Todd foundation aigm presentation lightening the load
- 1. Lightening the Load Measuring and managing the time and cost burden we require from the organisations we fund A presentation to the Australian Institute of Grants Management Conference by Kate Frykberg, Executive Director, Todd Foundation 23 March 2015
- 2. Overview 1. Funders’ dilemmas 2. How we respond 3. Intended and unintended consequences 4. Measuring the unintended consequences 5. Todd Foundation’s journey – Who we are – Discovering unintended consequences – Measuring unintended consequences – Defining the sweet spot – 7 helpful responses Todd Foundation Presentation to Australian Institute of Grantmaking “Knowledge is Power” conference 23/3/152
- 3. Funders’ Dilemmas • So much need • So many causes • So many organisations for every cause • Not enough money Todd Foundation Presentation to Australian Institute of Grantmaking “Knowledge is Power” conference 23/3/153
- 4. Funders’ Dilemmas Therefore…. • How do we fully understand community needs? • How do we ensure funding is open and equitable? • How do we select the best grantees? • How do we know what impact was made? Todd Foundation Presentation to Australian Institute of Grantmaking “Knowledge is Power” conference 23/3/154
- 5. How we respond Response Intended Consequences Contestable Funding Pools • Everyone has a fair shot • Open - not dependent on “who you know” Robust grant application processes • In-depth info to support selection process • Applications can easily be compared Robust accountability and evaluation • Reduces risk of misuse of funds • Builds understanding of impact Todd Foundation Presentation to Australian Institute of Grantmaking “Knowledge is Power” conference 23/3/155
- 6. How we respond Response Intended Consequences Unintended Consequences Contestable Funding Pools • Everyone has a fair shot • Open - not dependent on “who you know” • Low success rates • Competition not collaboration Robust grant application processes • In-depth info to support selection process • Applications can easily be compared • Time and cost burden • Opportunity cost • Burnout Robust accountability and evaluation • Reduces risk of misuse of funds • Builds understanding of impact • As above • Encourages “success theatre and vanity metrics” Todd Foundation Presentation to Australian Institute of Grantmaking “Knowledge is Power” conference 23/3/156
- 7. Measuring the unintended consequences Todd Foundation Presentation to Australian Institute of Grantmaking “Knowledge is Power” conference 23/3/157 Some useful concepts: Funding Burden: Time and costs applicants spend applying for and reporting on grants Net Grant: Money received by a grantee minus funding burden (ie grant - value of the time and costs of applying and reporting) Net Funding: A funders net community benefit – ie the money received by all grantees minus funding burden for successful and unsuccessful applicants
- 8. Net Grant example • You give a $10,000 grant • It takes 10 hours to apply • It takes 10 hours for accountability and impact reporting • At $50/hour, funding burden is $1000 (20hrs @ $50) • Net grant is $9,000 (10k-1k) • Except for unsuccessful applicants… • Who have a net grant of -$500 ($0 granted, 10hrs wasted @$50) Todd Foundation Presentation to Australian Institute of Grantmaking “Knowledge is Power” conference 23/3/158
- 9. Net Funding example • You have $100,000 to give in 10 * 10k grants • You receive 100 applications and award 10 • Net funding for successful applicants is $90,000 (10 applicants who each spend 20 hours @ $50) • Factor in: – Net funding for 90 unsuccessful applicants is -$45,000 (90 * -$500) – Your costs of administering the funding @10%: -$10,000 • Net funding to the community: $35,000 Todd Foundation Presentation to Australian Institute of Grantmaking “Knowledge is Power” conference 23/3/159
- 10. Implications • Time spent serving funders is time not serving community needs • We may be reducing the very impact we seek to make through some of our practices • Funding frustrations are a leading cause of community sector CE burnout • Power dynamics mean we are rarely challenged on our practices Todd Foundation Presentation to Australian Institute of Grantmaking “Knowledge is Power” conference 23/3/1510
- 11. Our journey: Background to Todd Foundation • Established 1972 by New Zealand’s Todd Family • NZ$4.7m given in 2014 • Board: 4 family members, 4 external plus investment board of 4 • Staff of 4: – Executive Director – Strategic Advisor (Family and Community) – Strategic Advisor (Youth and Māori) – Office Manager Todd Foundation Presentation to Australian Institute of Grantmaking “Knowledge is Power” conference 23/3/1511
- 12. Todd Foundation journey: Our vision & funding Vision: Inclusive communities where all families, children and young people can thrive and contribute General Fund: 1- 2 year responsive funding (60%) Partnership Funding: 5-year proactive funding (25%) Special Focus: Christchurch Earthquake Recovery (12%) Scholarships: University and Polytech Research grants (3%) Todd Foundation Presentation to Australian Institute of Grantmaking “Knowledge is Power” conference 23/3/1512
- 13. Processes • One or two year funding (Responsive): – Initial online application (approx. 10 - 15% chance of success) – Short-listing process to invite full proposals (approx. 66% chance of success) – Reporting now in person rather than on paper (Roundtable Reporting) • Five year funding (Proactive): – 3 -5 existing grantees invited to apply each year – 5-year unrestricted funding offered to 3 - 4 grantees, up to 100k per year – Annual gathering to share learnings and additional match funding available for organisational development Todd Foundation Presentation to Australian Institute of Grantmaking “Knowledge is Power” conference 23/3/1513
- 14. Starting to think about funding burden • Clara Miller from FB Heron Foundation introduces concept of Net Grants • Conversation with grantee CE: “having 5 years funding from you frees up at least two weeks of my time per year” • Informal grantee survey: – total management time to raise and manage 100k: 3.75 weeks – total staff time to raise and manage 100k: 1 week Todd Foundation Presentation to Australian Institute of Grantmaking “Knowledge is Power” conference 23/3/1514
- 15. Measuring Todd Foundation processes • Added fields to applications asking how many hours the process took: – 2 hours initial applications – 6 hours brief proposal (previously funded grantees) – 11 hours full proposal (new grantees) – 14 hours for 5-year funding • Measure overheads as a % of total costs: 8.26% • Relationship management approach and regularly seek feedback Todd Foundation Presentation to Australian Institute of Grantmaking “Knowledge is Power” conference 23/3/1515
- 16. Todd Foundation funding burden scorecard 1-2 year funding 5 year funding Average Grant $59,000 $69,000 Av Net Grant $58,000 $68,500 Total Funding $2.44m $1.24m Net Funding $2.37m $1.23m Funding Efficiency 97% 99% Funding Efficiency (inc overheads) 89% 91% Todd Foundation Presentation to Australian Institute of Grantmaking “Knowledge is Power” conference 23/3/1516
- 17. Seeking the sweet spot The challenge: • Open accessible funding AND a reasonable chance of success • Rigourous selection process AND low funding burden pre-grant • Deep understanding of what works and what doesn’t AND low funding burden post-grant Todd Foundation Presentation to Australian Institute of Grantmaking “Knowledge is Power” conference 23/3/1517
- 18. Seven helpful responses • Measure how long to apply and report • Stage the burden – use 2-step process • Share the burden – we can do the leg work too! • Proportionality matters – vary the burden depending on what’s on offer • Combine responsive and proactive funding • Multi-year funding is better for everyone • Re-use or standardise reporting and evaluations with other funders Todd Foundation Presentation to Australian Institute of Grantmaking “Knowledge is Power” conference 23/3/1518
- 19. Final Thoughts • Metrics matter… but • what matters most is the communities we serve • “really your job is to get out there in the community and find out how we can help” (Sir John Todd, Todd Foundation Chairman) • And if we want to be helpful – let’s not inadvertently hinder. Todd Foundation Presentation to Australian Institute of Grantmaking “Knowledge is Power” conference 23/3/1519
Editor's Notes
- #3: Presentation in two parts – first a look at our environment – our dilemmas and responses, the intended and unintended consequences of these and how we measure unintended consequences. Then I’ll share the Todd Foundation journey trying to measure and manage unintended consequences – I don’t pretend to have the answers but I can share the journey.
- #4: Whether we are government, local government or philanthropic funder, our world probably looks a bit like this…
- #5: This environment engenders some common dilemmas for funders:
- #6: Here’s how we typically respond:
- #7: However, our typical responses have some unintended consequences… If you have lots of applicants, the success rate will be low, with lots of time wasted on unsuccessful applications Collaboration is actively discouraged – we say we want collaboration but our actions send the opposite message The shadow side of our robust application, accountability and evaluation processes is that they impose a significant time and cost burden on applicants and grantees, and this is what I will explore further But a quick mention of the shadow side of evaluation – when someone's job depends on proving outcomes it almost inevitable that there will be a positive spin (success theatre) and a careful selection of the metrics that support this (vanity metrics). But that is a different conversation
- #8: Let’s talk about the metrics around the time and costs involved in applying for and reporting on grants. Here’s some useful concepts: Funding burden – I used to call this compliance costs however I think funding burden is a better term. This is partly because a lot of the costs are born pre-grant before there is a formal agreement in place, so not exactly compliance. Also it more accurately describes how grantees feel about this…
- #9: Here’s a hypothetical examples of the net grant concept…
- #10: So now let’s take into account the funding burden of all successful and unsuccessful applicants and consider what our net funding to the community could look like… Does this example seem far-fetched? I am not sure it necessarily is. I talked with one of our grantees a while back who said that a particular government contract they successfully applied for had required more work to get than the value of the contract. In other words, even a successful application can be a negative net grant. Why even apply? “for our credibility, we couldn’t afford not to” I hate to think what the net funding on this looked like…
- #11: Implications: Are we shooting ourselves in the foot? And are we as generous as we like to think we are? There is no market mechanism for determining a successful funder. If grantees are our “customers” – can they easily go elsewhere? Do they even feel comfortable giving us feedback? And if our grantees won’t challenge us, we have to challenge ourselves
- #12: So I’d like to move now from talking about the problem to sharing our journey at Todd Foundation to address funding burden. And I should add that it is a journey we are only just starting. Staff is 3FTE
- #13: Vision is… Four funding streams, but for today just considering the left most two – here’s a bit more detail:
- #15: You’ll see in these next slides I’ve included pictures of the communities served by our grantees, just to keep reminding us about what really matters… Conversation with Anthony… shouldn’t Anthony be out there with the young people he works with rather than fund-raising? This prompted us to check out the time involved through a rough an ready survey of our 5-year grantees – in fact Anthony is understating this. And it seemed to be born out from what little research I could easily find. We found this very sobering.
- #16: Added fields to our application forms asking how long it takes . These are optional fields which we carefully position as being just for our own review of our processes – it is important that people don’t think this is a trick question! Overheads probably a bit understated as we get some in-kind support from the Todd businesses, eg free rent. And we are also lucky that our overheads don’t come from our grant budget but are a separate donation from the Todd businesses
- #17: Here’s our score card for the funding burden we impose on our grantees. The numbers feel OK but because I don’t know anyone else measuring these statistics to be honest I don’t really know. Two things to note here: you can add in another metric called funding efficiency which expresses these figures as percentage. Also multi-year-year funding is more efficient than 1 or 2 year funding. And if the left hand column only included one year grants, the efficiency difference would be considerably greater.
- #18: And if we are measuring funding burden – then we need to define the sweet spot. We are not necessarily looking for the lowest possible funding burden – we are looking for the genius of AND…
- #19: So here is some practical ideas for getting to the sweet spot that seem to work reasonably well. Re sharing the burden – our new grantees spend an average of 11 hours on a full proposal – and we spend about 12 visiting and on the diligence and selection process. We try not to ask more of our grantees than we ask of ourselves.