Written by Heidi Dusek, Former Private Foundation Executive Director
As a foundation, finding the right grantmaking software is essential for streamlining your grant process to ensure your organization runs smoothly and efficiently. With so many options on the market, it can be overwhelming to determine which software is the best fit for your needs. While most guides will offer the obvious technical features, this article will highlight five hidden, and essential, criteria to consider as you search for the perfect solution.
With almost 20 years in managing grantmaking programs, most recently serving as a Private Foundation Executive Director, I have come to learn the critical factors of grantmaking software are not in the technical features, but rather the operational functionality. The standard function of grantmaking software is typical: host an online application to receive requests; provide back-end system to assist with recordkeeping and due diligence; requests able to be shared with reviewers; grant decisions captured and giving history accessible. The grant process can be tweaked within each foundation to fit their values and philosophy. The criteria I do not see talked about is how grantmaking software works to make the rest of your job more efficient and effective.
During the pandemic, our philosophy was to address the needs in real-time, making funding accessible and collaborative as possible. We moved to a conversational grantmaking approach, making weekly grants and sometimes turning over grants in less than 48 hours. One of the major challenges was that our grantmaking software slowed us down during the largest giving event in our 30-year history. It was a barrier to our philosophy of being responsive to the community’s needs. In addition to the typical grantmaking process and recordkeeping, we had a new set of criteria not discussed in philanthropy articles nor technology reviews. The five criteria we established were:
- Functional use of data in real-time
- User experience
- Dynamic workflows right sized for the request and giving track
- “At-a-glance” views and summaries
- System integration with other business operational systems.
I will walk through how we used these criteria to select our new grantmaking software and the importance of these criteria in overall foundation operations. You will see how these begin to intersect in the examples below and filed our overall operational capacity and growth potential.
Functional Use of Data in Real-Time
Gone are the days of putting data in and having it regurgitated back out. With the enhancements of Business Intelligence (BI) capabilities and visualizations of data supporting functional views and dashboards, now more than ever, the data can work for us. A key factor is the ability for the solution to support real-time reporting. In our effort to be responsive, we wanted to know where we stood each day, not each week.
When we were assessing our internal responsiveness, we did not want the human burden of data collection. We were interested in getting access to machine-generated data instead of human input. For example, is there a back-end timestamp to see how long grantees take to complete the application? While we might think our application is simple, having the back-end data available helps us better understand the data behind the story we were telling ourselves. If we can access machine-generated data, we can have a better understanding of the time burden without adding to the inherit power-dynamics at play in grantee and funder relationships.
Another example of functional use of data is seeing the full scope of the relationship with grantees. Grantmaking software often only shows the transactional nature of philanthropy. As we moved closer towards trust-based philanthropy, while also navigating operational contingency and succession planning, it was increasingly critical we “see the relationships” beyond the dollars. For us, this meant having a Customer Relationship Management (CRM) system as part of the grantmaking software was critical. When reviewing a grantee record, I wanted to see the full scope of the relationship with the individuals and organization (the grants, impact stories, site visits, and historical context). I also wanted to see the organizations we were concerned about and the additional resources we have considered in our overall giving portfolio. Having functional use of data can support many other aspects of the foundation operations.
The user experience within the criteria is intended to notice how it FEELS to work in the system. The purpose of the system is to collect and share information. This is the most overlooked or disregarded criteria in the grantmaking software selection process. Cloud-based and mobile friendly are merely check boxes. When reviewing software solutions, go deeper into how the experience looks and feels. When I reviewed the comments from staff and volunteers who participated in the demos for the grantmaking software solutions we were considering, the notable quotes were the ones demonstrating how it felt to interact with the system. For example, some of the quotes were:
- “The system seems cumbersome.”
- “The layout and flow don’t feel intuitive.”
- “Learning curve is steep.”
- “Will this make things easier for us? It seems like a replacement, not an enhancement.”
- “Application process looks complicated.”
- “The system looks more like an audit, not a funder focused on relationships.”
If we feel overwhelmed or things feel cluttered, we carry that into our work. If the design is simple and follows what I like to call “common sense formatting,” the adoption and onboarding process will be much smoother. There will always be a learning curve. Engaging change-resistant members in the demo and selection process is important for both staff and grantee adoption. When you are down to the final decision-making stage, I encourage you to get feedback from the various constituents who will interact with the system. What do grantees think of the demo? Will board members and grant committee members interact with the system? One way to test this is to have a scenario for the grantmaking software company to work through so everyone can get a feel for how it will flow.
Standard operating procedures are important for efficiency and important to ensure updates within the grantmaking software are effective. It does not mean workflows and templates cannot be adapted to address the unique aspects of each foundation and grant programs require. Having different applications is one way to right-size the giving process. Dynamic workflows are the back-end process to allow foundation staff the means to adjust to varying needs based on each grantmaking program. Building out a set of templates, automations and workflows allow staff and committee members to maintain relationship-focused work while also supporting operational efficiencies that sometimes get bogged down with customizations.
Within the family foundation I worked at there were several grant programs that were designed to support the spirit of philanthropy through individual-advised giving. The focus of this giving program was small in the overall dollars awarded lower the number of grants awarded was high. The grantees often were not aligned with overall key strategic efforts of the foundation. Therefore, the depth of due diligence and relationship building effort our staff engaged in for these grant programs were not equivalent to the unrestricted operations grant program. If we spent the same amount of staff time on each application and grant. we would be spending time on the wrong things. We were more interested in investing staff time in developing and nurturing relationships with some of our partners working with us to drive change. While there are standard operating procedures and minimal viable workflows, having dynamic workflows that can be right sized to the program was critical for us.
As we worked through the full sequence of workflows, we were able to identify unique characteristics for communication templates often triggered by a field or step automation, allowing us to create dynamic workflows to fit each program. Having grantmaking software that can allow your foundation to right-size the application and grantmaking process to fit the needs of the program also reinforces principles of trust-based philanthropy.
At-a-Glance Views and Summaries
Like having functional use of data, it is also important the data rolls up into user-friendly views and summaries. At-a-glance summaries are most often used with program budgets and giving summaries. As we dug deeper into the grantmaking software capabilities we explored how else might this software help us?
With nearly 20 years of experience in the sector, I have seen all the trends in data collection and impact reporting. We knew we needed tiered metrics to have a better understanding of impact. For example, nonprofits have access to program level and client data. We also collect organizational health data through the due diligence process of reviewing applications. Collectively, all foundations want to know they are contributing to a larger community level impact. The challenge with many grantmaking software solutions is we can define each layer of metrics, but they are segregated. Having the tiered metrics work together, we have a better understanding of the entire view of our impact story. Similarly, seeing the tiered historical data can also provide a much richer story on our strategy and role in the communities we serve. Having tiered metrics in our historical data might include data not in relationships we have with other funders and grantees, as well as the depth of those relationships; the scope of organizations we support and where they might be in their growth and life cycle; all combined with our overall giving history.
The summaries and views allowed us to better communicate with the key stakeholders, grantees, and other funders working on similar focus areas. Specifically, it gave insight to how we could play in the space of community impact and how we might compliment other existing giving programs. Amid the pandemic, the local community foundations had all established a COVID-19 Emergency Response Fund. Our foundation had deep roots in the mental health sector, which led us to be one of the early funders supporting nonprofit mental health agencies who offer telehealth services. Additionally, we did preliminary work to provide back-office services for nonprofits in our giving region. We learned we had an opportunity to collectively source and distribute the needed PPE items. Prior to our new software, we stored all of these “other services” outside our grantmaking system. When we included the whole picture of functional data, we were better articulated to walk alongside other funders and support organizations.
As a collaborative funder, we occasionally awarded grants to efforts where the applicant applied to another funder. Tracking the entire scope of the applicant with direct requests and collaborative funding support needed to be visible within the grantee dashboard.
Integrates with Other Systems
Implementing a new system can feel like starting over. Defining how the grantmaking software can work with your other system, as opposed to a separate system, can add considerable functional capacity to your foundation workload.
Grantmaking software was one of the four foundational back-office systems we used to carry out our mission. A few of the simple integrations, like Outlook email, allowed us to help track progress, questions, and support the overall relationship with an organization. The functionality of email plug-in, tracking activities outside the traditional application process throughout the year, supported deeper level engagement. In our old system, those critical items were often stored separately and uploaded in a foundation documents folder, but not linked to the organization or grant record.
Another important integration for us that provided a due diligence step was GuideStar, or another tool to confirm the grant applicants IRS tax status and 990. Having an indicator when the applicant was classified as a private foundation was helpful to avoid having to use expenditure responsibility.
The integration between our grantmaking and contacts was critical. Prior to the integrated email solution, each staff member had both shared and individual email lists. Keeping our contacts up to date was a laborious process. Having everything all in one place eased the amount of time we spent operating and documenting between systems.
The hidden five criteria within software selection can make a significant difference in a foundation’s overall functional capacity and growth potential. When reviewing vendors, keep in mind you are looking to enhance your grantmaking system, not simply replace it. Choosing a partner that can support your various needs and offer suggestions in how to make the software solution work for you is key. Your work is too important to be bogged down with substandard software.
About the Author
A catalyst, innovator, healthy disruptor and unshakeable optimist, Heidi’s passion lies in challenging the status quo, driving change and delivering social impact. She is recognized as a translator between sectors whose background transcends education, health, nonprofit, university, business, philanthropy, design and podcasting. While stacking talents and lived experiences is her superpower, she continually draws on her liberal arts bachelor’s degree in education and a master’s degree in educational technology.
With nearly 20 years of holding various roles within foundations, most recently as Executive Director of a private family foundation, Heidi often educates on the layers of complexity and conflict embedded in philanthropy. She has embraced the role with a lens of empathy, leveraging human centered design frameworks, strategic operational alignment, and framing how trust and curiosity are threads embedded in the fabric of giving forward.
Heidi is currently on a gap year with her family of five. Traveling the country in an RV while consulting as a freelancer, she continuously works to support foundations and businesses grounded in community change.