New report warns that grant application system is broken

Not-for-profit cloud platform, The Good Exchange, has recently announced the results of new research “Technology in the Charitable Sector“’, into the current grant application and distribution landscape.

Conducted by global research company, Vanson Bourne, respondents from 100 UK grant-making organizations and 191 applicant organizations (fundraisers) were interviewed throughout January and February 2019.

The findings have revealed significant levels of dissatisfaction with current processes and an increased appetite to embrace digital to reduce wasted efforts and enable collaboration to address societal issues, with charities contending with the ongoing impact of government cuts to funding.

The Key findings of the research include:

1. For many, the grant application system is broken

Respondents from applicant organizations said that their organization typically completes 33 separate grant applications per year, with each taking eight hours to fill in on average. This equates to 264 hours in total spent applying for funding. Often undertaken by volunteers or as part of other full-time job roles, this can be a significant burden for applicant organizations.

While hundreds of hours per year are currently spent on filling in grant applications, almost three in five (59%) are ultimately unsuccessful according to the applicants surveyed (equating to 22 working days per year of wasted effort per applicant organization).

What’s more, the time taken by applicants to fill in their application forms is being significantly underestimated by grant-makers, perceived at two hours less per application than applicants claim, or ten working days less per year on average (per applicant organiszation).

2. Myriad societal pressures, including ongoing Government cuts, driving increased applications for funding

The survey revealed several issues facing applicant organizations, with many stemming from financial and resourcing pressures. Indeed, while government grants accounted for 17% of charities’ income in 2003/04, this had fallen to just 8% by 2015/16 and the resulting funding gap continues to widen.

When asked about issues facing their organization as a result, nearly 70% of applicant respondents reported having to look for new sources of income/new ways to fundraise, and over half (54%) said they are having to increase the number of funding applications made to charitable trusts, foundations and other funding sources.

On the grant-making organisation side, 58% reported an increase in the number of funding applications received as a result of the widening funding gap. 56% noted an increase in the number of charitable organizations closing down and 51% said there had been an increase in the amount of money being requested by applicants.

3. Technology: an increased awareness and desire to do more, but digital skills gap and other obstacles blocking progress

Most grant-making organizations are using technology in some form, however, the survey revealed low levels of satisfaction with some of the technology used to assist key areas in the grant-giving process.

Around six in ten (57%) stated that their current processes are perceived to be working well. The fact that there was near universal agreement among grant-making organisations that technology can help with the grant management process (95%) highlights that these organizations are unwilling or unable to change. Further, 75% agreed that technology can enable better collaborative working with other grant-makers.

The research also revealed an appetite for a single stage one/initial application from both grant-makers and applicants which could help to improve processes, reduce wasted efforts and to measure funding impact. 87% of applicants agreed that this was a good idea, compared with a slightly smaller proportion (56%) of grant-makers. Nearly two thirds of grant-makers said a reduction in the number of ineligible applications would likely incentivize their organization to move toward a technological change in the way it processes applications.

4. Trend moving towards location and theme-based collaborative funding

Almost half of all grant-makers said they do not currently collaborate online with other grant-makers. Three-quarters of grant-making organisations said they were likely to collaborate with other funding organisations and partners to enter into location-based or theme-based giving to tackle pressing social issues in communities such as homelessness or youth knife crime, whilst maintaining autonomy of funds.

Further, 87% would be likely to move toward a technological change if they were able to invite other grant-makers to support applicants they are funding or want to fund but can’t; while 91% would do so if it gave them a more effective way to measure funding impact.

The full report “Technology in the Charity Sector” can be downloaded HERE.