Why grants can’t be taken for granted

Grants cannot be taken for granted, yet 38 per cent of grant seekers in Australia fail to meet application deadlines. As well as this, large organisations are winning grants both big and small, and pressure is building on local-government grants budgets.

On top of this, a huge amount of effort is being wasted on grant applications that are started but never completed, according to the latest Grants in Australia report from Our Community. Executive director Kathy Richardson says billions of dollars in grants are distributed each year, much of it being taxpayer money.

“We want to make sure that money is used as efficiently and effectively as possible,” she says. “Not a cent should be wasted on inefficient processes; it’s too valuable.”

Previewing the study, grantmaker Jon King from the Community Broadcasting Foundation was “shocked” to learn that so many grant seekers fail to meet application deadlines. “What a waste of time. This is time they could have used for their cause, or to cold-call potential sponsors.”

Regional Arts Fund manager/grantmaker Mary Jane Warfield says many applications are not completed because grants systems are easy to use. Many organisations start an application without checking first if they are actually eligible.

“Sometimes organisations start their application before understanding the eligibility criteria and before speaking with the grantmaker. We find that many of the unfinished applications are for ineligible activities,” she says.

“We also find that many incomplete applications from one round are picked up again the next round. They re-apply once they are more clear about their outcomes and have prepared all the supporting documentation from community consultation.

“Sometimes grant seekers don’t leave enough time before the grant deadline to gather all the supporting documentation.”

Check first

So as not to waste valuable time and ensure success, applicants need to check the objectives of the grant align with their own objectives.

Warfield says grant seeking is similar to sponsorship: it is all about knowing your organisation’s vision and values, and finding a funding body that fits with this.

“In terms of delivering on the grant, the success is all about planning and communication. The recipient needs to ensure they have solid project-management practices in place and is clear on what reporting and record-keeping needs to be done in order to meet the requirements of the grant.”

Open communication with the grantmaker at all stages is highly important. “Grantmakers are often available to recipients and can advise and guide the process if there are stumbling blocks.”

One of the report’s more startling findings for smaller organisations is that large NFPs (annual revenue of more than $1 million) are not just winning substantial grants but are often taking many of the modest grants as well. This could be because bigger organisations often have more access to technology and resources.

Organisations should not simply apply for every grant they see being offered, experts say. It is important to do research to ensure a grant suits the organisation.

“I always say the time charities spend researching will be returned tenfold,” Community Memorial Foundation president Jim Durkan says in the The Chronicle of Philanthropy.

No guarantee

About $26 billion is distributed across Australia in grants each year by local councils, state and federal government agencies, philanthropic trusts, family foundations, community foundations and corporate foundations – a mass movement of money mainly to social causes.

“But good outcomes are not guaranteed,” says Our Community’s Richardson.

Charities and NFP organisations exist to deliver services for the public good. Grants share this aim. “It is a natural fit that charities and grantmakers work together to deliver the best outcomes in service to the community,” says Warfield.

“Diversifying income is important for charities, and grants are one way they can do that. The most important thing for charities is to make sure the objectives of a grant align with their own objectives,” she says.

Richardson agrees that NFP groups should include grants as part of a mix of funding sources – not the sole source – so they can be strong and sustainable.  

Results needed

Grantmakers want outcomes. They want services to have the most impact possible, and for the funded organisation to be enabled to do this. They say they have resources – often not enough to meet demand – and want to see results.

“Grantmaking is essentially buying outcomes; in exchange for money, grantmakers want to see positive results in their area of interest, whether it be delivering on policy outcomes for government, or making a direct impact on the life of an individual, such as a scholarship,” says Warfield.

“Grantmakers also love good evaluation and data, both quantitative and qualitative, so they can see a grant is having a positive impact.”

Meanwhile, the grants report highlights that the shift to online forms is not yet complete. It says it became evident four years ago that grant seekers wanted their offline electronic forms (PDFs and Word documents) to become available online. However, many grantmakers still use offline forms to collect applications. This is an area that still needs reform and progress.

Corporate grantmaking has also continued to lag in Australia despite becoming an important source of funds for NFPs between 2007 and 2010. It then fell away and is yet to recover to previous levels.

Richardson says grantmakers could make life easier for grant seekers by testing their processes and forms, to keep refining every year. “They should listen to and respect the knowledge of their grantees, who are usually the experts in their field.”

This article originally appeared in Third Sector’s Digital Magazine.