No matter their missions, nonprofits across every sector are experiencing heightened pressure. Federal funding cuts, slowdowns in donor giving, and increased safety and security concerns are all contributing to a collective feeling of burnout. At a time in our country’s history when nonprofits are needed most, limited capacity is preventing organizations from accomplishing all of their goals.
Many in the nonprofit sector wonder why philanthropy isn’t doing more to ensure frontline organizations have the resources and bandwidth to deal with the steady onslaught of crises they are facing this year. This is absolutely a valid concern, and it presents funders with an opportunity to show nonprofits that philanthropy is an asset, not a roadblock.
By cutting back on reporting requirements, we’ve saved grantee partners time, resources, and stress.
One of the ways to lessen nonprofit burnout is to implement flexible, streamlined reporting methods for grantee partners—a practice that is being embraced and promoted by more sector leaders as nonprofits face an increasingly uncertain funding environment.
Together, the authors have spent a combined eight years on Democracy Fund’s grantmaking team and now serve in leadership roles at the fund. For as long as we’ve been in the field, we’ve heard from grantee partners that the extensive reporting many foundations require can be a burdensome distraction which uses time and resources that would otherwise go toward advancing their missions.
The Benefit of Flexible Reporting Methods
At Democracy Fund, our reporting practices have evolved to better align our grants management policies with our values and learning practices. In 2017, grantee partners spent an average of 15 hours on our reporting process, but by 2023, that number went down to five, according to a report run by the Center for Effective Philanthropy.
By cutting back on reporting requirements, we’ve saved grantee partners time, resources, and stress. The change frees the Democracy Fund team up to conduct research, build relationships, and support grantee partners. Importantly, these shifts haven’t come at the expense of learning. They’ve allowed us to stay deeply connected to the work in ways that are more meaningful and less burdensome.
We also prioritize flexibility in our grants management approach. An example of this is substituting grantee partner written reports with assessments based on a focus group from an external facilitator—as recently implemented by our Digital Democracy Program. Our program teams have also collected reports via short one-on-one phone calls. This type of reporting focuses on building relationships with grantee partners and gives our staff the flexibility to streamline reporting based on the scope of the grant and what they know of their grantee partner’s capacity.
At Democracy Fund, shifting how we think about grants management has helped us address the inherent power dynamics between funders and grantee partners, deepen trust, and take accountability. We know that to build stronger relationships, we need to show grantee partners that we highly value their time and energy.
This goes beyond reporting and extends to all aspects of grants management. For example, through our 2024 All by April evaluation, we found practices that helped funders move dollars quickly, including asking grantee partners to only submit an updated budget to process an amendment, and adopting a shorter renewal application rather than asking grantee partners to send information their current funders already had.
Just because the reporting method is flexible, doesn’t mean we’re learning less.
Even if funders don’t have any additional dollars to give, removing the burden of lengthy applications and traditional reporting can give nonprofits back some valuable time.
Trust the Adjustment Process
Adjusting our grants management process hasn’t always been smooth, though.
Going through the process of changing our reporting practice forced us to start breaking down silos internally. Rather than thinking of grant reporting as a requirement, we’ve moved to thinking of it as a tool to collect data to inform our learning. Philanthropy is often hesitant to abandon these long-standing practices but part of being a responsible philanthropist is taking a hard look at what we use as the default option and changing when things don’t work.
So, what’s preventing more funders from employing flexible reporting?
It’s no secret that the traditional, cumbersome reports often sit on a metaphorical shelf. Still, funders often view lengthy grantee partner reports and learning about a grantee partner’s work as one and the same. We challenge that notion.
There is tremendous value in understanding a grantee partner’s experience, but this learning can happen through lighter-lift methods. And with no legal requirements for nonprofits to report their impact to grantmakers, there is plenty of room for creativity and flexibility.
To our peers who are reluctant to move toward new reporting methods, here’s what we say: Just because the reporting method is flexible, doesn’t mean we’re learning less. We have found through this process that prioritizing relationship building is the key to building true partnerships with grantees. Those relationships are the foundation for honest and transparent conversations which help us make good grant decisions.
Together, there’s still plenty we can do to prevent burnout.
There is tremendous value in understanding a grantee partner’s experience, but this learning can happen through lighter-lift methods.Democracy Fund is still learning. While we’ve gained great insights about what works and what doesn’t when it comes to reporting, this is still a work in progress, and we are gleaning insights from some of our peers that have removed even more administrative requirements. Eliminating unnecessary barriers for nonprofits is a growing movement across philanthropy, and we encourage more funders to join us and to take a look at other practices that can shift. What else can we change as funders to make everything just a little bit easier for our grantee partners and ourselves? So often we focus on lofty strategies but let’s look a little closer to home to see what we can change.
If you’re a funder interested in streamlining your reporting options, Democracy Fund can be a resource. And if you’re a nonprofit looking to convince your funders about how different methods of reporting can still be valuable, we can provide the information you need to start the conversation. You can reach out to the grants team at info@democracyfund.org.
Let’s make advancing nonprofits’ missions simpler for everyone.
