Aligning Nonprofit and Funder Reporting
A Symbiotic Relationship
Nonprofit organizations are crucial in bridging economic gaps for individuals affected by societal and economic upheavals, whether local, national, or global. Funders of various types identify critical unmet needs and depend on nonprofits to gather and use resources effectively to address these challenges.
Central to the relationship between nonprofits and funders is the need for timely, accurate, and relevant reporting on program outcomes and performance. Effective reporting ensures transparency and provides the necessary public relations leverage for both parties to address current challenges.
The Intersection
However, there is a critical intersection between the reporting required by funding organizations and the reporting needed by nonprofits to ensure they effectively deliver on their mission. Often, funding organizations overlook this intersection, leading nonprofits to invest in additional staff, create unique software systems, and adjust internal workflows without compensation or recognition from funders.
Nonprofits face challenges in meeting funders' workflow reporting requirements while managing their own workflows and developing reporting that enhances their program performance and outcomes for their service recipients.
Nonprofit Reporting Challenges
Several vital issues impact nonprofit program reporting:
Government Funders’ Criteria: Government funders often have specific reporting requirements based on political or identity group viewpoints. These criteria and formats are often developed without considering how nonprofits operate and report.
Program Management Systems: Some government and foundation funders have developed program management and reporting systems optimized for their own needs, making it more difficult for nonprofits to customize solutions to fit their workflows and reporting processes.
Reporting on Unique Instances: Unlike for-profit companies, nonprofits often need to report on "unique instances" of events rather than just aggregate results. For example, they are reporting not only the number of donations but also the number of unique donors broken down by demographics. Most available database systems require significant customization to provide this level of detail.
Manual Data Export and Input: Many nonprofits with significant reporting requirements must export data from their internal systems, reformat it with dedicated staff, and manually input it into the funder’s system.
Funding for Administrative Costs: While some government funders provide allowances for administrative overhead, most non-government funders either do not fund databases and administrative systems or do so inadequately.
Effective Database Strategy
Databases are essential for nonprofits, serving four key functions: capturing information, managing programs, tracking performance, and measuring outcomes. Well-designed database systems can significantly reduce the time and effort needed to manage workflows and generate meaningful reports.
Introducing customizable, no-code database applications like Quickbase® and Claris® has made it easier for nonprofits to create tailored reports that meet different funders’ requirements. These tools allow nonprofits to automate workflows, improve program performance management, and improve overall agency productivity.
Though yet to be common, these systems might eventually allow direct connections between agency and funder systems through APIs or provide funders with direct access to dashboards for viewing performance data. This kind of collaboration could benefit both parties and significantly improve the efficiency of program funding and reporting.
Navigating the Intersection
To effectively navigate the intersection of grant reporting and program performance, nonprofits should consider these steps, which may require new approaches and ongoing patience:
Invest in Custom Workflow Software: Fund for no-code workflow software and train staff to develop and support custom solutions.
Collaborate Early: Work with grantors early to align grantor reporting with agency program workflows and reporting requirements. Show the funders what the agency will need to do to deliver the required reporting and what the agency does to provide the necessary reporting to manage agency program operations.
Explore Direct Connections: Investigate opportunities to connect agency and funder systems directly or provide funders with limited access to dashboards.
Visibility into Infrastructure: Give funders insight into the agency's infrastructure, workflow processes, and systems. Funding for infrastructure and support staff is crucial for effective program deployment. Historically, funders have been reluctant to provide infrastructure funding, viewing it as an administrative expense. However, in today’s environment with complex data tracking and reporting needs, adequate infrastructure is essential for achieving funders' objectives.