Benchmarking basics

What is benchmarking?

Benchmarking is looking at what you do and comparing it with best practice for your industry or function. It is a process that is used to measure various aspects of any given function against a suitable comparison. It can help you to draw conclusions about:

• how your organisation rates in terms of best practice;
• what comparative measures you and others are using, and why;
• what you can learn from others and what you can share; and
• what you might need to change to move towards best practice.

Where do I start?

The easiest way to start is by commencing a pilot project to explore a single aspect of grantmaking. This will help to test whether benchmarking is an effective tool for you.

It's often hard to work out who to benchmark against, so start simply by looking at a best practice model either for your industry or for grantmaking overall.

In 2013, the Australian National Audit Office published a guide called Implementing Better Practice Grants Administration. You can use it to look at the mechanics of your programs and establish whether you are managing issues related to probity, governance and the audit trail appropriately.

Once you're ready to move beyond the basics, probably the best approach is to look at what other grantmakers do. You may have contacts already, or you might identify some at a conference or through the Australian Institute of Grants Management.

What information do I need?

To plan for and implement benchmarking, you'll need to collate some information:

1. A description of your benchmarking project, covering what you hope to achieve, who or what you will measure against and what you plan to do with the results;

2. A list of the standards or organisations you will benchmark against and why you have selected them;

3. A template outlining the type of information you wish to gather. It is best to give the people you are meeting with a chance to prepare by providing them with an idea of the information you are looking for.

4. A background document summarising your programs, noting what you think you do well and what you plan to improve. Exchanging such information with other organisations can be very useful. Your background document might cover the following (this list is by no means exhaustive):

• Commencement date for each program
• Funding available and funding priorities
• Number of projects funded since inception, and funding allocated
• Frequency of funding rounds
• The number of staff involved (this may be a mixture of full-time, part-time and casual roles expressed in full-time equivalents or FTEs) and approximate salary levels
• Brief outlines of processes related to application, assessment, decision-making, funding agreements, reporting, monitoring, payments, acquittal and evaluation
• Who makes the decisions about what is funded
• Operational parameters; for example:
• Whether funding provided is seed funding, limited outcome funding or core funding
• Whether the grantee is expected to share outcomes with others
• Whether the grantee has rights in relation to copyright and intellectual property
• Whether the applicant is expected to measure results
• Whether there is a requirement for marketing or launching results
• Whether there is a requirement for broader implementation
• Whether staff are available to assist applicants and at what level (eg. provide a yes/no answer after submission; provide limited assistance to ensure project eligibility; provide pre-submission feedback on applications via phone or email or in person)
  • Measures used to weigh proposals against each other (eg. raw scores, weighted criteria, essential or desirable documentation)
  • Contract type (eg. short- or long-form contract; agreement; informal arrangement) and enforceability measures
  • Reporting requirements
  • Monitoring and payment practices
  • Financial acquittal requirements (eg. statutory declaration, signatures, receipts)
  • How the project is evaluated and by whom
  • Whether results of the project are made public and by whom
  • How the program is evaluated and by whom.

How do I use the information I've gathered?

What you learn from benchmarking will assist you to improve your programs, but this will take time. Plan what you want your program to look like in five years, and set some goals along the way. Make your first priorities the things that will make the biggest difference.

SmartyGrants users have access to the Grantmakers Toolkit, a best practice guide to assist you to build, review or refresh a grants program. The Toolkit is built upon the SmartyGrants principles of best practice grantmaking and is designed to be both universal and scaleable. Whatever type of grantmaker you are, the Toolkit will help you design, develop and deliver the best possible grants program.