The Open Road Alliance and the Rockefeller Foundation developed a Toolkit which serves as a framework providing guidance to funders on how to implement best practices in risk management, including how to determine their appetite for risk, communicate that tolerance to grantees, incorporate risk in both internal and external discussions throughout the grant cycle, and other actions. The New York Times ran a story, “A Tool Kit for the Donor Eager to Grasp All the Risks of Donation,” about this work to help funders talk about and manage risk more effectively. My hope is that by having explicit conversations about risk, this will help donors to take on more risk in their grant making, which includes funding smaller, more under-resourced organizations doing innovative work.
The Toolkit includes ten adoptable and adaptable tools that cover a spectrum of practice including how to determine your organizational risk profile and how to integrate specific financial, governance, and other procedural risk management activities into daily philanthropic practice. The tools are designed to be used in total or a la carte. Ultimately, the Toolkit is meant to facilitate and mainstream comprehensive risk management in philanthropy in order to preserve and maximize impact.
Over the past few years, equity has emerged as a key issue in American society, described as the “defining issue of our time” by authors and speakers in various fields. In the first half of 2016, the Robert Wood Johnson Foundation asked Putnam Consulting Group to conduct a field scan to learn how other foundations are working to incorporate equity — both in their internal operations and in their grantmaking. We conducted 30 conversations with staff leaders at 15 foundations considered by their peers to be on the forefront in embracing equity.
I’ve talked to some grant makers who believe that we should fully fund grant requests, or not fund them at all. However, I spoke with one grantseeker and he felt that he’d rather get something (partial funding), than a deferral to apply later. In part, this is because he said that he’s applying to multiple funders to fund the same project, so it’s not like he’d be relying on any one funder to support the entire proposed project. Also, there’s no guarantee if he were to apply again that he would receive funding, and by the time he reapplies, he’d probably have to develop and submit a completely revised proposal, because the project would be in a different phase of implementation.
Maybe one solution is to offer the partial funding to grant applicants and give them the option to decline the funding now and apply in a later grant cycle? We’ve partially funded several grant requests, and no one has ever turned away the money.
Any thoughts on partial funding? Please share your comments here!
The Stanford Social Innovation Review published an article last week about our checklist of recommendations to reduce implicit bias and promote DEI in grant-making practice! Please click here to view it.
Here are a couple excerpts from the article which frame our motivation for developing this checklist:
Our experience suggests there is widespread appreciation within the social sector for the principles and goals of DEI, but there are huge gaps in our understanding of which populations ultimately benefit from grant dollars—and from what we do know, the distribution is not particularly equitable.
There is very limited data in terms of the amount of funding grant makers awarded to projects focused on ethnic or racial minorities, because many grant makers do not track this type of data. Based on the limited data available:
…according to the D5 Coalition, less than seven percent of grant dollars [that we know of] went toward ethnic or racial minorities in 2013, even though these individuals comprise nearly 40 percent of the US population.
We think this is the case largely because
…in their effort to ensure that grant dollars go toward effective organizations, many philanthropists have adopted grantmaking practices that can actually perpetuate the unequal distribution of funds. For example, traditional grantmaking practice tends to favor organizations that have existing relationships with funders and dedicated development staff, which better position them to garner philanthropic support. As a result, less funding may make its way toward smaller organizations, many of which may be serving similarly under-resourced communities. Such implicit bias may lead some funders to fall short of their own goals to promote diversity, equity, and inclusion.
It is our hope that grantmakers will use our checklist useful as we work toward ensuring that our grant dollars reach the people who need them most.
We continuously revise this checklist, so we suggest that you subscribe to this website to receive updates. If you have thoughts on how to improve this list, please email nhchan@gmail.com or pamelafischer89@gmail.com. We also invite you to contribute stories to this publication of your own related experiences.
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Download 2-page abridged version of the checklist with a sample dashboard of metrics
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View the full checklist below
Below we have grouped the checklist’s recommendations based on the following categories of grant-making activity:
Grant Applicant Identification, Research, and Outreach
Recommendation
Additional Notes
Conduct more in-depth research to vet organizations before you invite them to apply
This is so that the research burden falls on the grant maker and not the grantees/applicants
Poll community foundations and intermediary organizations working in the region of interest to learn about strong organizations working at the grassroots level
Also check community lists of Black- and other minority-owned businesses. Think creatively about other ways to find out about nonprofits — talk to leaders in the communities of interest.
Ask grantees to recommend other organizations to invite to apply
Conduct outreach to a wide range of potential applicants and hold an open call for grant applications (or balance the number of applications received via an open call versus those from organizations who were invited)
Invitation-only processes may screen out more under-resourced organizations which may not have as good networks as more established organizations. We understand that an open call for applications may result in a great deal of work to review all the applications, so one solution would be to create a short screening questionnaire that interested applicants could fill out online, and you could then use the results of that questionnaire to determine whom to invite to submit a full application
Invite fewer applicants
Increase the chances of applicants to receive grants by lowering the ratio of applicants who receive grants versus those who do not (e.g., at least 50 percent of applicants receive grants)
Grant Application Process / Request for Proposal (RFP)
Recommendation
Additional Notes
Consider a limited timeline from first contact with prospective grantees to when they receive an award (e.g., 3–6 months).
A shorter timeline (under 6 months) is particularly important for smaller* organizations since they have less financial buffer to weather significant changes that may occur as they are waiting to hear about their proposals.
We received feedback from some funders that longer timelines can allow for deeper capacity building around the grant application process and to build relationships with grantees. However, we also heard from nonprofits that it can be frustrating to invest many months in building a relationship with a funder, but not to receive any funding in the end. If you opt to have a longer timeframe for grant making, you may consider monetary compensation for the time invested in the grant application process, regardless of whether you award a grant to the applicant.
Consider eliminating the written grant application altogether
Possibly replace the process with site visits and conversations with the applicant organizations
Consider receiving applications and awarding grants on a rolling basis.
This can be critical for smaller* organizations since they have greater budget sensitivities and therefore time-sensitive priorities.
Give stipends to applicants who do not receive grants to compensate them for the time they spent on the application process (e.g., $1,000 for a 10-hour process).
Ask applicants how many hours they spent on the application. Better yet, provide funding for the applicants to work with their communities in a deep way to develop community-driven project proposals.
NOTE: For open grant application processes, we realize that stipends may not be realistic, since the volume of applications is much higher.
Create processes that are more flexible, nimble, timely, and responsive in awarding grants
Consider awarding emergency / contingency grants that have a very simple process and short turnaround (e.g., 24 hours or a week). These grants can help keep smaller* organizations afloat, as they have less financial buffer to shore them up against contingency situations.
Consider giving your program officer a discretionary fund that they can award to grantees, without approval of other staff/board.
Allow applicants to submit proposals prepared for other funders or common applications
Allow applicants to first submit short LOIs (letters of interest) to express interest in applying for a grant, and use the LOIs as a screening mechanism to determine who to invite to fill out a full grant application.
The LOI process should NOT be cumbersome and not be a mini-application process. Consider using the LOI as the grant proposal itself — e.g., if the LOI is compelling, just conduct some additional research and consider making the grant award without a formal application.
Instead of an LOI, we use a short online screening survey that we send to orgs who have expressed interest. It takes 15 minutes to complete. We ask them to provide a 3-sentence description of the proposed project they and provide basic info. We then download all the responses in a spreadsheet and quickly (2 hours) sort and identify orgs to invite to submit full grant applications.
Clarify and demystify the grant-making selection, process, and timeline.
Hold optional info sessions with applicants to answer questions and provide guidance to navigate the application process. Explain the grant-making process: What's the difference between an LOI and a grant application? What’s the difference between an output and an outcome, or a goal vs a strategy vs a vision? What is a logic model? Provide examples. View your application process as a means to build capacity to develop grant applications for any funder.
For applicant organizations which have staff with limited English proficiency, consider providing language and cultural translation technical assistance with their grant applications
Also consider having at least one grant reviewer who is familiar with that culture / language.
Give smaller* organizations additional time to submit their applications
E.g., two additional weeks. Even offer to review application drafts before the deadline.
Collect feedback about number of hours to go through application process and other ways to improve it
Collect feedback from applicants, via a question on the application itself, a separate email or a short online survey
The set of recommendations below is specifically for the grant application questionnaire / request for proposal (RFP)
Recommendation
Additional Notes
Make grant application short and concise to minimize burden on applicants. Keep the application process under 10–15 hours
If possible, streamline what information you need from applicants during the application process, and reserve other questions till after you have decided to award them the grants. Consider the size of the grants you are awarding and make sure that the burden on the grant applicant is commensurate (e.g., smaller grants should mean more simple, streamlined grant application processes).
Let applicants know the amount of time (e.g., 10–15 hours) it should take to complete the application, to help them manage their time.
Make sure that questions are clear and not duplicative
When applicant responses to multiple questions are similar, consolidate those questions. In other cases, you might be asking several questions in one question and there is not enough space for the applicant to submit an adequate response, especially with character limits. In this case, break up this question into separate smaller, discrete questions.
Have a user-friendly online platform for organizations to submit their applications
Eliminate character/word limits for responses to application questions
You could recommend a character/word limit as guidance, but allow the applicant flexibility in the amount of text they put in the application. This will save time since they will not have to trim responses to meet character limits. (We found that eliminating character limits saves applicants up to 50 percent of their time spent.) Instead of number of words/characters, offer guidance on the number of sentences.
Minimize the number of required attachments (e.g., 5) for the application
Instead, require most attachments after you have decided to fund an application. Instead of asking for some of the information, consider whether you can track it down yourself easily — e.g., GuideStar, the IRS Business Master File, or IRS Publication 78 are great sources for verifying grantee status. Also, be flexible in terms of templates/file formats for these attachments — try not to require applicants to submit using your templates / file formats
Do not require applicants to translate their project budget into your budget format, OR provide a very simple, flexible budget template
Use lay language and avoid using technical jargon in application form
Allow grant applicants to make the case for the need for their proposed projects in their own terms
-- since they may come from different cultural backgrounds and lack knowledge of “standard” supporting data such as Census and other public data sets.
Educate and connect applicants to data so they can build their case with other funders. For example, one source neighborhood-level data is the National Neighborhood Indicators Partnership (NNIP). NNIP is an affiliation of data web portals across U.S. cities, which help democratize access to community-level data One such NNIP affiliate for Washington, DC is NeighborhoodInfoDC.org.
Ask about how perspectives of beneficiaries (and the community) are included in program design and delivery
Ask about demographics of organization’s beneficiaries, board members, and staff members
Ask about cultural competency of staff, where appropriate
Give applicants the option to provide a budget narrative so that they can explain any financial circumstances
Give applicants the option to submit a short video (low-quality, shot on their phone cameras) to complement their written application materials
--since some may be able to tell a more compelling story with video/pictures. This should be optional, not an additional burden
If an organization has received strong third-party ratings (e.g., Charity Navigator), consider exempting them from submitting some of their documentation
Ask applicants how they currently measure success and what metrics they already collect
This will help inform what metrics you would consider collecting from grantees, and help align your data collection with their existing data collection
Due Diligence and Grant Decision Making (DD)
Recommendation
Additional Notes
Use a “peer-review grant making” process
E.g., advisory board and grantees vote on applications; or applicants vote on anonymized application
As you are making decisions about grants to award, consider what your overall portfolio looks like and where there might be “gaps” in terms of diversity
We have found it helpful to create a dashboard of charts with different characteristics of our current grantee portfolio, and keep the portfolio composition in mind as we make decisions. Portfolio characteristics, for example, could include percent of beneficiaries by race/ethnic group, by age, by traumas experienced, by type of intervention, by geography, by income level, by sexual orientation, by gender, etc.
Be aware of how your due diligence process may favor “evidence-based” practices(e.g., have been tested empirically with randomized controlled trials and have been documented through academic studies/journal articles)
Traditional academic research studies may tend to focus on white populations and are not as inclusive of others. As a result, practices that are effective for under-represented communities might not have a solid academic research evidence base to validate them, but might have other types of evidence of effectiveness, including qualitative research findings.
Be aware about how your due diligence process may be biased towards well-resourced organizations with greater capacity (e.g., financial stability, greater evaluation capability, etc.)
You may want to decide ahead of time to award a certain amount of funding to smaller* organizations, and compare/judge applications from smaller* organizations against each other, and NOT against larger, more well-resourced organizations, which will mostly likely have professional grant writers on staff. Beyond organization size, consider bucketing grant applications in other categories for comparison.
Do not over-rely on a scorecard / scoring rubric to determine funding decisions
Scoring applications may serve as a good first cut at prioritizing applications, but it is hard to capture nuances in a simple application score. Use scores as a tool for discussion, but not as a decision-making tool. Find the right balance.
Financial due diligence: understand the board/client’s tolerance for funding higher-risk organizations
Communicate directly with applicants when you have questions about their applications
Set up quick phone calls to understand their circumstances, as well as hear from them what makes their application unique or innovative and how they are working to address their community’s needs
Give honest feedback to organizations on their applications, out of deference for the time they invested in applying.
This will help build their grant-writing capacity for future grant applications.
Grantee Reporting and Evaluation
Recommendation
Additional Notes
Have realistic expectations for grantee results based on the grant amount and grant period, along with the intervention and target population
If funder expectations are too high, this may encourage grantees to “cream skim” whom they serve through their programs and works against the goal of equitable access to their programs — grantees may choose to serve those beneficiaries who will be the most responsive to their programs and likely to demonstrate results, and direct resources away from those who are most in need but are “hard to serve” and will not show results as quickly.
Work with grantees to determine which metrics they should collect
This should be based on their organizational capacity as well as the data they already collect. Be as flexible as possible.
Deepen understanding of and be open to different types of evaluation, e.g. participatory evaluation
Traditional evaluation methods may not always be the most effective, depending on the program strategy, the cultural context, and/or the population being served.
Make reports (and metrics) streamlined and easy for grantees to fill out
E.g., 1- to 2-page executive summary and some metrics. Consider allowing grantees to submit video reports (in particular for those who are led by and serve those who have limited English proficiency)
Consider asking grantees to submit reports they have already drafted for other funders
Consider making site visits to grantees, in lieu of formal evaluation reports
Compensate grantees for the time they spend on the site visit if it is substantial)
Pay for data collection / evaluation efforts
Or give grantees additional money to help pay for this activity. Allow grantees to set aside a certain amount/percentage of their project budget for evaluation and reporting.
Provide technical assistance to grantees with evaluation
E.g., instruments and tools such as assessments, survey questionnaires
Consider quarterly check-in calls with grantees instead of formal reports
Other Grantee Management
Recommendation
Additional Notes
Have an open door policy with grantees: Offer open and responsive communication with grantees
Create a simple grant renewal process for grantees
For example, allow current grantees to submit a combined grant report and a proposal for continued work on the project. Also, do not ask grantees to resubmit documents that they have already previously submitted.
Streamline grantee processes for project timeline extensions and budget modifications
Encourage feedback from grantees
Consider offering anonymous mechanisms for grantees to submit candid feedback, e.g., anonymous survey or third-party evaluator
Provide additional support beyond funding
E.g., connecting grantees with other organizations and funders, being a sounding board, etc.
Create learning communities with grantees who share similar problems of practice
This will help to build their networks and help them to work together to address common issues.
Host restorative retreats for grantees
For example, you could convene current (and some previous) grantees along with like-minded funders and capacity builders for inspiration and renewal, and to encourage cross-sector connection, build relationships, support peer learning. Ensure that the suppliers and venues for these retreats and other foundation meetings also promote DEI.
Develop relationships with grantee program staff
Conduct site visits to grantee sites to understand what is happening beyond what is reported via metrics
Advisory Board Recruitment and Management
Recommendation
Additional Notes
Discuss generally (either internally or with board) what a diverse and inclusive board would look like for the foundation
Consider short term limits
This will encourage diversity on the board
Include one or more grantees on the advisory board
Consider having a target percentage of board members who are grantees
Include one or more beneficiaries on the advisory board
Consider having a target percentage of board members who are beneficiaries.
Embed DEI in governance documents
Train board in DEI principles
Grant Making Strategy
Recommendation
Additional Notes
Discuss with board/staff the extent DEI should be incorporated in the priorities of the foundation and in the criteria by which you assess grant applicants
What would incorporating DEI tangibly look like, and how will you know it is being incorporated? Along with that, clarify how the board defines social good impact and what type of social good impact it would like to make through the fund (e.g., a social good impact accrues direct positive social, economic, financial, or political benefit to communities or populations historically underserved by the market or public-benefit institutions)
Discuss with the board/staff how much risk they are willing to tolerate
E.g., funding smaller* organizations which have lower capacity and potentially more unstable finances
When conducting a strategy refresh to more deeply embed DEI in your work, be mindful of also aligning the other systems in your organization with the new strategic direction
Systems such as grant-making processes and grants management systems, professional development, etc.
Consider unrestricted grants
Consider multi-year grants
If grants are only one year, be up front with grantees about this, as well as the process to renew their funding year to year
Consider grants for capacity building including professional development, especially for smaller,* under-resourced organizations
They may not have dedicated grant writers and may lack critical infrastructure to successfully implement their programs. However, the orgs closest to the ground may have a better sense of what programs will be most effective, compared to some larger, more well-established orgs.
Provide funding for an org development consultant from the grantee's community, to help guide the grantee through the process of building their capacity.
For professional dev grants focused on sending grantee staff to conferences, please cover travel costs, on top of the conference registration fees.
Be flexible about the percentage of an applicant’s budget you will fund
If you have a fixed cap on the budget percentage you will fund, smaller,* more under-resourced organizations will end up with smaller grants than larger organizations, in an absolute sense.
General Project Management
Recommendation
Add DEI as a standing agenda item at meetings (staff and board)
Run through this checklist annually to see how you can continue to adapt your grant-making practice, as opportunities arise and evolve
Notes
This checklist is not intended to provide guidance on how to secure strategic buy-in to implement these practices, but rather this list is meant to recommend specific tactics to more deeply embed DEI into your processes.
Some of the practices on this list, such as unrestricted multi-year funding, may simply be considered standard good grant-making practice. This is unsurprising, and affirms that good grant-making promotes DEI.
* For the purposes of this checklist, we use the term 'smaller organizations' as a proxy for organizations that have lower organizational capacity and consequently may face barriers to accessing philanthropic funding. While we cannot assume all organizations serving under-resourced communities are 'small,' we want to acknowledge that organizations serving those communities are often under-resourced themselves and might be 'small' in terms of budget, number of staff, fund development capacity, and/or other aspects of organizational capacity. We encourage you to use/adapt this checklist in whatever way will be most effective to ensure that your funding strategies are equitable for under-served communities.
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Acknowledgements
We thank our former colleagues at Arabella Advisors and representatives of the D5 Coalition, Emerging Practitioners in Philanthropy (EPIP), Asian Americans/Pacific Islanders in Philanthropy (AAPIP), Hispanics in Philanthropy (HIP), Bay Area Blacks in Philanthropy (BAPIP), Northern California Grantmakers (NCG), Bay Area Justice Funders Group, and The Whitman Institute, as well as many others, for providing invaluable input on this checklist of recommendations.
This website is intended to serve as a platform to share resources related to promoting diversity, equity, and inclusion (DEI) in grant-making practice and in philanthropy more broadly.