How to Enhance Grant Applications Through Trust-Based Philanthropy and Technology

Historically, nonprofits and their funders have endured a strained relationship caused by the power imbalance that occurs between those depending on charitable donations and those in charge of issuing donations. Unfortunately, this creates a funder-grantee relationship that seems more transactional and less collaborative toward supporting a cause.

As a result, nonprofits are often required to jump through myriad hoops to receive critical grant dollars. Examples of this may include nonprofits having to meet a funder’s preferred metrics, logic models, or adhere to their theory of change. In other cases, grants are awarded with detailed instructions, specifying how the funds should be allocated across programs, operations, and lead to measurable results.

On top of this, conventional grantmaking procedures can be cumbersome, involving numerous steps that demand nonprofits provide extensive documentation and proof of their reliability. Grantmakers seek to mitigate risk through extensive online forms, rigorous data collection, and demanding progress reports. This ultimately puts the power imbalance in the favor of funders and increases the burden on already resource-strapped organizations.

Employing Trust-Based Philanthropy

Fortunately, this strained relationship has an opportunity to evolve. After a global pandemic and numerous global disasters and conflicts required immediate distribution of grant and donation dollars, there was increased demand for quicker funds distribution without roadblocks. As a result, a modern trust-based philanthropy approach has gained traction among grantmakers, which outlines guidelines and principles aimed at rebalancing power between grantmakers and funders through stronger relationships, collaboration, and mutual accountability.

Software and data are vital components in helping funders adopt trust-based philanthropy and a more people-focused technique. While technology isn’t a magic bullet, it serves as a tool for funders to identify necessary changes to be made as they build a trust-based approach. This ultimately creates a host of benefits across funding processes, promoting transparency, streamlining application steps, and requiring grantors to have a deeper understanding of their grantees.

 A Beneficial Approach

 One of the key tenets of trust-based philanthropy is the principle of transparency. Transparency on the part of a grantor, for example, will provide a straightforward guide for applicants about what they do and do not fund. Grantors may also disclose current challenges or requirements upfront to make sure they aren’t wasting an applicant’s time. Gradually, this benefit can build on itself by streamlining administrative and business processes.

 One of the biggest benefits of a trust-based approach is what’s often referred to as “doing the homework,” or having grantors become more conscious of the people and causes to which they donate. Oftentimes, grantmakers rely on nonprofits to bear the workload of vetting and assessing prospective partners. A trust-based practice aims to balance this aspect of the relationship by reducing the workloads of nonprofits and making adequate use of both parties’ time. During this process, software can play a critical role in enabling funders to do their homework quicker and more efficiently and minimize the administrative burden on nonprofits.

Supplementing Trust-Based Philanthropy with Technology

As funders purposefully transition to trust-based and equitable funding approaches, the utilization of grant management software (GMS) can help simplify and streamline the funding process. For example, creating workflows for reviewing applications, developing progress reports, and reducing administrative work that would traditionally bottleneck processes becomes incredibly easy and efficient.

Beyond helping to identify and implement efficiencies, one of the most valuable aspects of GMS is its ability to capture data about the user experience. This capability enables organizations to pinpoint areas that might contribute to burdens on grantees, inequities within the process, and perceived or real power imbalances. For instance, certain segments of an application may demand an excessive amount of time or consistently remain incomplete. Exploring the reasons behind these patterns that emerge and finding ways to address them presents an opportunity to enhance the user experience and the overall grant application process.

Unlocking Potential

The goal of utilizing GMS is to intersect several trust-based grantmaking practices (transparency, streamlining, doing the homework) with an outcome that results in the ability to deliver funding to the people and organizations that need it most.

As grantmakers shift toward trust-based philanthropy, they will often start by taking a broad look at their reporting. This is one area where GMS can be very helpful. It can serve as a centralized home for grant forms, grantee reports, and essential information about an organization’s previous or current grants, funding, and impact. Regardless of form size, GMS can minimize the amount of data an applicant must provide, especially when that data already exists somewhere else. Other data can be incorporated directly from a nonprofit’s website as well as an IRS Form 990 or the IRS master file. Eliminating the work of data re-entry is a crucial step toward minimizing the administrative burden for grant-seekers.

Trust-based grantmakers may extend this concept by agreeing to accept applications and data that have already been produced for another funder or are otherwise not in their preferred format. In doing so, they allow applicants to submit data, forms, and applications in any format in which it already exists.

The shift toward a trust-based philanthropy process represents a valuable investment, whether it’s for those yet to start a program or funders that have been around for a long time. By fostering transparency in the relationship between grantors and grantees, this approach, when integrated with GMS, streamlines workflows and processes. It also enables grantmakers to engage more deeply with the recipients of their donations.

Author: Sam Caplan, Vice President of Social Impact, Submittable