Late in 2019, the U.S. government introduced the Grant Reporting Efficiency and Agreements Transparency (GREAT) Act to modernize grant reporting and free up time to focus more on measuring and managing grant programs. Today, nearly two years later, not much progress has been made — there are more grants and grantees, as well as higher costs and little improvement in grant performance or risk management. Grant makers and recipients are still looking for a better answer.
According to TAGGS, the U.S. Department of Health and Human Services has committed more than $1 trillion in grants and other financial assistance in 2021 already – compared with $750 billion for all federal government grants in fiscal year 2019. The driver behind this significant increase is COVID-19.
At a time when making sure every cent is well spent has never been so vital, two predictable things have happened. First, there’s been a spike in administrative costs, eating up as much as 15% of the value of federal government grants. Second, grant managers are struggling to measure performance. According to a survey by the National Grants Management Association (NGMA), more than 75% of respondents indicated that COVID-19 impacted grantee performance, with two-thirds of federal grant managers saying that impact is by more than 5%.
Complexity is the barrier to effective grant management
In theory, grants management is fairly straightforward. But in practice that’s not the case. There are multiple grants from each grant maker with their own specifications, reporting procedures and, often, grants management systems.
The challenge of identifying, applying, administering, reporting and closing out grants can be daunting for the grant recipient. This is especially true for smaller organizations that lack centralized grants teams or even a trained grants manager. To give one example of the difficulties, a survey from the Government Business Council found that only 10% of grant givers say that eligible grantees can always find available grants.
The situation is just as difficult for the grant maker. The reality of grants in government isn’t as simple as a one-way flow of money from central government. State and local government may be the primary grant makers, but they may also outsource to improve the flow of funds. A U.S. state may enlist a city administration to grant a local NGO, for example.
The grant maker still has to develop and award the grant, monitor performance and ensure that the goals are met. The goal of all granting agencies is to move from spending the bulk of their time ensuring technical compliance of the grantee to driving better performance and outcomes from the grant. Evidence suggests we’re not there yet. The NGMA research found that compliance remained the biggest focus of grant manager time and effort during COVID-19.
The need for grant lifecycle management
Managing grants is all about compiling and managing information at every stage in the ‘pre-award’ and `post award’ journey (See figure 1). For many organizations, managing grants relies on a mix of files, folders, e-mail and spreadsheetsto track status of filings, reviews and approvals and to manage and report on awards funds. They build up silos of information that negatively affect the cost and efficiency in administration and the overall performance of the grant.
Figure 1: Grants Lifecycle Management
Source: Children’s Hospital Los Angeles
This collection of disparate tools, decentralized activity and reliance on human initiative and follow through constrain the ability of the organization to effectively manage their grants program. There is no way to gain end-to-end visibility into the grant management process.
Grant managers want to be accountable and ensure they derive maximum value from the grant. That requires a grant lifecycle management solution that helps automate the process as well as the connections and collaboration between the grant maker and recipient. It means using a central platform that captures all grant data to facilitate performance improvement and effective reporting.
Grants Management for Public Sector from OpenText
Grants Management for Public Sector from OpenText™ is a comprehensive solution for efficient end-to-end grants management. It manages each grant from inception to closeout in a coordinated manner and is customized to address the unique requirements of each grant program.
The solution features a low-code platform that lets you create your grants lifecycle management quickly and cost-effectively using pre-defined and customizable templates. By enhancing your grant administration, performance management and risk management capabilities, the solution helps ensure not a cent is wasted.
Learn more about how Grants Management for Public Sector can help your organization.
