“We assume that they feed everything to a giant fiery furnace.”
This was the best guess of a frustrated nonprofit executive in the first round of Project Streamline research when I asked what foundations did with the reports he wrote for them. Over the years, I’ve heard similar sentiments from other nonprofit staff…
- “Final reports are the worst. They are often too detailed relative to the project or ask for information that is not relevant to our organization.”
- “When the grant award is so very small (>$10k) and is for general operating, it seems silly to have to report where we allocated the money.”
- “The most annoying practice is when a grantmaker requests a formal report when we aren’t even far enough into the project to have significant outcomes.”
So, let’s talk about reporting requirements.
Almost every grantmaker requires reports from grantees. Grantmakers hold themselves accountable for following an ethical process for distributing funds to eligible organizations and monitoring those grants, and they hold grantees accountable for having done what they said they’d do with the funds.
But what else are the reports for? When I ask grantmakers, “Why do you require reports?” they generally have answers. They tell me that reports are “important for accountability” or “reports are our mechanism for learning.” But when I ask the question differently — “What do you do with the reports that you receive?” — I often get sheepish grins in response. As one grantmaker told me, “In theory, I’d be using them to know more about our grantmaking effectiveness. But in reality, I don’t have any time to sit down and be thoughtful about the reports. That pile just sits there making me feel guilty.”
To alleviate the guilt and to make reporting more sensible for all involved, consider these four basic guidelines:
Guideline 1: Achieve Internal Clarity
Everything that a funder requires needs a clear and articulated purpose, and reporting is no exception. It’s imperative to first get specific about how you’ll use reports. Reports that are primarily for accountability will have different questions than reports that provide information that you’ll aggregate to evaluate your portfolio. And reports that help identify capacity issues in grantees will ask different questions than reports that highlight success stories to share with board members.
The framework below offers a set of reporting purposes for consideration. The pyramid shape reflects how common the reporting purposes seem to be — it’s not a progression denoting importance. In the spirit of the statistician George Box, who purportedly said “all models are wrong, but some are useful,” this framework is yours to question and improve. Which of these questions will you answer through reports? Which questions might be answered via other mechanisms, like external evaluations, periodic surveys, or interviews? Try to resist collecting additional information because you might someday decide you need it.
Michelle Greanias, executive director of Grants Managers Network (GMN), recommends a multi-pronged approach when reports are being used for dual purposes, such as accountability monitoring and something else. She says, “Have the grants management team review first —they are the ones generally getting the reports first anyway — and match requirements to results. That can be done quickly and is very straightforward. The GM can then quickly communicate back to the grantee that the terms of the grant are met and the grant is closed (and the grantee knows their report was used). Then, program staff can dig into the report for other purposes — which generally takes longer and I suspect is why reports get stuck ‘on the shelf.’”
Guideline 2: Create a Smart Structure
Once the purpose of your reporting is clear, think about how you get the best possible information. Funders complain that reports are full of fluff that obfuscates the important information. Think beyond the narrative! One funder realized that all they really wanted to know at the midpoint of the grant was whether or not the project was on track, and whether there had been any changes that they should know about. They started sending an email with these simple questions instead of requiring a mid-year report, and found that they received more useful information due to the informal format. A phone call could serve the same purpose.
The trick to getting the right information is asking the right questions — and the right questions depend on what you want to know. The right question might be, “What went well?” It might be, “What critical lessons did you learn that would help other organizations doing similar work?” Or it might be, “How could our foundation have better supported your work?” The answers to good, well-written questions will be useable information. Test your questions with grantees before launching them in full to learn whether they make sense and will yield the information you seek.
Finally, smart structure means getting the reports at the right times so that they can be used for their designated purposes. For example, if final reports come in 30-90 days after the end of the grant, they are probably arriving after grantmaking decisions have already been made and can’t be used to learn or influence the next round of grantmaking. One funder described their use of a midterm electronic survey of grantees in lieu of a final report so that they can have key information before they issue the next round of awards. Many funders have combined final reports with requests for renewal funding to reduce the burden on all concerned.
Guideline 3: Talk about What You Learn
If a report falls in an inbox and no one ever talks about it, did it really make a sound? Past research from Project Streamline and others has noted that only about half of funders said they used reports for internal decision-making purposes, and only 27% used them to share information with the rest of the field. It seems irresponsible to require a report and then do nothing but check off a box with it. For one thing, these reports take time to create. According to CEP’s Working Well With Grantees guide, half of nonprofits surveyed had spent more than 15 hours on reporting requirements.
Just for starters, consider having these conversations:
- Talk with the grantee to ask questions, make connections, and offer additional ideas and support.
- Share with your foundation’s staff and board for learning and engagement.
- Discuss with other funders who are invested in similar issues or operate in the same region.
- Share with the field — help others learn from the stories of individual grants, the lessons from groups of grants, and the aggregate findings from your portfolio.
Guideline 4: Remember the Point
Because they are not (generally) a legal requirement, funders have an opportunity to think deliberately about why they ask for reports and how they use them. Ask yourself: why are we requiring this report? One of the most dispiriting things I hear from funders is some variation of, “The report is the price nonprofits pay for getting our money.” But no. The report is not the arm and leg that a grantee owes you for having received a grant. The grant was an investment you made in the mission-based work. The report is one (just one!) of the ways you can determine whether that work was done well and what impact it had. Project Streamline recommends that reports be annual, unless there’s reason for concern or unless you’re using brief reports as a way to check in and provide additional support.
Sometimes funders tell me that their long or frequent reporting requirements are helpful to grantees as meaningful opportunities for reflection. This is possible, but likely not generalizable. As one nonprofit leader commented, “I really think the meaningful application and reporting process is an objective of funders, not nonprofits. The process is a means to an end for us, and there’s little that is going to make that more meaningful then just having time and money to focus on the work that drives impact.”
If you’re in the early stages of developing your reporting requirements, you have the luxury of thinking this through from scratch. But chances are that you’ve got a reporting process already and it’s the way it is because it’s always been that way. Like all streamlining, revising reporting requirements means a commitment to asking important questions:
- Why do we require this? Who will use this information and what will they use it for?
- Do we need it from everyone all the time? Or just from some organizations some of the time? How do we decide?
- How timely is the information we are getting for its intended use?
- What are other ways we can get information, beyond the standard narrative report?
- Have we communicated why we require this information?
With these questions at the tip of your tongue and the four guidelines in hand, you’ll be ready to make the most from your reporting requirements. And the fiery furnace? Without its fuel of unread reports, it will be reduced to a cold pile of ash.
Jessica Bearman is principal of Bearman Consulting, a long-time Project Streamline gadfly, and consultant to GMN. You can find her on Twitter @jbearwoman.