Grantmaking Strategy: The Complete Guide

If your foundation’s mission includes making lasting change through grants and giving, grantmaking strategy is critical to your success.  

Grantmaking strategy is the mission-driven plan funders use to guide, execute, and evaluate giving programs. It includes the type of initiatives your grants will support, your desired outcomes, the extent of your investment (total and per award), and how you’ll execute your program. 

The following guide to grantmaking strategy will help your organization achieve the results you’re seeking and plan for progress as a team.

  1. Start with “why”
  2. Pick a funding approach
  3. Follow budgeting best practices
  4. Identify your beneficiaries
  5. Implement the right tools and processes
  6. Make your strategy known
  7. Learn and adjust

1. Start with “why”

According to philanthropy expert Kris Putnam-Walkerly, your strategy’s first guiding question should be “why”. Here are a few “why” questions to ask yourself:

  • Why was your foundation created?
  • Why is your mission distinct and urgent?
  • Why are you uniquely equipped to do what you do?

The vision and goals defined by these questions guide every strategic decision this article will cover. So know your “why” before moving on to your “how.” 

2. Pick a funding approach

All funders have their own approach—and that approach may even evolve from year to year. Determine if your organization’s approach will be responsive, strategic, or some blend of the two. 

Responsive grantmaking

Responsive grantmaking is directly influenced by community need and driven by the type of requests and imperatives your foundation receives. 

COVID-19 has offered a great example of responsive grantmaking in action, with new groups moving into philanthropy for the first time to address overwhelming need and established organizations broadening their focus. Responsive grantmaking is ideal for newer, less experienced funders and organizations that want to be nimble in their philanthropy. 

Many funders begin with responsive giving and move to strategic philanthropy over time. 

Strategic grantmaking

When your foundation and board undertake strategic grantmaking (also referred to as “proactive grantmaking”), your giving will be guided by a plan that comprehensively defines specific desired outcomes. 

Strategic philanthropy requires deep insights about the particular community need(s) your foundation will address. 

North Star Fund logo

North Star Fund’s 2020-2023 Strategic Plan exemplifies a strategic grantmaking plan. It defines a mission, vision, detailed key values, and strategic goals around strengthening grassroots and dismantling white supremacy.

But even organizations and grantmakers that focus on proactive strategies may still reserve a portion of their budget for responsive grantmaking. 

Ottumwa Regional Legacy Foundation logo

The Ottumwa Regional Legacy Foundation is a good example—the majority of their budget is allocated for strategic grants in five areas but they also offer community enrichment fund grants.

3. Follow budgeting best practices

Without a solid budget, you put your mission at risk. 

You could wind up shorting grantees, failing to meet impact outcomes, damaging your reputation, losing staff and partners, being audited, or even shuttering for good.

Give yourself enough time

Propel Nonprofits recommends starting the budgeting process at least three months before the end of your fiscal year.

That’s because the budget process takes some time when it’s done right. As they point out, in a thorough process, establishing a timeline, agreeing to goals and a budget approach, and assessing current finances all happen before you even start drafting a budget. 

Remember “other” expenses

Your budget’s first draft should include all expenses, projected income, and secured income, since you’ll need to anticipate remaining funds at the end of your award cycle, campaign, or fiscal year. 

Remember to budget for your personnel and OTPS (Other Than Personnel Services). These include things like technology, contract services, and supplies. 

Here’s a list from Philanthropy New York of position types to consider in your staffing budget:

  • Foundation board
  • Senior management
  • Finance
  • Programs
  • Communications
  • Administration/Human resources
  • Donor relationship
  • Research
  • Grants management

Of course, smaller foundations might have a single person handling several of these roles.

Get feedback

Get feedback from stakeholders, including your board. Do they believe your awards budget is sufficient to attain the outcomes you’re seeking? Are there expenditures you should cut or modify? Are there potential donors you didn’t include? What else did you miss?

Make it public

Sharing your budget on your website, in public-facing reports, and through social channels is a significant act of transparency. Emphasize that regular budget and funding review is a priority for your foundation. As the National Council on Nonprofits notes, your budget is a guide, not a fixed contract. 

Track your finances 

Your final budget should be sustainable, mission-aligned, and have buy-in from all stakeholders. 

But your thoughtfully-constructed budget isn’t useful unless you track the state of your finances against your budget on a regular basis.  

With grant management software like Submittable you can automatically track your grants and award payouts to make sure you’re not busting your budget.

Submittable product image for Funds feature
You can track the award and distribution of funding to applicants within the Submittable platform.

4. Identify your beneficiaries

With your objectives and budget in order, it’s time to decide who you’ll serve and how you’ll select your grantees. Think through the following three questions in detail:

Who will your foundation support?

Your foundation’s mission and approach will determine which populations you’re looking to fund. 

If, for example, your foundation focuses on mitigating the effects of climate change, you’ll need to understand who is most impacted, what their needs are, and who is already working to meet those needs. (Can you partner or support existing programs and nonprofits?) The more you know about the people affected by your target issue(s), the better.

Clarifying who you serve will allow you to define which nonprofits are–and aren’t–eligible for your foundation’s grant. 

Also consider: 

  • Will you award grants only to nonprofits and grantees from a specific group or region?
  • Will you accept unsolicited proposals? 

Submittable’s built-in eligibility screening tools automatically weed out applicants who don’t qualify for your grant, saving everyone time.

Submittable product image for eligibility screening
Submittable makes it easy to automatically check for 501 C-3 status eligibility with features like Charity Check.

How will you reach potential grantees?

A great funding opportunity can’t serve your community if they don’t know it exists. Here are a few ways to promote your grant to the right nonprofits and grantees:

  • Connect with those already serving the populations you want to reach
  • Send an email newsletter or announcement to your network
  • Include a unique page on your website dedicated to your grant(s)
  • Use a social media strategy with targeted marketing and hashtags
  • Hold and record information sessions for your grant program

Who will make decisions?

Consider how you’ll select final grant recipients. You’ll want stakeholders, board members, your administrative staff, and (perhaps) external reviewers involved in the process. 

The value of diversity, equity, and inclusion (DEI) has been well-established—as research by McKinsey & Company has repeatedly shown, organizations that put DEI into practice have better performance outcomes.

So populate your review team and board with people from a range of backgrounds who can offer unique perspectives.

Book Cover Banner: 5 Sources of Bias in Your Grant Application Review Process

You’ll also want to make sure that your selection committee, at least in some way, reflects the community you’re looking to serve. As philanthropy expert Jennifer Laszlo Mizrahi observes, “People who have experienced problems first-hand often know the solutions which are best able to create positive systems change and outcomes.” 

5. Implement the right tools and processes

Effective grant management for funders requires:

An applicant-friendly grant application

An online application designed for ease and accessibility sets a productive tone with applicants from the start. This is important because some of those applicants will become grantees in long-term relationships with you. 

These are the keys to creating an grant application form:

  • Use mobile-friendly online forms to eliminate paperwork and snail mail.
  • Provide clear, contextual instructions.
  • Only ask for the information you really need. 
Submittable product image for application with form logic
Submittable’s drag-and-drop form builder makes it simple to build a beautiful, branded application that’s customizable and easy on grantees. 

An organized system for communicating and collaborating

Email is great for many tasks, but using it to manage correspondence with applicants, staff members, and reviewers can get unruly. Especially when there are so many people to keep in the loop.

That’s why we designed Submittable to organize and manage all of your communications—and collaborative work like reviews—in one, centralized place that your whole team can access. 

So even teams with remote members can spend more time on important tasks and less time on chasing down emails and documents.

A fair and efficient review process 

Clearly define your evaluation criteria to help make your reviews both effective and equitable. Using a rubric or other rating scale can keep review scoring consistent, minimize bias, and help in case of a dispute. 

Consider how you’ll share the workload among reviewers and whether you’ll review in stages or rounds. Whenever possible, hide sensitive applicant information from reviewers to promote impartiality and focus their assessment process. 

Submittable product image of reviewer interface
Not all reviewers will need access to all information. In Submittable, you can set permission levels by role.

Reviewers will be more productive if they don’t have to battle technology to complete their assignments, communicate with team members, or come together for final meetings. Streamline the process for your team in advance with a system that keeps materials centralized. 

Low-burden payouts and reporting 

When you’ve selected your grantees, notify them right away and let them know when funds will be available. Submittable can help you distribute awarded funds with full-service funds distribution

Once your grantees have received funds, you’ll want to keep track of how your resources are being used. This is where grant reporting comes in. 

Make things easier on your busy nonprofits with your grant reporting requirements. Avoid asking for more than you really need. 

Want to put your grantmaking strategy to work?

Submittable simplifies even robust grant review processes to save you time.

6. Make your strategy known

According to research from Candid, transparency is lacking across the philanthropic sector. 

The lion’s share of foundations do not use their website to tell their story, externally share knowledge gained, or publish recent grants data online. 

So document your strategy and make it publicly available. 

Knowing more about your strategy will help prospective grantees, nonprofits, potential partners, and future advocates for your organization get to know you. The depth and breadth of your mission, vision, and execution plan can only serve to bolster your reputation and broaden your reach. 

Publicizing your strategy shows a commitment to transparency and follow-through. If your foundation has committed widely (and publicly) to a particular strategy, the pressure to make good on what you’ve pledged is compelling motivation. 

William and Flora Hewlett Foundation logo

Take the William and Flora Hewlett Foundation’s publicly-available Open Education Strategy: it clearly defines the indicators they use to measure the progress of their mission. 

7. Learn and adjust 

As nonprofit and philanthropy expert Cynthia M. Gibson puts it, “Strategy isn’t a box; it’s a membrane.” Ideally, like a membrane, your grantmaking strategy isn’t confining but permeable, informed by the changing conditions around you.

Check in and gather insights

Make a plan to regularly communicate with all parties connected to your grantmaking strategy. Not just your grantees and board—also staff, external reviewers, community partners, and any other stakeholders. Ask thoughtful questions that help you improve.

To make sure people feel safe speaking up, provide options for feedback, from in-person meetings to anonymous surveys. Keep good records of all feedback and use the data to inform decisions going forward.

Submittable product image of survey
Easily create, send, and analyze survey data from everyone involved in your process using Submittable. 

Actively reflect and shift course as needed

Build time into your strategy for regular, thorough reflection. This should include the insights and data you’ve collected from others, as well as your own rigorous assessment of what’s gone well and what could stand adjustment. 

This examination could lead you to make changes mid-process. For example, on the micro level, if you’ve been hearing from staff that grant applicants find your guidelines unclear or overly stringent, you may need to modify your application in the middle of an application call. 

On the macro level, in-depth reflection after an award cycle or at the end of the fiscal year is the best opportunity to get an overview of your impact, gain perspective, and assess potential areas for growth. (Just don’t forget to celebrate your successes, even as you dig into areas for improvement.) 

You can even consider sharing your insights publicly to help other grantmaking organizations learn and improve. 

Group Health Foundation logo

Group Health Foundation recently published a candid take on their new sponsorship grants program that includes lessons learned—”Our most important takeaway from our first year is that we need to support more convenings happening in places without deep philanthropic support, including towns, suburban and rural areas, and mid-sized cities.”

Put grantmaking strategy to work for you

Grantmaking strategy is no casual undertaking. From the high-level vision and goals that lay your foundation’s groundwork to the active reflection that helps your strategy (and organization) evolve, every step along the way is key to your success. 

Take the time to plan appropriately—but don’t take too long. As Kris Putnam-Walkerly observes about 2020, “Crisis has made it abundantly apparent that we can’t afford to spend a year on strategic planning because by the time you’ve created your plan, the world will have changed.” She advises that organizations focus on building their strategy with urgency, acknowledging that adjustments will be necessary along the way. 

Submittable can help you speed up, streamline, and consistently adapt your grantmaking execution. Find out more today with a free demo of our grant management software. 

Rachel Mindell

Rachel Mindell is a Special Projects Editor at Submittable. She also writes and teaches poetry. Connect with her on LinkedIn.