May 31, 2013
(Steven Green is the director of grants management and administration for the Jim Joseph Foundation, which seeks to foster compelling, effective Jewish learning experiences for young Jews in the United States.)
In many ways, a grantmaking relationship begins with a shared understanding of a budget. This is not to say that grant financials supersede programmatic goals; rather, they are essentially complementary: comprehensive financial reporting, accompanied by a detailed budget narrative, sets a roadmap for an organization's programmatic priorities.
When a funder and a grantee come together for budget reviews, it is an opportunity for them to explore how grantee management of the funding can support efficient implementation of the grant. They can think more strategically about how to achieve their shared goals. For the Jim Joseph Foundation, conversations about timing of grant payments and reporting on grant implementation are part of a relational funder-grantee dynamic. Four key factors, all related to financial practices, can provide the framework for a substantive foundation-grantee partnership:
Pay prospectively. By the time we award a grant to an organization, we have undertaken an extensive review of its mission alignment, fiscal health, leadership, strategy, and prior accomplishments. In addition, the grantee has already invested significant resources in advancing beyond the application process.
As grantees will attest, we request thorough documentation on the projects to be funded. From this information, we gain an understanding of the stages of a grantee's initiative and can anticipate when payments will be needed. We often agree to a payment schedule that provides part of the funding in advance of when expenditures are expected to occur. This practice supports an initiative's growth and progression, and it provides a sense of security for the grantee. Moreover, making selected grant payments in advance allows both parties to focus more on the actual initiative and less on the dollars. (Incidentally, we have a similar relationship with researchers, consultants, and independent evaluators. While we reserve a small payment to be made at the end of each contract, a majority of the contract awarded is paid prospectively. Reconciliation based on wages and expenses occurs at the end of the contract, when a final payment is calculated.)