Governance

6 new principles for grant reporting

01 February 2019

‘Bureaucratic, time-consuming and misunderstood.’ That was the verdict of a group of charity funders and grantees that recently attended a series of workshops to discuss the state of grant reporting in the UK...

The group had been convened by the Esmée Fairbairn Foundation and the Institute for Voluntary Action Research (IVAR) to explore ways of making grant reporting more meaningful. As a result of the collaboration, a number of the UK’s leading funders are now testing some innovative funding principles.

Ben Cairns, Director of the IVAR, explains: ‘For many years, grantees have been telling us that they find grant reporting burdensome. They spend a lot of time and effort preparing separate reports for different funders but don’t always receive feedback from them. This leaves many charities doubting the value of the exercise’. Whereas there was a general consensus among both funders and grantees that reporting is necessary to meet accountability requirements, there was a pervasive concern that funders were requesting information but failing to make use of it.

Charities with an income of over £25,000 already have a legal and regulatory requirement to report on their activities. Their annual report and accounts must contain a trustees’ report that clearly articulates who they help and what difference they are making. It provides a base level mechanism for funders to perform due diligence on the organisations they fund. Whilst a handful of UK funders only ask for a copy of the annual report, this is rare. Most funders ask for a grant report in their own specified format, which can leave many charities repackaging the same information into multiple different forms.

Although charities are frequently frustrated by the additional grant reporting requirements, the IVAR-led workshops showed that charities saw potential benefits from grant reporting, if done well. As well as recording achievements, grant reporting could open up an important space for reflection and learning. This is important because it is through learning that charities can get better and improve their impact. With this in mind, the workshop attendees sought a meaningful and mutually beneficial experience.

In seeking to improve grant reporting, it was recognised that funders had their own legitimate interests and requirements. For example, whereas a funder reliant on fundraised income may wish to collate particular information for marketing materials, an endowed foundation probably won’t have such a need. As such, a one size fits all grant reporting template was rejected as a viable solution. Instead, the group devised a set of high level principles that funders could subscribe to.

The six high-level principles are:

  1. Funders explain why they have awarded a grant.
  2. Funders and funded organisations are clear about what grant reporting will look like.
  3. Funders are clear about the type of relationship they would like to have with the organisations they fund.
  4. Funders only ask for information they need and use, and question whether they need bespoke reporting.
  5. Funders give feedback on any grant reporting they receive, and share their thoughts on the progress of their work.
  6. Funders describe what they do with the information they obtain from funded organisations.

The principles allow funders to interpret them in ways that suit their particular requirements. For example, one funder might satisfy the first principle by including a written reason for making the grant in their grant award letter. Another funder might meet this principle by having a grant inception meeting with the grantee at which they explain their reasons for making a grant. In both interpretations, the funded organisation should be left in no doubt as to the funder’s broader strategy and what they’ll therefore need to emphasise when reporting back to the funder later in the grant process.

Overall, funders and grantees recognised that the principles were best achieved by moving away from paper based reporting towards a more conversational approach. This allows relationships to develop and trust to be formed, which can facilitate a more open exchange of information and ideas. As such, it opens up space for a more honest assessment of challenges, limitations and failures, which is a necessary precursor to high quality reflection and learning.

The new grant reporting principles are ambitious, but they do have the potential to transform the relationship between funders and grantees. While it is within the power of funders to make these changes, it is noteworthy that prominent funders are now testing the principles. These funders include high profile names such as the Big Lottery Fund and Comic Relief. If the principles can be put into practice, grant reporting may cease to be a burden and become a valuable impact enhancing joint-venture.

To find out more about the funding principles, and to download a copy of ‘New Principles for Grant Reporting’, visit IVAR’s website at https://www.ivar.org.uk/live-project/exploring-opportunities-to-align-grant-reporting/

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Chris Mills

Research Associate at the Institute for Voluntary Action Research

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