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GRANTMAKING LAB REPORT: Grants System Procurement - Myths and Solutions

Grants make up a large and growing part of the Australian economy, representing up to a fifth of all state and federal government expenditure. Millions more is added to the pool by philanthropic, corporate and community foundations, as well as local government authorities.

Grants are big business. Great care must be taken in their distribution and management.

Up until relatively recently, most grantmakers had little choice but to manage their grants processes through a combination of hard copy applications and either an Excel/Access databases or a custom-made IT system - plus a lot of hard yakka.

Submitted forms were typed into the system manually, reams of paper were copied and circulated, and institutional knowledge was priceless - the moving-on of staff could signal a big crisis as knowledge of the particular quirks of the system, not to mention the organisation's background with grantees, walked out the door.

The explosion of powerful, affordable technology has ushered in an exciting new era for grantmakers, offering the opportunity for more efficient, effective and transparent management of a grants program from application to acquittal.

Technology-based grantmaking solutions are now commonplace.

But with more choice has come new risks. How do you know which system is best? Making the wrong decision could have massive implications.

Over the past decade, we have been party to more than 150 grant system implementations by grantmakers of all types and sizes from across the country and abroad. We have seen hundreds of thousands of dollars spent on systems that could have been procured for a few thousand.

We've seen systems implemented that staff can't use and don't like, application forms that drive grantees to distraction, programs abandoned more quickly than it has taken to build them, grantmakers who weep at the lost opportunity for reform and dramatic change.

We now have a pretty good idea what works and what sort of actions can lead to disaster. We offer up the following observations in an effort to save your organisation the pain experienced by so many others. In doing so, we acknowledge our own vested interest and belief in the efficacy of our own cloud-based grantmaking solution, SmartyGrants.

But rest assured that we truly do believe in point number one of our Grantmaking Manifesto - that not one dollar should be wasted on inefficient grants programs and systems. Whether you think SmartyGrants is the solution for you or not, we are passionate about saving you money and time.