Funding is complex by its very nature, one aspect of it being the application, implementation, and reporting processes. A degree of complexity is always going to be present in order to ensure funds are having the intended impact – but balancing these two factors can be a tricky tightrope to walk.

The more complex the grant requirements and reporting procedures, the more burden placed on the grantees seeking to deliver those results. However, over-simplified processes can make it difficult to know whether funds are being used correctly. (It’s not just grantees that are held back by complexity either – administrators will also have their work cut out for them.)

In this article, we will explore some considerations and methods for achieving the optimal balance between complexity and impact in grant making.

Complexity in Grant Making

No matter the project, grantees are working with complex systems – and that means unpredictability, with many uncontrollable variables influencing the impact of a grant. As a result, many funders have revisited their approach towards measuring impact, seeking to introduce more flexibility.

According to Complexity Theory, we cannot accurately attribute impact to the actions of entities that are operating within complex systems. Some sources have suggested that, instead of taking a black and white approach to measuring impact, the focus should be on deciding which organisations can be trusted with one’s resources. Thus, if impact is not as expected, it’s important to learn why things did not work out – and not only focus on the numbers.

How to measure impact is another topic entirely – however, this points to the fact that funding is complex enough by its very nature; we don’t need to make its supporting processes more complex than they need to be.

Complex grant requirements and reporting procedures can be time-consuming, confusing, and frustrating, diverting grantees’ attention from their core activities. This can lead to reduced motivation and engagement, lower-quality output, and a higher risk of non-compliance.

Underestimating Administrative Complexity

Another pitfall of the complexity in grant management is the potential for misalignment between the grantor’s goals and the grantees’ capabilities.

A 2020 report by Building Better Opportunities revealed that the capacity required to fulfil administrative requirements for projects is often underestimated.

The report suggests bureaucracy should be streamlined wherever possible, and that inevitable requirements need to be addressed efficiently to avoid taking attention away from delivering results. In some cases, it’s necessary to introduce dedicated compliance roles to ensure awardees are meeting the reporting requirements.

How Do Funders Overcomplicate the Grant Management Process?

Grantors can contribute to making the grant management process overly complex in several ways. Of course, not all grantors engage in these practices – but here are some common ones:

• Lengthy and complex application procedures: Grantors may have elaborate and time-consuming application processes that require extensive documentation, detailed budgets, and multiple rounds of review. This complexity can deter potential applicants or create significant administrative burdens on organisations that do apply.
• Extensive reporting requirements: This refers to stringent reporting obligations that request detailed financial statements, progress reports, and impact assessments. While accountability is crucial, excessive reporting demands can consume valuable time and resources, diverting attention from the actual implementation of the project.
• Complex compliance and auditing processes: This may involve meticulous record-keeping, periodic audits, and site visits. As with reporting, this is important for accountability but can be time-consuming and burdensome.
• Frequent policy changes: Grantors may modify their funding guidelines, priorities, or reporting requirements without adequate notice, leaving grantees to adapt their plans and processes accordingly. This lack of stability and predictability can disrupt ongoing projects and lead to inaccuracies as grantees do not have enough time to prepare.
• Limited flexibility in fund utilisation: Rigid restrictions on how funds can be used limit grantees’ ability to adapt to changing circumstances or address emerging needs. This lack of flexibility can hinder innovation and hinder effective project implementation, especially during a recession.
• Insufficient communication and support: Providing inadequate guidance or support to grantees during throughout the process is sure to make things difficult. Lack of clear communication channels, delayed responses to inquiries, or inadequate technical assistance can impede grantees’ ability to navigate the process.
• Using outdated systems: Relying on paper-based systems or on-premise software slows things down considerably. Instead, funders should look to use cloud based grant management systems.

The extent to which some of these attributes can be simplified depends on regulation – but even those parts of the process that are inevitable can improve. Let’s look at some ways to improve grant management on the whole.

How to Manage Complexity in Grant Management

Below are several suggestions for creating a positive experience for grant seekers and awardees.

Understand Grantee Capacity

As the aforementioned report states, grantors often underestimate grantees’ capacity to fulfil administrative requirements. One way around this is to make sure thorough information is obtained about grantees’ organisational structures, capabilities, and resources in advance.

With this information, grantees can determine the appropriate level of complexity for future schemes, and engage in capacity-building activities with grantees where appropriate, such as training and technical assistance.

Balance Control and Autonomy

Another challenge is the need to balance the level of control with the level of trust. Grantors must ensure that the grant is being used appropriately, yet they must also give grantees the autonomy they need in order to perform and achieve the desired impact.

This can be a delicate balance, as too much control can stifle creativity and innovation, while too little control can lead to mismanagement and misuse of funds.

Having the right grant management system makes this easier – grant administrators can have a clear overview of the status of all applications and schemes, which reduces the need for unnecessary contact with grantees.

Use a Tiered Approach to Grant Making

It’s a mistake to use a one-size-fits-all approach to grant making. Different grantees have different capacities, experience levels, and goals. Grantors must therefore tailor their grant-making process to the specific needs and circumstances of each grantee to achieve the desired impact.

One way to do that is by using a tiered approach to grant making. This involves offering different levels of funding and requirements based on grantee capacity, experience, and track record.

For example, a small grant with minimal reporting requirements may be suitable for a new organisation, while a larger grant with more complex reporting procedures may be appropriate for one that is well-established.

Use the Right Grant Management System

Technology plays a significant role in simplifying and improving the grant-making process. It can automate many aspects of the application and reporting stages, reducing the time and effort required to apply for a grant and stay compliant.

It also makes it much easier for your staff to manage grants from their side. For example, it streamlines processes for monitoring and evaluating impact, providing real-time data on progress and outcomes.

So, how exactly can a grant management system make things easier for applicants and awardees?

Streamline the Application Process

To simplify the grant-making process, grant management software can provide applicants with easy-to-complete forms that are submitted electronically. Supporting documents can also be submitted via the system.

Grant managers can re-use application templates with Flexi-Grant, saving time for each instance that a scheme is set up. It also comes with a Question Bank for re-using questions across multiple schemes.

Improve Communication

Communication is key in making the grant management process run smoothly. Relying on email not only risks issues with data security, but it’s inefficient and harder to keep on top of.

Using a grant management system with a built-in CRM system solves that problem, letting you manage contact with applicants and grantees, and view past applications in one convenient place.

A CRM is an effective way to give guidance to applicants and awardees in a timely manner – especially important when strict reporting deadlines are in place. The last thing grantees need when seeking advice in this situation is delayed responses because their email got buried in an administrator’s inbox. It’s also the best way to keep them up to date with any policy changes.

Track Progress Easily

As mentioned, having a visual dashboard gives you an at-a-glance view of how your grants are performing. Administrators shouldn’t need to go digging through paperwork to check that everything is in order – and with such a dashboard, it’s easy to see which schemes need attention at any given moment.

Combined with automatic alerts when action is required, this prevents unnecessary contact that could overwhelm grantees and take up too much of their time if frequent.

Another vital feature of grant management software is the ability to quickly generate robust reports. Our system lets you create reports at the click of a button and includes bulk processing tools for greater efficiency.

Final Thoughts

Grant making is unavoidably complex – and if there’s no scope to reduce the complexity of reporting requirements and so on, funders must consider the ways they can best support applicants and grantees throughout their journey.

What we discussed above about how Flexi-Grant simplifies the process is just the tip of the iceberg. Discover more by seeing this powerful tool in action – contact us today to book a demo.