Grant Reporting: The Current State of Practice - PEAK Insight JournalPEAK Insight Journal
Grant Reporting: The Current State of Practice

Grant Reporting: The Current State of Practice

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Grant reports are a fact of life for funders and nonprofits. Generally structured as written narratives and detailed financial information, they serve variously as an accountability mechanism, a trigger for the release of the next round of funding, a way to document past activity, and a source of data and stories. At their best, grant reports are a platform for building relationships and making decisions, whether about an individual grantee or about overall grantmaking strategy. While there is a nearly universal belief that grant reports are necessary, there is far less agreement about frequency and format, required elements, and uses (never mind, usefulness!).

Project Streamline’s first broad survey of application and reporting practices, Drowning in Paperwork, Distracted from Purpose, published ten years ago, surfaced the following observations about grant reports:

  • Most reports were submitted in hard copy.
  • There was an enormous variability in reporting requirements, including number of reports required, report format, report requirements, and reporting timelines.
  • Grantseekers complained that reporting, like the application process, was often not “right-sized” to the size, type, and risk profile of the grant.
  • Grantseekers felt that frequent reporting schedules showed a lack of trust from their funders.
  • Reports were used mainly for compliance purposes. Only 27 percent of funders indicated that they shared report information with others in the field, and few followed up regularly with grantees. Indeed, more than 20 percent of grantee comments on the Center for Effective Philanthropy’s Grantee Perception Survey emphasized a desire to receive a response to their reports.

This article describes the current state of grant reporting, based on more than 300 survey responses from grantmaking organizations of all types and sizes. Starting with what we know about the current reporting will help to ground upcoming articles in real-life experience, facts, and data.  Future articles will offer some good reasons to re-think reporting, while also highlighting interesting “bright spots” of grantmakers making better use of reporting. An additional series of articles will delve into the field’s aspirations for reporting. Finally, this journal issue will conclude with guidelines for streamlined reporting.

But first, some facts.

Survey Sample

Over three weeks in September 2017, PEAK Grantmaking, along with several colleague organizations, distributed and publicized an online survey to solicit grantmakers’ experiences with and aspirations for grant reporting. The findings that follow are drawn from 304 completed surveys from representatives from grantmaking organizations across the country. Multiple submissions were received from 24 organizations, resulting in survey responses from a total of 280 unique organizations.[1]

About half of the respondents described themselves as grants management professionals. Another 25 percent were program officers or senior program staff (Director, VP, or the like). The final 25 percent included CEO/EDs, directors of finance or operations, communications staff, and administrative assistants or equivalent. Given this composition, it’s not surprising that most participants (84%) indicated responsibility for ensuring compliance. More than 70 percent said they play a role in designing reports.  While 64 percent review grants for substantive insight and impact, a smaller set of respondents (50% or fewer) indicated responsibility for using  reports for learning, stories, and data; for evaluating grant success; or for follow-up conversations with grantees.

Grantmakers responding to the survey varied in size and type, but most did come from private independent or family foundations. The majority (60%+) distribute more than $5 million in grants annually; About a third give more than $25 million in grants each year. Staff-wise, responses again represented the variety in the field, from funders with a single staff person to funders with more than 76 staff. About half of the responses indicated fewer than 10 staff.

Highlights – Current Practice

First and foremost, this survey sought some basic facts about the state of reporting, circa 2017.  For example:  how – and how often – do funders collect reports? What type of information is required?  How is this information used?

Current practices do vary, in ways that may seem arbitrary (especially to grantees with multiple funders). Nevertheless, a few consistent policies and practices did emerge:

  1. Online systems for reporting are finally having their moment. Although online reporting has lagged behind online application processes, 64 percent of respondents use an online system to collect and review reports. Another 30 percent accept reports by email. A very small number (only 2% of the total surveyed) still require hard copies, with a few asking for both emailed and hard-copy reports. Many survey respondents expressed a desire to move to an online system or to improve their online system to allow for online reporting and to manage report data.
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  3. The “basics” are often the same. While certain information is nearly always required, most grantmakers require reports in their own format and will not accept a common report submitted to multiple funders. Almost all funders told us they ask grantees for a description of accomplishments, financial reports, and any challenges and “lessons.”  Most (about 75%) collect progress toward metrics or objectives identified in the original application or grant agreement, as well as any relevant changes to proposed work.It is much less common for funders to ask grantees for feedback about the funder or the funding process. Also rare are requests for information about support that would assist grantees going forward. Other items listed as requirements by some funders included: audited financials, strategic or business plans, evaluation reports or data, press, stories, and information about other funding sources. Only 8 percent of funders leave it up to the grantee to decide what to report.

  4. Given so much overlap in what funders request (even if the format and specifics may differ), we wondered whether funders would accept or promote the idea of receiving a report written for another funder or to multiple funders investing in a single project.  About a third of the respondents do accept a common report; another third indicated a willingness to consider doing so. As one funder put it:  “We do accept reports common to multiple funders investing in the same organization or program because we understand a lot of times funds can be used systemically for an overarching need, and we don’t want our organizations to feel the pressure and use extra staff and resources to produce additional materials for us.

  5. Different grants…same report format. Although grants can differ subtly or radically within a funder’s portfolio, many respondents reported using a single format and set of requirements regardless of the size or type of grant. Nearly half told us that they have no variation in reporting from grant to grant. When reporting requirements do vary, type of grant, program, focus, or department triggered the variation. Only a few funders in this sample (about 13%) said that they sometimes or always customize reporting requirements for each and every grantee.
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  7. ‘Narrative reports + financials’ are most common. Most (77%) funders require a narrative report based on a standard set of questions. A smaller number allow a free form report; still fewer present grantees with customized questions specific to each grantee.  Almost all (96%) require financial reports. Of that group, more than half provide grantees with a funder-designed template. About 42 percent allow financial information to be reported in the grantee’s own format.A few respondents are moving away from the traditional ‘narrative reports + financials.’ These “outside the box” strategies remain the exception, but include having conversations by phone (16%) or in person (13%), accepting a common report (13%), allowing reports written for another funder (11%), and asking for a presentation or video report (6%).
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  9. Reporting frequency tends to be annual and/or end of grant term, but many funders ask for much more. Some funders still require bi-annual and even quarterly reporting. A small number ask for monthly financial updates. The greatest variation in reporting frequency relates to something called variances.  Most funders ask for written reports if a change occurs in the proposed activity or budget or a “variance.”  What triggers a variance report?  These requirements are all over the map, based on each funder’s own policy or tradition.  We found no standard practice or philosophy, and very little consistency across the survey responses.About 30 percent require a report when changes occur in staff or leadership, or program activities. About 41 percent  of respondents require a report when a change is made to the budget, but within this 41 percent , what constitutes a reportable variance varies dramatically.  Although in a few instances a change of any amount triggers some funders to demand a report; more commonly, a change between 5-20 percent in a budget line item must be reported.
  10.  
    Project Streamline has long advocated combining final reports with reapplications. About a quarter of survey respondents allow grantees to combine their final report with a reapplication for funds, but about half (47%) do not, either because they don’t allow for renewals or because they feel strongly about keeping the closing of one grant and opening of the next distinct. Another 29 percent described the process as “complicated,” and explained that they occasionally or sometimes allow for a combined report/application, or expedite reapplication in some other manner.

  11. Due? Says Who? Due dates for reports tend to be designated by the grantmaker (for 65% of respondents) and are negotiated with the grantee only 10 percent of the time. About 25 percent of respondents selected “other” and explained reporting deadlines in the comment section. Comments indicated that funders are flexible in both setting and adjusting deadlines.  Many allow grantees an extension upon request or set deadlines that reflect “the cadence of the work.”
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  13. How do grantees experience reporting? Good question. Seeking feedback on practices has become more common—thanks in part to the Center for Effective Philanthropy’s Grantee Perception Survey (and we hope also thanks to Project Streamline’s occasional pestering). Still, according to this survey, many funders don’t have a good way to get candid feedback – or any feedback– on reporting practice. As the chart below shows, nearly 30 percent don’t seek feedback at all. Nearly a third do ask grantees for feedback, but do so in conversation or as part of the grant report – techniques that may not garner candid and critical feedback.Similarly, three-fourths of funders surveyed do not know how much time it takes for a grantee to comply with reporting requirements. Of the quarter or so that said they did know, about 12 percent have surveyed grantees to find out and 14 percent described knowing “based on our own estimates.”Internally, among grantmaking staff, the time dedicated to reporting also is not well-understood. The survey asked how much time per month was spent tracking down reports and answering questions. Although many gamely tried to answer, comments suggest that most respondents had not or did not know exactly how to calculate time spent on reporting: “This is a difficult question to answer; there are ten or more staff members that help or interact with grantees with reporting.  It is WAY more than 20 hours per month.”
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  15. What’s the use? Reports are used for accountability, documentation, and individual PO learning – not field building. The survey asked how frequently reports were used for a range of purposes. The most frequent uses cited were accountability, documentation, and program officer learning. Least common uses included highlighting grantee work publicly, whole organizational learning, board learning, and building the field through publications. When describing the purpose of reporting in their own words, respondents were most likely to describe using reports to monitor an individual grant (45% of comments). Building relationships with grantees, triggering the release of a payment, making decisions about continuing funding, and understanding the state of an issue or region were also cited as regular uses of reporting from more than half of those responding. Comments suggested an overall lack of consistency when it comes to how reports are used, even within a single grantmaking organization: “…. in practice [reports] inform or are part of renewal decisions OR they are just a formality. Some mix of useful and useless.”The survey urged respondents to comment on how information from grant reports was shared. The most common response (about 38% of the 253 responses) was that “summaries of reports are shared with the board” either verbally or in writing.  Information from reports was also made available or accessible in grantee databases for relevant staff members. Fewer than half the comments described making information from reports available externally. This does appear on the wish list of many respondents: “Right now we don’t! This is one of the main reasons why my knowledge and learning position was created – to develop an infrastructure for using grantee information and learning to inform foundation decision-making and future strategies.”
  16. What’s the purpose? Many funders designed reporting requirements to help them (and grantees) to learn. Given the actual uses detailed above, it is interesting to note that 63 percent of survey respondents told us their reporting requirements and guidelines were developed “based on what we want to learn about our grantmaking.” A sizable number (28%) said reporting requirements emerged from and aligned with a strategic plan. Over 20 percent designed reporting to be most useful to grantees. Yet, this survey found most respondents falling short of these learning, strategy, and grantee objectives.  Few respondents have asked grantees about the usefulness (or time costs) of reporting.  Most indicated that reporting serves as a way to hold grantees accountable for fulfilling grant terms, especially financial terms, and to file a record of what transpired for organizational memory and individual program officer tracking.
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  18. Currently, reporting is most often used to assess an individual grant. Nearly three-fourths of those surveyed said they use reports to evaluate an individual grantee or grant – a percentage consistent with those who use reporting to “hold grantees accountable to grant terms.”  A fairly good chunk (59%) said reporting informs evaluation of an initiative, program, or portfolio. Many in that group, however, rely upon external consultants to synthesize and integrate individual reports into a larger evaluation effort.  Nearly 25 percent of respondents using reports to evaluate all grantmaking, and an eager three-quarters of respondents appear interested in learning how they do so. Numerous comments described an aspiration to connect grant reporting to efforts to capture overall impact. These comments reflect a desire to move from using reports that assess an individual grant to using reporting to advance whole organizational learning, inform strategy, and increase impact.

Discussion

The results of this survey confirm that grant reports are mainly used to monitor and hold grantees accountable, and to document the grant “for the files.” Once received, reports may be read and summarized for the board before they are stashed away, but they rarely shape program strategy, highlight grantee work publicly, inform whole foundation learning, or build the field (or advance the scope and scale of an issue) through publications or other public discussion. Reporting is consistent in its basic format: most grantmakers require narrative, written reports (now usually via online system or sent via email) and financial information, while far fewer seem to be experimenting with other ways to document the progress or success of a grant.

Perhaps not surprising to either grantmakers or grantseekers, reporting requirements – like application requirements – can be idiosyncratic and inconsistent across funders or even within a single funder.  Reports may collect similar information (accomplishments, financials, challenges, lessons learned), but grantmakers tend to privilege their own particular sets of questions, word counts, metrics, deadlines, and variance policies. The frequency of reporting and the types of situations that trigger variance reporting are left up to each funder – and may or may not be tied to the size, type, or risk-profile of the grant.  In a second article, detailing survey findings, we will share the changes survey respondents would most like to see in reporting.  Spoiler alert:  you said you wanted to use reports more strategically, more intentionally, and with a greater emphasis on whole organization learning.

Before we get to “what could be”… the next few articles in this issue of PEAK Insight Journal will delve more deeply into the current reality of grant reporting.  With expert insight and candor, guest writers will build upon the “real-life” experience described in more than 300 survey submissions by focusing on how financial reporting works (or doesn’t), how reporting affects grantees, and how organizational limitations influence the usefulness of reporting.  We hope to paint a vibrant picture of ‘what is’ so together, we can prepare (and get collectively energized!) to REVISIT REPORTING in ways that increase grantmaking effectiveness and impact.  Stay tuned!

 

 

[1] Because not all respondents provided their organization names, it’s possible that there are additional duplicate organizations in the mix

Author

4 comments

  • I can’t wait to read the follow up articles!
    Over the years, we’ve streamlined reports to just info that we need and use, and we’ve integrated them into our renewal application process. And according to our recent CEP results, grantees mostly find the process helpful.
    But it still seems like a bit of a burden, and internally we’re not great at disseminating any learning from reports back into the field.
    I’d love to know what other foundations are doing differently from the traditional narrative, written report.

    Reply
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  • Perhaps in one of your follow-up studies you might look at a wide spread financial problem directly associated with reporting to grants makers. All grants represent an exchange. One party offers money. The other party offers information. The grant maker supplies funds and the applicants provide information about their intended actions and their solvency as evidence of their worthiness to receive funds. As your study correctly points out, little of the information obtained by grants makers is shared with the field or used for any other purpose than accountability or compliance.

    However, there is an even more fundamental problem in the request for financial reporting. The problem with fiscal reporting across the field is the use of an annualized summary budget format – those familiar one-line summaries of a year’s worth of financial activities with a single bottom line. While helpful in business to guage overall performance (in the red or in the black being the starting point) these budgets fail to provide much more than an indication of solvency and can be quite misleading.

    In fact, it is surprisingly difficult to accurately assess the fiscal position of nonprofit organizations using this type of budget form. For example, the creative use of terminology by institutions can make tracking difficult since money is defined or constrained in a variety of ways. Quasi-endowments, comingled funds, non-comingled funds, board designated funds, grant designated funds, restricted verses unrestricted funds, all can create a cloud of confusion in nonprofit financial reports.

    On the other hand, cash flow budgets completely resolve the definitional problem by recording the transactional nature of the movement of money into and out of the institutional, regardless of labels. Equally important cash flow budgets report on cash in and cash out, in relation to time. It is the failure to link money with time that often hampers grants makers interested in any fiscal information other than institutional size or solvency.

    In our book: Cash Flow Strategies: Innovation in Nonprofit Financial Management, published by Jossey-Bass in 2008, we discuss monitoring and reporting in considerable detail. Our bottom-line is simply that both nonprofit institutions and grants makers need to adopt cash flow budgeting and reporting as a superior tool in assessing the fiscal position of nonprofit organizations.

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