Grant System Design

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As the size of a foundation increases, it tends to act more like a business and adopts more sophisticated processes. It also divides the labor into more specialized workers and decentralizes decision making. Coincidentally, as foundations increase in size, they decrease in effectiveness. This poor performance may be caused by a mismatch between how the foundation is organized and the environment in which it operates. It may also be suffering from a disconnect between its grantmaking tools and its desired style. In any event, too much money in a foundation can produce its own problems and limitations. Philoptima Consulting helps foundations and donors organize their grantmaking processes, tools and styles to closely match the organization’s intent and capacity. We also consider the grantee nonprofit community in a foundation’s target population or geography in balancing the sophistication of tools and approaches. Finally, we suggest data collection and assessment tools that help donors learn quickly and early if their grants are achieving the intended impact.

We most often focus on the design of strategic and responsive grant systems. Strategic systems imply by their name that some thought went into the selection or design of the expenditure by the foundation before it was released to a grantee. Responsive systems leave much of the design and methodology to prospective grantees and, as a result, are frequently less tightly connected to the aims of the foundation. Both systems are important tools but their differences demand unique styles and evaluation approaches. Other systems we have designed include Request For Proposals (RFPs) as a sub-set of responsive philanthropy.

We recommend that our clients focus on the design of their grant systems only after they know what they want to do and why. Mission, goals, objectives, strategies and tactics come first. Selecting the most appropriate grant tools are much easier to discern after these fundamental issues are resolved. Call on us to help you get started.