case study illustrates this best. The nonprofit corporation it followed spent 11% of its budget and 44% of its time complying with funder requests.

Two big areas eating time and productivity

What are the culprits? They’re concentrated in two main areas:

Administrative: Grantseekers have to create and send multiple proposal copies and accompanying materials. They have to copy, collate, and even hole-punch each one.

Many foundations still want proposals submitted by mail. Then there’s the grantmaker’s need for copies of the IRS Letter of Determination and other due-diligence information. It’s a requirement even if the grantseeker was previously funded.

Evaluative: The funder wants to measure impact. It requires the grantee to conduct evaluation. That evaluation doesn’t align with the grantee’s own reporting. The grantee has to create a new set of books for each grant.

There’s more to demonstrating impact. Grantees may also be asked to submit testimonials and speak on panels.

The cumulative result? Impact assessment requires unfamiliar tools and processes. It eats grantee time and resources and there’s no benefit at all to the grantee.

Bad blood

All this paperwork and reporting effort creates an unproductive relationship between grantmakers and their recipients. Grantees are left to feel that foundations do not trust them. The burdens of reporting are their evidence.

Grantmakers use reporting information to check compliance. They also must ensure they’re not funding organizations affiliated with terrorist groups. Due diligence requirements have increased in response to the U.S. Patriot Act and other governmental orders. The Pension Protection Act of 2006 added more. Grantmakers play it safe at the recommendation of their legal and financial advisors. That means redundant and unnecessary documentation from grantseekers.

Compliance is necessary. There are ways, though, to keep it from souring relationships.

Standardized grant application

Take it online: It’s a time-saver for everyone. It gives grantseekers access to online information, applying, and reporting. Grantmakers spend less time sending information in the mail. Grant management software can poll tax status information. Grantees can store their financial, board, and historical information online. They can also retrieve past proposals and reports.

Application and reporting: A move in this direction is most positive direction of all. It may not be possible for a unified solution. Most regional funders, though, could move toward a single set of application and reporting standards.

Centralized data repositories: These databases of basic information would save grantees from having to send the same information again and again to different grantmakers. Allowing the repositories to be sharable would be even more helpful. The data most often needed is:

• Financial data

• Organizational history

• IRS verification forms. Grantmakers can already find this online using resources such as GuideStar’s Charity Check, IRS Publication 78, or the IRS Business Master File.

This is a solution with an evolutionary track. It will require grantmakers to move toward collaboration. Some Versaic clients let returning applicants duplicate the redundant portions of their applications to streamline this process.

Take back the burden

The most impactful way funders can reduce the burden grantseeking places on grantees is to minimize reporting requirements. Scrutinize the process and streamline it. Are multiple copies of applications and reporting documents really necessary? Do foundations truly have to translate their budget to match yours?

Innovative grantmakers are breaking up the application process into smaller pieces. If an applicant successfully fulfills the requirements of one step, they’re invited to move to the next. It’s a huge time-saver for both sides.

Building tools

Each minute and dollar a grantseeker or grantee spends to get or administer a grant impacts their mission-based activities. Every solution you put in place to reduce reporting challenges strengthens the impact of your grant. Everybody wins. It’s an investment in your investment.

To learn more about how Versaic can help you solve your biggest reporting challenges and track grantees’ progress within particular grants, contact us today.