A UK study that's crunched the numbers on charities there has found that up to 46% of grants represent a net loss, or to put it another way, cost more than they're worth.
Timetospare, a customer relationship management and case management tool for charities, found that the costs of monitoring, unsuccessful applications, staffing expenses and volunteer time often outweigh the value of a grant being offered.
Using the information made public on 360Giving and CharityBase, Timetospare pulled together the "all in" costs of grant processes.
- time taken to apply
- time taken to conduct impact measurement and other monitoring
- costs to the funder
- costs to rejected applicants
- costs for incomplete applications
The point is that while a grant might be great for the organisation that wins it, the costs to the sector as a whole are significant.
The study found that funder costs are often related to the number of grants, rather than the size, and that the average cost of administering each grant was nearly $6000 per organisation. The total average cost of a grant to the sector was more than $12,000.
Timetospare's main suggestion? Give bigger grants.
And if you're going to divvy out smaller ones, you'll need to slash "costs" for everyone. This might entail simpler applications, giving out more grants with few staff, and "replacing the application process with better reporting".
Read the full blog post and analysis: 46% of grants cost more than they're worth