Background

Grantmakers take their responsibilities to support nonprofit and other public-serving organizations seriously, and spend considerable time thinking about how they can be most effective. Stories of highly productive, warm, and mutually satisfying partnerships between organizations and their funders abound. Yet the grantmaking process is rife with inefficiencies, and these inefficiencies mean that everyone is wasting time and money that could be devoted to accomplishing missions.

Most funders prefer, or even require, that grantees seek funding from multiple sources, and with good reason. Much like an investment portfolio, a diversity of funding sources increases the fiscal health of nonprofits and reduces the risk.

Therefore, most grantseekers juggle multiple funders, each of which has a distinct set of questions, a separate grantmaking cycle, a different budget form, individual online or hard-copy systems, and page, word or character specifications. Add in a myriad of requirements for how demographic data is to be represented, activities evaluated and results reported. Imagine this scenario replicated in thousands of nonprofits responding to thousands of foundations, and it becomes easy to see how the sector’s grantmaker-specific practices might interfere with the efficient flow of funding to address community needs.

Nonprofit leaders are beginning to voice their frustrations. In Daring to Lead 2006, from CompassPoint and the Meyer Foundation, researchers found that a substantial proportion of nonprofit executive directors are deeply frustrated and fatigued by institutional fundraising, “both the logistics of the process and the influence that funders exert.” This exhaustion contributes to high burnout and turnover in nonprofit executives.

These barriers confront the combined third sector (philanthropy and nonprofits) with an effectiveness paradox. Foundations strive to increase their own impact, in part through specialized application and reporting practices. Many feel that they cannot be responsible stewards of philanthropy’s resources without requiring significant and customized information from nonprofit organizations. But multiplied by thousands of grantmakers, these practices place a heavy burden on organizations seeking funding by hampering their ability to be ultimately effective in their missions. Most foundations don’t fully appreciate the extent and consequences of these inefficiencies. The rising number of those that grasp the problem struggle with how to solve it.

Compounding the problem is philanthropy’s diversity of purpose and operations, which makes standardizing practices across foundations highly difficult. As the saying goes, “If you’ve seen one foundation, you’ve seen one foundation.” More than 71,000 grantmaking organizations operate in the United States. With so many funders operating in so many unique ways, it is no wonder that efforts to improve practices tend to be localized. Yet grantmakers can no longer afford to let fragmentation derail the sector from doing something about these practical obstacles to nonprofit efficiency and effectiveness.

With this in mind, eight organizations representing grantmakers and grantseekers came together to form Project Streamline, determined to address the great waste of time and energy that frustrates efforts to serve those who are the ultimate recipients of the funding.

Read more about Project Streamline’s Accomplishments to Date

Join us in this effort today!