How can grantmakers not miss out the smaller not for profits?

Posted on 14 Feb 2023

By Jen Riley, Chief Impact Officer, SmartyGrants

Fish Eating Fish i Stock 1073065046

Small and medium not-for-profits, those that turn over less than $0.5 million and less than $3m a year respectively, do it tough when it comes to getting grants. They can’t afford dedicated grant writers, and with more and more grantmakers (rightly) requesting outcomes information, many are throwing their hands up in defeat and no longer applying for grants at all.

This topic was raised at the Social Impact Measurement Network Awards, held in December 2022, when the question was put to the expert panel: are small organisations going to miss out because only larger ones have the resources and expertise to measure and evaluate outcomes?

The expert panel – made up of myself; the group head of social impact at Lendlease, Edmund McCombs; and the chief operating officer of the Whānau Ora Commissioning Agency, Awerangi Tamihere – all agreed that yes, smaller organisations could be seen to be at a disadvantage, but we also agreed that grantmakers had a crucial role to play in keeping them in the mix.

But why bother? Why should this matter for grantmakers? What is special about the smaller not-for-profits?

Local not-for-profits are typically embedded in communities. They work and live locally, and they know what works (and what doesn’t) in a local context. They have good connections: they know the movers and shakers in the area, and they know the other local organisations that are working in the same or complementary fields.

Larger NGOs undoubtedly have a role to play in your funding mix too. Their reputation for delivering successful services is well established, they have wide reach, and they have considerable internal expertise when it comes to measurement, evaluation experts, research, policy and so on. But smaller organisations tend to be more nimble and more innovative. They typically employ local community members and are well suited to acting as first responders in emergencies or when local conditions change.

So how can grantmakers ensure that small and medium not-for-profits continue to apply for funding and play a valuable part in your agenda of social or environmental change?

Here are some suggestions:

  1. Make sure smaller organisations (indeed, all organisations) have the funds to do measurement and evaluation. We recommend that 10% of all grants should be spent on measurement and evaluation, so the size of the organisation should not matter, so long as the measurement and evaluation requirements are proportionate to the size of the grant.
  2. Keep measurement as simple as possible. If you’re making a small grant, consider what is appropriate for that 10% figure: don’t request a case study and an impact report and a social return on investment report if the funding won’t cover it. And don’t reward an organisation with a grant for overpromising on the reporting side.
  3. Think about collaboration. Is there a way some of your smaller funded organisations might share resources? For example, a grantmaker could facilitate a conversation between grantees so one organisation develops a survey template and the other a semi-structured interview schedule, for example.
  4. Look at your grant application and reporting requirements through the lens of a smaller organisation. Imagine the time-strapped program manager sitting down to complete the form. How can you make it simpler? Rather than asking “What outcomes do you track?” and providing a big white box to be filled with 500 words, provide a drop-down list of some of the outcomes that could be reasonably expected for a program. The SmartyGrants Outcomes Engine has this functionality; check to see whether your grant management software has a similar tool.
  5. Look beyond the smart language, the high gloss and the big promises of large organisations’ reports and analysis, and think about who is best placed to deliver the outcomes you want. Who has the relationships and the local track record? Who is going to provide an honest account of what is really happening on the ground and offer genuine reflections on what worked well and what could be improved? You might find that smaller organisations are able to share some really great insights with local context and history.

It is important that as we increasingly insist on outcomes measurements, we don’t marginalise small and medium organisations in the process. Small, medium and large not-for-profits all make up the rich fabric of civil society in Australia and globally, and grantmakers have a responsibility to ensure that organisations of all sizes get a “fair go” when applying for community money.

More information

About the Social Impact Measurement Network Australia awards 2023

About the SmartyGrants Outcomes Engine

More SmartyGrants Tools & Resources

Sign-up to our newsletter