Establishing Grants Administration Procedures (Foundation Building Best Practice Study Excerpt)

This section explores how to review grant proposals and administer, monitor and evaluate grants. It examines the importance of ensuring fairness, transparency and efficiency.

Example 1: A Full Grantmaking Cycle
Equal Opportunity Foundation (South Africa)
Example 2: Recommendations to the Board, Letters of Acceptance and Rejection
Children and Youth Foundation of the Philippines
Example 3: Guidelines for Grantee Reporting
VITAE (Brazil)
Example 4: A Standardized Project Monitoring and Evaluation System
Foundation for the Philippine Environment

Why Establish Grants Administration Procedures?

Summary Points

Clearly written grant administration procedures help ensure a smooth-running grant program. Many mature foundations have developed a grant administration manual. These manuals cover all elements including proposal review procedures, responses to applicants, grant reporting requirements and grant monitoring and evaluation. They provide a valuable guide for existing and also incoming staff.
The grant selection process should provide the decision-makers (CEO and/or Board) with sufficient information on which to make a decision. In reviewing grant proposals foundation staff usually evaluate the aims, objectives and methodology of the proposed program/project and also the organization's human, technical and resource capacity and prospects for sustainability. It is an advantage if they have first hand knowledge of the institutions and individuals. They then prepare a recommendation for either support or rejection. In some cases the recommendation for support may be conditional on additional information being provided. Where grants in a new program area are being presented, it is useful for the relevant program officer to attend the Board meeting to answer questions.
Grant evaluation should involve staff of the grantee/partner organization and contain recommendations for strengthening the organization and/or program. The evaluation should identify project achievements and also problems encountered and recommended solutions to those problems. If there is high level of involvement of the grantee organization staff in the evaluation process the organization is more likely to commit to taking the steps required to implement the proposed recommendations.
There are no easy answers to the challenge of grant evaluation. Foundation staff need to meet the challenge of developing qualitative indicators to evaluate programs in fields that have proved difficult to evaluate in the past, such as non-formal education, health education, children and youth programs. These should be shared more broadly with the foundation community.

This section focuses on how four foundations have approached the challenge of achieving fairness, transparency and efficiency in their grantmaking procedures. Clear policies and procedures in the application of their resources have helped them to earn reputations for being open and honest. They have found that standard procedures can assist in maintaining essential communication with grant seekers and grantees.

These foundations have established systems to track grant applications, approve proposals, disburse funding, monitor grants and evaluate results. Coupled with a professional staff that has the skills and experience needed to manage the grants program, these procedures can increase the impact of grants by assisting the foundation to identify the best possible grants and evaluate the impact they are having.

Proposal Review Process

Staff of the four foundations in this section are responsible for screening proposals, sometimes with the help of external advisors. They prepare recommendations for grant action for consideration by the board. In some cases, such as the Equal Opportunity Foundation (EOF), this is preceded by a step in which the program officer prepares a detailed recommendation for presentation to the executive director.

It is common practice among the foundations in this section to submit recommendation for grant approval to their boards or board sub-committees. Some boards delegate responsibility for approval of all or specific grants, i.e., below a certain cash limit, to the staff. This is unlikely to be the case at the outset when the foundation is still developing a professional staff since Board members, as trustees of the foundation's assets, are legally responsible for all actions taken by the foundation.

In some foundations the Board elects a program committee or grantmaking subcommittee that is charged with reviewing proposals forwarded by the staff and presenting recommendations for final approval by the full board. The recommendations will vary, but will generally contain concise summaries of proposals, with a recommendation for support (or not to support). Recommendations to support proposals that staff view as linked together in accomplishing a specific objective of the Foundation are sometimes presented as a package for approval. Grant recommendations to the Board are usually accompanied by a statement indicating how the grant would contribute to achieving the goals of the foundation in a specific program area. They will also specify specific targets and objectives to be achieved during the grant period, methods forevaluating the results and indications of potential obstacles and challenges which might affect the results. They may also indicate whether and under what circumstances supplementary funding will be considered.

Monitoring and Evaluation

This section looks briefly at some approaches to grant monitoring and evaluation employed by two foundations: Equal Opportunity Foundation and VITAE. These Examples suggest the importance of having clear, achievable goals for grant activities being supported so that progress can be measured. These foundations have adopted systems that seek to assist the grantee organization to develop its own monitoring and evaluation skills and procedures including standardized forms. Such a participatory monitoring and evaluation system ensures that the grantee receives direct benefit from the process and can use the results to improve the design of the project.

A common procedure used by foundations is to request regular progress reports from grantees. These can be quarterly, half yearly or annually. The foundations usually provide clear guidelines on reporting procedures. Some provide a form to be completed. The reporting guidelines of VITAE are given as one example. The results of these evaluations are useful in informing future decisions on grant renewals.

The staff will not normally present evaluations of individual grants to the board, though in the case of EOF an Evaluation Subcommittee reviews all evaluations. More commonly the staff will review a group of grants in a specific program and present the results to the board.