The Grantmaking Process is Evolving: Here’s How Technology is Amplifying Philanthropy

09/25/2019

Grantmaking is taking its step into the digital future.

From the pre-award to post-award phases, grantmakers are thinking strategically and getting out in front of challenges using new technology available to them. Grant seekers are demanding more from their funders at the same time as funders are turning up the heat when it comes to expectations around data and verifiable impact.

While the tools are changing, the goals are very much the same.

Grantmakers want to make applying easy in order to respect grantees’ time. They want transparent, multi-step processes that are simple yet effective. And they want seamless communication between stakeholders in the process and the ability to leverage data to improve funds.

As they embrace new approaches to solving problems, grantmakers are increasingly collaborating with grantees as full-fledged partners. Overall, grantmakers want to go beyond the grant proposal to connect more deeply with the organizations they support in pursuit of impact.

Grant seekers are increasingly looking for new ways to expand their impact beyond traditional funding and operational models. Social impact organizations are building for-profit arms, launching their own tech tools, and getting creative about how they market their work to broader and newer audiences.

Technology is accelerating these trends and others as the entire grantmaking landscape shifts. Here’s a bit more about how this is happening in philanthropy.

How Technology is Changing Grantmaking

How Technology is Changing Grantmaking

Tech is changing the nature of the grantmaking community itself.

In many ways, the process is being overhauled, streamlined, and transformed–at the same time. What’s perhaps most fascinating, though, is that it’s not just tech for tech’s sake. The deployment of technology is also having a marked effect on giving and impact. Twenty-seven percent of donors report that technology makes it easier for them to support important causes.

While the nonprofit sector has not always been considered the most aggressive in terms of adopting new technology, in large part due to constrained budgets, the consistent march of progress has carried grantmaking into the modern era with many new advances.

Let’s look at some of the key ways in which technology is pushing grantmakers into the future.

Data-Driven Tools Accelerate Learning and Impact

A major change for grantmakers is that they now realize the best way to run an internally effective grant management process is to evaluate external data and share their resulting data publicly. This allows data-wise grantmakers to make changes to funding programs on-the-go while optimizing their grant application processes based on these learnings.

Peers (grantmakers and grantees) are learning from each other like never before as the tools for connection and collaboration are expanding and improving. Developing a new channel for efficiently documenting insights to be shared in real-time (or asynchronously) with colleagues is now a simple and regular task.

In a 2018 study, nearly half of NPOs reported adopting a data-driven, “lean” approach. This model is predicated on testing hypotheses and capturing acute data points to measure the success of that action.

These advancements in communication have served to enhance the depth of the grantmaking profession as a whole. The grantmaking scene is now less about exclusive networks and much more focused on open-source learning and sharing of ideas to drive impact. That’s a very good thing for grantmakers and grantees alike.

Digital transformation has also brought new reams of data to the table. More and more, tech tools are allowing for greater personalization and synthesis of data to help grantmakers improve their work. Different teams can view the data through various lenses that link to their unique team-level goals while staying connected to the overall mission.

Technology Eases Administrative Burdens & Elevates Strategy

When it comes to technology, people expect it to make their lives easier.

In philanthropy, tech has automated tedious and repeatable tasks that give staff more time to focus on deeper work that requires significant analysis. When the efficiency of specific high-volume activities is improved, it opens up space for more meaningful work for grantmaking teams.

Internal communication in the grantmaking process has also shifted as a result of tech tools now available to grantmakers. Modern grant management software allows grantmakers to move grant applications along by notifying key stakeholders at various points of the process and giving them a clear picture of where the grant application is at any given moment.

The proliferation of tools like Submittable’s collaborative grant application review platform has made it possible for foundations to scale their impact through more efficient, effective, and strategic focus during the grant review process.

Ball State University’s grant program, for instance, was able to cut their administrative time by 10%, leaving more time for shaping the program and refining the core mission.

With Power Comes Accessibility

Finally, technology can often make things more accessible to a greater number of people. Tools like cloud-based computing and connected devices have shifted grant management into a new era. No longer are grants administration tools bogged down behind the grantmakers’ walls.

In 2017, the MacArthur Foundation teamed up with Foundation Center to launch Solutions Bank, an open repository of nearly 2,000 grant applications submitted as part of the 100&Change funding competition.

This transparent system provides accessibility and accountability for both sides of the grant funding process.

Transparency is not just a buzzword but a key practice among grantmakers who now freely share information and insights among their grantees, with peers in the field, and with the broader public. This is done all in pursuit of a greater impact alongside communities, which you just can’t be mad at.

From communication improvements and knowledge management tools to streamline grants management software and automated workflows, technology has made its mark on the grantmaking space in recent years.

The savvy grantmaker is riding that wave to better, more impactful giving.

With Power Comes Accessibility

Effective Grantmakers Use Technology to Improve How They Make Change

It’s about data and workflows.

At the highest level for grantmakers, deftly deploying these twin concepts with the right tech tools will allow for a strategic approach to improving grants management processes.

At the outset, smart grantmakers should run a multi-phase application process that fluidly weeds out applicants that aren’t a great fit for funding. The application process itself should be simple and part of a larger, smooth workflow.

Don’t be afraid to invest in the right grant management software to ensure this is the case. By streamlining each step along the way and automating in the right places, a strong tool for managing, reviewing, and responding to grant applications would make a big difference to your process.

When it comes to data, grantmakers embracing digital transformation will set up methods to assess performance and results at every step in the grantmaking process. The focus should be on outcomes as well as oversight of grant-funded programs.

This helps to increase buy-in among grantmaking teams and grantees on the front end, while also managing risk on the back end.

Continual discussions that are data-driven will serve to improve communication and collaboration with grantees. That’s where you want to be—not knocking on your grantee’s door once or twice per year begging for a grant report.

While setting up such fluid and efficient data-informed workflows isn’t easy, it is increasingly necessary in our digital world. The grantmakers that employ the data in smart workflows to improve their funds will take full advantage of the opportunities out there to lead the sector when it comes to maximizing impact.

What’s Next for Tech-Infused Philanthropy

The philanthropic sector certainly isn’t immune to the march of technology.

As grantmaking becomes more networked and participatory, we’ll see the technology to support grants that span multiple funders, organizations, and causes. If the world is becoming more intersectional in terms of how it solves problems, expect grantmaking to follow suit (and technology will be right there with it).

The harder lines between movements, direct service organizations, and institutional funders are vanishing. Just as the Internet of Things is linking all of the connected devices in our lives (and infusing artificial intelligence to learn as we go), so will the world of grantmaking strive for greater connectivity.

The bottom line for grantmakers: Lining up the best-in-class grant management tools to stay ahead of the curve will be critical to the future success of their grantmaking.

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Paul Perry
Paul Perry

Paul Perry is a writer and former educator with significant experience in nonprofit management. He has a soft spot for grant-seekers striving to make the world a better, more just place.