Grantmaking in a COVID-19 world

As a grantmaker, many of the decisions you face will depend on where your grants are in their lifecycle. Do you have a funding round currently being assessed or opening soon? How will you manage your current grants? Are you considering new grants to specifically respond to the COVID-19 pandemic?

This help sheet will guide you through some of the key considerations at each stage of the grants lifecycle and help you decide on the best course of action for your organisation.

What are others doing? Skip ahead to see examples.

Upcoming grant rounds  or  grant rounds currently under assessment

Grantmakers who have advertised upcoming grants rounds, or who have grants rounds currently being assessed, now need to decide how to proceed.

Possible options include proceeding as planned, redesigning or refocusing programs, or suspending or cancelling grant rounds.

Below are some questions (and possible answers) to consider when deciding how to proceed with your current or future funding round.

Has COVID-19 changed your funding priorities?

What your organisation considered a priority last month may now seem less important. The same may be true of your grantees and decision-makers (councillors; ministers; trustees; etc).

Before taking action it’s important to review your organisational mission and strategy. You need to decide if, in the context of the COVID-19 pandemic, your planned funding round is still a priority. Consider the importance of your planned grants program in the context of your organisation’s mission and relative to any other priorities that may be emerging.

For example, the arts and creative sectors have been devastated by COVID-19 pandemic. Festivals and events have been cancelled and the sector is now battling for its very survival. In response to the crisis, The Australia Council for the Arts recently announced the suspension of its current investment programs, and the introduction of new ones focused on providing immediate support to the cultural and creative sector, with the objective of helping it survive the crisis (see below – ‘Responding to the pandemic’).

You may choose to suspend or postpone your funding round to allow time to re-evaluate your strategy, assess any funding gaps, and consult with stakeholders before deciding on a course of action. The Greater Charitable Foundation recently did just this, announcing the postponement of their 2020 NSW and QLD funding rounds to allow time to consult and consider their response to the COVID-19 pandemic.

A review of your priorities in the context of the crisis may lead you to decide that your planned funding round should not proceed. For example, due to the impacts of COVID-19, the National Health and Medical Research Council (NHMRC) has announced the cancelation of its 2020 Synergy Grants program.

Will the COVID-19 pandemic affect the ability of applicants to apply for your funding round?

Like any organisation dealing with a disaster, community organisations, not-for-profits and businesses are grappling with the unprecedented financial and logistical challenges of COVID-19. Organisations struggling with remote work, increased absenteeism and reduced volunteer numbers may struggle to complete and submit quality grant applications.

If you have decided to proceed with your planned funding round, consider reviewing and streamlining the application process. A proportionate, risk-based approach to application and assessment processes can reduce the burden on applicants, ensure that you still receive high-quality applications and allow you to get money out the door faster.

Macedon Ranges Council recently announced support measures for applicants to their Community Funding Scheme. Council extended closing dates and took a flexible approach to project timelines. Assistance was also provided to applicants who, due to the current circumstances, faced challenges gathering required supporting documentation for their applications.

If you are funding longer-term grants, or grants where continuity of service delivery is a priority, consider if now is the right time to run a competitive funding round. One option to manage risk and reduce administrative burden is to postpone the funding round and extend existing grant agreements until the crisis has subsided.

Is your grant program still fit for purpose?

In a pandemic-affected world, traditional ways of working and project/program delivery may no longer be possible. If you have decided that your scheduled grant round will go ahead, you’ll need to consider if it can be delivered in its current form.

Consider revisiting your program design and updating your program guidelines to account for the COVID-19 pandemic. Some areas that may require revision include:

• Program/project delivery: Do you need to provide greater flexibility and/or guidance for grant recipients to deliver the grant program via alternative means – for example, online/video conferencing etc.?

• Funding amounts and budget flexibility: Do current funding levels account for an anticipated increase in demand for services and any increased costs associated with establishing remote working and service delivery infrastructure?

Consider removing or reducing restrictions on grants to allow grant recipients sufficient flexibility to cover the costs of adapting to a COVID-19-affected world so they can more quickly adapt as the situation evolves (see “unrestricted funding” below).

Managing current grants: assistance for grant recipients 

The community, not-for-profit and business sectors have been severely impacted by the coronavirus pandemic. Economic and public health measures have constrained fundraising and the availability of volunteers, on whom much of the sector depends. It is critical that grantmakers step up and support their grantees, not only by continuing to deliver your programs (where possible), but by helping grantees to build their capability, sustainability, and survive this challenging time.

In recent a survey of 370 US grantmakers by Peak Grantmaking, 97% of respondents said they are considering changing grant practices in response to the COVID-19 pandemic. If you’re all about ‘business as usual’ right now, you’re out of step.

Below are some key considerations for managing current grants.

Engage with grant recipients

There is no one-size-fits-all approach to managing grants through a pandemic. Depending on their size, experience, and the programs/projects they are delivering, every grant recipient will be facing unique challenges. Some may be experiencing an unprecedented demand for their services; others may have seen their client base dry up entirely.

Listening to your grantees and understanding what challenges they are facing is crucial to tailoring your response. Budget to have your staff spend more time supporting/listening to grantees over the next few months.

Take a flexible, constructive and realistic approach

Some grants, such as community events, sports and arts-based performances, are now prohibited. Other projects will struggle to recruit the numbers of volunteers or engage participants that they originally forecasted. By contrast, some grantees will be overwhelmed by increased demand for their services. Grantmakers must work constructively with grantees to develop positive solutions.

Options include varying grant agreements to adjust timelines, milestones, outcomes, key performance indicators and/or payment schedules.

You might also explore changing the mode of delivery for funded programs. If your funding priorities have changed as a result of the pandemic, you may work with current grant recipients to shift their focus entirely to a specific COVID-19 response.

If grant agreements are extended, consider allowing unspent funds to be rolled over into subsequent years.

Build grantee capability

Grant recipients may require additional support to build their organisational capacity and resilience in order to adapt to the new environment.

In-kind assistance or additional organisational support grants may be required to allow grant recipients to:

• Undertake business continuity planning

• Develop essential IT infrastructure for remote work and service delivery
• Use the isolation period to upskill their workforce (e.g. by undertaking online courses)
• Develop/update appropriate organisational policies: for example; pandemic, work health and safety / home-based work policies.

Our Community and the Australian Institute of Community Directors’ Save our Sector campaign has developed a library of capacity building resources to help the not-for-profit sector survive the COVID-19 pandemic. This suite of policy templates and help sheets is an essential resource for grantmakers seeking to support their grantees through this difficult time. ICDA is also offering a range of online compact courses and a Diploma of Governance for not-for profits.

Review current funding

The not-for-profit sector is facing an existential crisis, and more than anything else not-for-profit organisations need funds. Grantmakers managing grants through this crisis should review their budgets and determine their best strategy to financially assist grantees through the pandemic.

Funding-based strategies to support grantees include:

• Additional funding (if budgets allow) to help compensate for reduced fundraising capacity, to account for increased demand for services, to assist in capacity building, and/or to help cover the costs of establishing remote working and service delivery infrastructure.
• Unrestricted funding – Community and not-for-profits are embedded in communities and are best placed to direct funding to deliver outcomes for those communities. The COVID-19 pandemic is rapidly evolving and changing. Unrestricted funding allows grantees flexibility to quickly respond and adapt as the pandemic evolves. It also gives grant recipients continued cash flow, which may be critical to their survival.

• Changes to payment schedules – for example, boosting recipient cashflow by bringing forward future payments.
• Funding flexibility – e.g. not recovering unspent funds or agreeing to carry over unspent funds from previous financial periods (where agreements are extended or ongoing).

Many of the points above relate also to funding for businesses and individuals.

Reduce administrative burden

These are unprecedented times. Many grant recipients are facing a perfect storm of reduced income and volunteers, and increased demand for services. The easiest and kindest thing grantmakers can do to support them is to reduce their administrative burden by postponing, reducing or removing reporting requirements. We recommend you ask as much of grantees as is necessary, and no more.

TIP: Look at every reporting requirement you place on grantees; every single question you ask in your progress and acquittal forms. If you can’t immediately identify a legitimate use for the data that grantees are asked to produce, take it off the form.

Responding to the COVID-19 Pandemic – Rapid Response vs Recovery Grants

Australian grantmakers are becoming accustomed to disaster grantmaking. It seems like only yesterday we were grappling with how to respond to the catastrophic bushfire season that ravaged communities across Australia.

The COVID-19 pandemic is changing and evolving on a daily, even hourly basis. Businesses have closed, millions of people have lost their jobs, and health and other frontline services are being stretched. However, we are only weeks into a crisis that may go for many months. The medium- to long-term social and economic implications of this pandemic are still unknown.

Grantmakers are facing some difficult choices: rush in with immediate relief grants, or take a more strategic and measured approach.

Many of the principles outlined above – communication, flexibility, reduced administrative burden and appropriate funding – are equally applicable when designing your emergency grantmaking response.

The following resources may help you formulate the right grantmaking response for your organisation.

Disaster Grantmaking help sheet

In February, the Australian Institute of Grants Management (AIGM) compiled a detailed and practical help sheet to step you through some key questions (and answers) that will help you to decide on the right disaster grantmaking approach for your organisation. Originally developed to assist grantmakers to respond to natural disasters, the guide is also applicable to the COVID-19 pandemic.

The guide will take you through whether your response grant should exist at all, as well as measures of success, speed of delivery and timelines, structure, collaboration, focus, and decision-making processes. 

The Funding Centre

Our Community’s Funding Centre platform is an invaluable resource for grantmakers scanning the environment and formulating their response to the pandemic.

The Funding Centre COVID-19 page outlines the grants and financial assistance available to not-for-profit organisations and community groups affected by the COVID-19 outbreak.

Funding collaboratives

A recent survey of charitable foundations by the Association of Charitable Foundations (ACF), found that 70% of respondents were “interested in collaborating more with other foundations to tackle the impact of the crisis, either by pooling resources or combining funding processes”.

Collaboration is a great way for grantmakers to coordinate their efforts, minimise duplication and maximise impact.

‘Funding collaboratives’ are an arrangement whereby grantmakers with a shared purpose pool their funds and work together on the development and implementation of a collective grantmaking strategy. Funding collaboratives are especially effective when responding to large scale issues, where the scale of the response required is bigger than any one funder can provide.

This article outlines the benefits, challenges and key considerations for grantmakers considering starting or joining a funding collaborative.

SmartyGrants

Whether you’ve decided on mounting a rapid emergency response or you’re taking a longer-term focus on recovery, SmartyGrants provides an end-to-end grants management solution to fit every grantmakers process. Its intuitive design allows grantmakers to quickly build, launch and assess funding rounds, getting money out the door faster.

As one state government grantmaker told us as the COVID-19 economic disaster unfolded in March: “Since yesterday midday when our grant program was launched we have received over 1800 applications, and so far we have approved about 1200, of which between 600 to 800 will be paid by the end of today.”