Giving Compass' Take:

• PEAK Insight Journal gives us some pointers for more effective reporting in the grantmaking process, including stating purposes in a clear, concise way and finding better structures.

• Reporting can often be a burden for funders and grantees alike, but establishing a more effective format could be a game-changer. Any organization struggling with communications would do well to take these guidelines to heart.

• It's also worth asking this question: Since grant reports are broken, are they even worth trying to fix?

What if we told you that one of philanthropy’s most ubiquitous practices is nearly always a burden to nonprofits and a disappointment to funders?

The biggest news from PEAK Grantmaking’s survey of grant reporting practices in the field might be the extent to which survey respondents are not satisfied with the way reporting is implemented and used.

Indeed, we could argue that grant reports are set up to fail. Often conceived as an opportunity for organization-wide learning, their insights rarely make it off the desk of individual program officers to inform grantmaking strategy or advance grantee goals.

Rather than serving as a launching point for meaningful dialogue and support, Lisa Ranghelli from NCRP suggests — at least from the grantee perspective — grant reports often disappear into a mysterious void. And even as an “accountability tool” — often cited as the core purpose of grant reports — our survey and field conversations suggest reporting is an imperfect, often disregarded measure of grantee progress.

We did find bright spots of intentional, sensible, streamlined, innovative reporting practices. They are out there but appear less frequently than they could or should.

Based on what we’ve learned from those bright spots, from hearing the concerns of grantees, and from the survey of current and desired practice, we offer conceptual and concrete recommendations for making reporting more useful and less burdensome — for grantmakers and grantees.

1. Clarify the Purpose

Grant reports are rarely a legal requirement, which means funders have an opportunity to think deliberately and creatively about why they ask for reports and how they use them. We urge funders to ask this question: Why are we requiring this report?

2. Choose a Smart Structure

When it comes to reporting structure, funders almost always default to a narrative and financial report, according to the survey. We think that’s a mistake. Once the purpose of reporting is clear, funders can think about how to get the best possible information.

3. Share Learning

If a report falls in an inbox and no one ever talks about it, did it really make a sound? Our research this round affirmed what PEAK Grantmaking and others have learned in the past: most funders do not share more broadly what they learn from reports. It is a waste of time to require a report, then do nothing with it but check a box.

Instead of throwing up our hands (and throwing reports into files!), try this instead:

  • Talk with the grantee. Ask questions, make connections, and learn about your impact from those doing mission-centered work inside communities.
  • Share the answers, connections, and ideas with foundation staff and board, emphasizing learning and engagement rather than compliance.
  • Discuss what staff and board learned and how they engaged with other funders investing in similar issues or operating in the region.

Remember: reporting is nearly always optional. You have the power, perhaps even the obligation to shape your reporting process to make it purposeful and meaningful. What’s stopping you?

Read the full article about recommendations for better reporting by Jessica Bearman and Elizabeth Myrick at PEAK Insight Journal.