This article is part of Propel Philanthropy’s Collaborative Media Campaign to increase awareness about the need for social impact infrastructure building.
Funding third sector digital infrastructure projects is not only necessary, it is incredibly urgent, as it can enable massive efficiencies in traditional processes. For example, by using and sharing data to streamline grantmaking administrative processes, we can release hundreds of millions of pounds that could be so much better spent on beneficiaries.
Advances in technology have made it possible for grantmakers to use and share data through the entire grantmaking process from grant strategy development, through application processes and due diligence, to monitoring and evaluation.
Using data for strategy development
Masses of granular data on social needs are published by governments and other bodies. This allows for more informed grant strategy development, based on real data and needs, avoiding wasteful mistakes. For example, a major UK grantmaker decided to allocate 25% of their grants to charities serving black and minority ethnic (BAME) communities. But the percentage of BAME populations in communities across the UK varies from 40% to 2%. So rather than blanket allocation across the UK, by using published data, this grantmaker could have allocated resources more effectively, focussing on areas with a high proportion of BAME residents.
Sharing data for grant applications
The traditional grant application process imposes significant administrative burdens on charities. Research from the University of Bath, UK (Source: Brevio and University of Bath Research Study 2019) found that £1.1bn is spent annually just on the staff costs of UK registered charities searching for eligible grants, and filling in different application forms for each possible grant. 66% of these applications fail. By sharing grant application data, conforming to agreed data standards, both this spend and the high failure rate could be significantly reduced. Online matching platforms which provide the solution to this problem already exist in the UK, such as Brevio. Similar platforms could be created elsewhere, bringing about massive savings worldwide.
Sharing data for due diligence
Grantmakers capture large amounts of data from charities, both to check for eligibility and for compliance with charity accounting practices. As well as the funding proposal, this data can include standard, publicly available information such as IP address, biometric markers, stated reserves and income on application (compared with information on annual accounts) bank details, online presence, adverse media checks on trustees, etc.
If grant-makers shared this data, they could save themselves, and applicants, both time and money. In addition, grantmakers could share incidences of fraudulent applicants and promote best due diligence practices in the sector. The funds saved through these practices could be directed to beneficiaries
Monitoring and evaluation
Nearly all charities receive project funding from multiple grantmakers, often five or more. All these grantmakers require separate monitoring and evaluation data. The costs to non-profits of providing multiple monitoring and evaluation reports, with basically the same information, is probably similar to the cost of researching and applying for grants in the first place. Sharing these reports could similarly reduce waste and provide significant benefits to non-profits and their beneficiaries.
Conclusion
It is crucial that we continue to invest in developing digital infrastructure that enables the sharing of data. This will enable us to embrace positive changes to existing processes and significantly reduce the enormously wasteful administrative burdens faced by grant-makers as well as non-profits. This massive waste of resources could and should be redirected to the beneficiaries that we are committed to serve. Failure to adopt these changes means grant-makers and non-profits will continue to waste hundreds of millions every year, in the UK alone. Globally the figure will be much higher. Therefore, we need to prioritise funding for infrastructure – the benefits far outweigh the costs.
Marcelle Speller, Founder & Chair, Brevio
Marcelle Speller OBE co-founded Holiday-Rentals.com in 1995. Its sale in 2005 enabled her to found and fund social impact infrastructure projects in the UK. Firstly LocalGiving, an online donation platform for charities which has, to date, raised over £30m. It took 9 years to make it sustainable, then Marcelle handed control, without charge, to the foundation which continues today, providing a fundraising lifeline for thousands of local charities.
Having witnessed the frustration and waste with traditional grantmaking, Marcelle’s next venture is Brevio, a non-profit social enterprise and award-winning B Corp. Brevio’s mission is to encourage the use and sharing of data via an online matching platform and thus divert some of the £1.1bn spent on grant applications in the UK to supporting charities. Brevio’s development has been exclusively funded by £3m of Marcelle’s personal philanthropic budget. She is currently forming a cross-sector steering group to encourage the adoption of various digital infrastructure solutions throughout grantmaking in the UK.
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