Building stronger communities, one grant at a time

Each year governments, universities, foundations and the private sector give out billion of dollars in grants. Much of that money goes to community organisations, but Simon Herd says the process of giving grants can be wasteful when it’s done poorly.

What’s easier than giving out a grant? You just get a pot of money, pile it in a heap, ring the bell and stand well back.

No matter your skills or experience, it’s almost impossible for the giver of the funds – the “grant maker” – not to do some good.

Of course, as Aristotle pointed out, there are some complications: “To give away money is an easy matter … and in every man’s power. But to decide to whom to give it, and how large and when, for what purpose and how, is neither in every man’s power nor an easy matter.”

It’s not just a matter of doing good in whatever field that the grant program is focused on. The money passing through the grant maker’s hands is only a means to an end. The grant must do the most good possible.

This is not an issue at the economic fringes. Grants in Australia are big business. It’s hard to get a really accurate figure, but we estimate that somewhere between $15 billion and $45 billion is given out by state and federal governments in grants each year. And you can add to that another sizable chunk coming from philanthropy and other forms of grant making.

Much of the money that’s given out in grants goes to community groups – organisations working to provide social services or to improve the environment or to enhance business opportunities or to strengthen social cohesion. And that figure’s rising as the philanthropic pie grows and governments pass off more and more of their responsibilities to not-for-profit organisations in the (often very accurate) hopes that they can get the job done cheaper and better.

At the Australian Institute of Grants Management (AIGM), we’re working on new ways to help grant makers make more of their money. Through our parent body, Our Community, where we work with tens of thousands of community groups across the country, we’ve come to appreciate how mind-blowingly wasteful grant making can be when it’s done poorly. And we’ve seen the incredible transformative power it has when it’s done well.

Recent AIGM initiatives have included the introduction of a new online grants management system, SmartyGrants, which we are using to help grant makers save time and money, as well as to drive standardisation across grant making sectors and to encourage best practice reforms.

We’ve also produced a Grantmaking Manifesto, which sets out a change agenda for grant making individuals and organisations, and a Grantmaking Toolkit to help them put those reforms into place. We produce and disseminate a quarterly newsletter on emerging practices in grant making across the world, Grants Management Quarterly, and earlier this year, we announced the winner of the inaugural Grantmaker of the Year Award – an initiative that uncovers and celebrates the leading lights in grant making today.

The AIGM is also working on ways to make it easier for grant making organisations to spread the word about their work, in the belief that a success that nobody knows about is a failure; and a failure that nobody knows about is a failure that’s destined to be repeated next week somewhere else.

Grantmaking is big business – a multi-billion dollar business. We can’t afford to muck it up.

Simon Herd is the Australian Institute of Grants Management’s (AIGM) Director of Grantmaking Reform. He is currently applying his longstanding interest in philanthropy and grant making to the development of the SmartyGrants grants management systems.