Online grantmaking

Foundations take to Internet to manage grants process.

By Ret Boney

It may not be a paperless world yet, but some foundations are finding efficiencies, which they say drive better grantmaking, through the Internet.

From established pillars of grantmaking like the W.K. Kellogg Foundation, which made its first grant in 1930, to new kids on the block like the Skoll Foundation, started in 1999, some funders are infusing technology into every aspect of their work, including making grants.

“This isn’t just about efficiency,” says Tom Reis, a program director for philanthropy and volunteerism at Kellogg, based in Battle Creek, Mich.  “It’s about effectiveness.”

At both foundations, technology is streamlining the grants process, helping program officers work faster and smarter, even from the road, and bringing them closer to their grantees.

Technology was built into Skoll from its inception six years ago, not surprising given that its founder, Jeff Skoll, was eBay’s first employee and first president.

But at Kellogg, technology has followed a long evolutionary process.

Celebrating its 75th anniversary this year, Kellogg first began using computer technology in the 1980’s for basic grant-tracking and word-processing, says Tim Dechant, director of technology.

In 1992, it upgraded to a new grants-management system, similar to older non-graphical mainframe applications, and began digitizing grant documents to add to the system.

“But that was harder to use and more cumbersome,” says Dechant of the system, which required function keys for navigation.  “And many program managers didn’t use it.”

Then, last November, after 18 months of planning and strategizing, and another year of programming and development, Kellogg unveiled Encompass, its custom-built, point-and-click grants-management system that handles all program-related activities.

The foundation, with 197 employees, net assets of $6.5 billion and grant expenditures of almost $220 million to more than 1,000 projects last year, receives about 5,500 grant requests annually, funding about one in five or six, Reis says.

One of the foundation’s 25 or so program directors, Reis says he is managing some 60 projects, about half of them requiring significant engagement, and is reviewing another 20 to 25 at any given time.

Encompass is designed to streamline that mammoth workload, Dechant says, and begins by allowing grant-seekers to submit requests directly into the system over the Internet, after walking them through a detailed online process to ensure their project falls within the foundation’s funding guidelines.

The system then manages all communications with prospective grantees, tracking each correspondence electronically, and scanning in paper documents when necessary.

The peer-review process, by which requests are examined and approved, is facilitated by Encompass, which assembles all relevant documents and distributes them to the appropriate people within the foundation to ensure all the information they need is at their fingertips.

Finally, the system manages the commitment process, tracking the foundation’s funding agreements, and then manages the ongoing life of accepted grants.

The technology department has 13 staffers plus about seven long-term contractors, and Dechant says the investment is paying off, both in streamlining the process and in helping the people at Kellogg stay better connected.

“This organization believes in the use of information and the application of knowledge and resources,” he says.  “In the 21st century, that means you have to have adequate information systems.”

From the program-management side, Reis sees payoffs as well.

“In the end, it’s keeping workflow moving and reducing the amount of process time it’s taking from proposal to a check in to the grantee’s office,” he says.

And that means grantees can get about their work faster, furthering their missions, as well as Kellogg’s.

The Skoll Foundation, based in Palo Alto, is a newer and smaller shop, with a staff of 18, assets of $502 million and some 100 grants totaling about $25 million last year.

The foundation was initially incubated at the Community Foundation of Silicon Valley in San Jose and used that foundation’s grants-management system until last summer, when Skoll converted to its own system, a product of CyberGrants, an Andover, Mass.-based application service provider.

Similar to Kellogg’s system, Skoll’s accepts grant applications online, more than 400 a year, after leading prospects through an eligibility quiz, which in itself already has created efficiencies.

“Only five out of 315 applications for a recent program were not considered because they weren’t aligned,” says Cristina Yoon, grants administrator for the foundation.  “In the past, we received over 600 inquiries that were not aligned.”

The review process still happens offline, says Yoon, but acceptances and rejections occur by email and active projects are tracked and managed online, yielding data that results in improvements to the process.

“It’s easier to get comparative benchmarks and statistics,” Yoon says.  “We can better evaluate our activities and improve our programs.”

Skoll also uses technology to stay in compliance with various federal guidelines developed as part of the U.S. Patriot Act, which asks nonprofits to check grantees’ staff and boards against 21 lists of known terrorists to minimize the misuse of funds.

By using software called Bridger Insight, made by ChoicePoint in Alpharetta, Ga., Skoll can conduct those checks online almost instantaneously, rather than having to manually check each name against lists that can be hundreds of pages long.

“It really helps us respond to the changing environment, especially in this time of uncertainty,” says Yoon.  “We can spend that time talking to our grantees and figuring out how we best can support them.”

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