Increasing efficiency in grant reporting

Unlike many cycles of nonprofit operations, grant reporting doesn’t really have a season; it’s all year long. Grant reporting also varies widely by funder. Some don’t require reporting at all; others ask for verbal reports in-person or over video call; some allow us to repurpose reports; and others require traditional and extensive reports in their own custom templates and timelines.  

Here we share how we turned traditional, time-consuming grant reporting into a faster, easier, and more efficient process. We’ll also share our vision for the future of grant reporting in the sector. 

A look at the grant reporting process 

Each year, Candid is required to submit approximately 100 grant reports to our funders. Grant reports provide a formal way for us to share how we used grant dollars, what we accomplished, and what challenges we faced. Many grant reports also require an accompanying financial report that details what the funding was spent on. These reports help funders understand the impact of their grants and create accountability for grantees. But they can also be time-consuming to put together, particularly for small nonprofits. 
 
The type of grant we’re reporting on often determines how complex the report is. For example, general operating support grants fund the work of the organization as a whole. These tend to be the easiest to report on, because they can usually be completed by the development team with a pre-prepared overview of what the organization is working on. In comparison, project grants are more complicated to report on. While development teams typically manage all grant reporting, these reports require program staff to take time away from their other work to share project-specific information to inform the report. 

Our approach to simplifying reporting

Reporting templates often ask similar questions in slightly different ways. But at the end of the day, they essentially want to know the same basic information: nonprofits’ activities, accomplishments, organizational updates, and challenges during the grant period. To streamline our process, we’ve moved away from creating custom reports for each funder’s template. Instead, in December of each year, our development team creates one exhaustive document that covers everything we anticipate we’ll need for grant reporting. 

We call this our narrative report. To streamline the process, one person collects the information and drafts the report. We often repurpose content between our annual report and more detailed narrative report to maximize our efforts. Our development team then uses this resource as a reusable repository for all reporting requirements. For funders that don’t have a reporting template, we send them our narrative report. If funders do have a specific template, we use its contents to fill out those reports’ forms.

We are also often required to provide financial reports. Reporting deadlines vary widely depending on the grant period, so the timing of the financials we need to share also varies. We proactively work with our finance team to prepare financial reports on a regular basis and have quarterly year-to-date actuals available to share.  

Our vision for the future of grant reporting

Not all nonprofits have the staff capacity to complete onerous grant reporting requirements. We hope we’re helping other nonprofits by sharing what has worked for us, but we also want to encourage funders to help their grantees better achieve impact by decreasing the burden of grant reporting. Here are a few suggestions: 

1. Don’t require a custom template. By allowing your grantees to submit reports in any format they choose instead of using bespoke templates, you get the information you need while reducing the time and effort spent on reporting.  

2. Leverage existing resources. Funders can also leverage existing grantee information on public platforms like Candid nonprofit profiles. They can take on the responsibility for gathering commonly requested information that’s already available to them, like a nonprofit’s address, mission, the demographic makeup of its staff, leadership, and more. When funders take this on, it frees up time for nonprofits, allowing them to focus more fully on doing their mission-critical work.  

3. Make general operating support grants. General operating support grants are easier to report on, especially compared to program grants. Nonprofits don’t have to create separate project budgets, track staff hours spent on specific projects, nor ask program staff to take time away from conducting programs when they’re reporting on general operating support.

4. Make reports due at the end of the fiscal year. For general operating support grants, nonprofits must allocate funding to the year it is received. But funders often have grant periods that span two years. For example, if we receive a one-year grant in November 2023, we must allocate that funding to our 2023 budget from a financial perspective. From the funder’s perspective, the grant period is November 2023-October 2024. This means their reports are not due until the end of 2024, even though the work done using the funding was completed in 2023. Funders and nonprofits should align on the financial implications of when revenue is recognized. This would simplify the grant reporting process so that reports are sent out for the actual period they were used in.  

 
Grant reporting helps nonprofits evaluate their efforts and be transparent. It also helps funders get a better sense of what their funding accomplished and how they are making an impact.  

But as a sector, we need to ask ourselves: With so many problems to solve, is a nonprofit’s time best spent on various bespoke grant reporting forms and questions? If we want nonprofits to focus on driving positive change, it’s time to explore how we can make it easier for them to get their work done while also holding themselves accountable.