If your foundation strives to make a difference through grants and giving, can you confidently say you have a robust grantmaking strategy?
Your grantmaking strategy is your mission-driven plan that you will refer to for guidance when implementing and reviewing your grant-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.
Build your grantmaking strategy and empower your team with the help of this guide:
Revisit your mission
As a grantmaker, start building your strategy by revisiting why your organization was established, why your mission is impactful, and why you matter.
How will I fund my mission?
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 a combination of both.
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 into particular community needs your foundation will address.
Responsive grantmaking is directly influenced by community needs 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 the overwhelming needs and established organizations broadening their focus.
Many funders begin with responsive giving and move to strategic philanthropy over time.
Manage your budget
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
As a best practice, start the budgeting process at least three months before the end of your fiscal year.
You need this time considering that budget processes take some time when done right. 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.
Consider your overhead expenses too
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 allot funds for your staff. Technology, contract services, and supplies are some examples of overhead expenses you will incur.
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?
Keep track of your budget and finances
Your final budget should be sustainable, mission-aligned, and approved by all your stakeholders.
Remember to track the state of your finances against your budget on a regular basis.
Define 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.
Clarifying who you serve will allow you to define which nonprofits are–and aren’t–eligible for your foundation’s grant.
- Will you award grants only to nonprofits and grantees from a specific group or region?
- Will you accept unsolicited proposals?
Built-in eligibility screening tools automatically weed out applicants who don’t qualify for your grant, saving everyone time.
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:
- Send an email newsletter or announcement to your network
- Include a unique page on your website dedicated to your grants
- Hold and record information sessions for your grant program
- Use a social media strategy with targeted marketing and hashtags
Who are your decision-makers?
Consider how you’ll select final grant recipients. You’ll want stakeholders, board members, your administrative staff, and external reviewers involved in the process.
Using 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.
Use mobile-friendly online forms to eliminate paperwork and snail-mail. Provide clear, contextual instructions. Keep it clear and concise by only asking for the information you need.
Designed with ease of use and convenience in mind, our centralized, mobile-friendly application system provides your applicant an engaging experience with full visibility, a rich text editor tool, and the ability to upload supporting documents on the go.
An equitable 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.
Payouts and Reporting
When you’ve selected your grantees, notify them right away and let them know when funds will be available. 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.
Share your strategy
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 a compelling motivation.
Acquire knowledge and adjust
Your grantmaking strategy shouldn’t be confining. Learn to conform and adjust to inevitable changes and factors that may directly affect how you execute your grantmaking strategy.
Solicit feedback 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.
Revisit your strategy and change your plan of action as needed
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 evaluation could lead you to make changes mid-process.
Get an overview of your impact, gain perspective, and assess potential areas for growth but don’t forget to celebrate your successes, even as you look into areas for improvement
Make it work for your foundation
Building a 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 your foundation evolve, every step along the way is key to your success.
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