Choosing and implementing a grants management system

1. It's not a technology project 

• Adopting a grants management system is a chance to get your grantmaking process right from beginning to end. The technology is there to support the process, it’s not the process. 

• Don't give vendors a list of features the system must have. Instead, think about the outcomes and benefits you want for your organisation and its stakeholders. Different vendors may have different ways of achieving those outcomes. 

• List the tasks you do day to day with grantees, donors and the community, then let vendors explain how their systems could help you do them faster, more efficiently and with better data. 

2. Challenge "we've always done it this way" thinking 

• Copying what you already do can limit what you're able to achieve. Keep an open mind. There may be ways of grantmaking you haven't come across yet. Emerging technologies, such as artificial intelligence and data-matching tools, may offer a chance to rethink how you do things. 

• Where there’s a mismatch between the tech and your current ways of working, consider changing your process rather than changing the system. Customising software can be complex and costly, and can cause delays. Systems are usually designed around what most funders ask for so there’s a good chance you could achieve your outcomes anyway by bending your processes. 

• Look for tools that support customisation of existing software (preferably without vendor intervention), rather than contemplating a custom build. This will save you a lot of time and money. 

• If you map out your processes, don't treat the map as a "bible of requirements." Vendors may show you another way to do the same task, which can cut the complexity, time and cost of getting the system set up. 

3. Plan backwards from the reports you want 

• Picture your perfect report. What would you like to tell your stakeholders or community? What would you like to report about impact and outcomes? Work backwards from that report to decide what data you need. This will shape your application forms, the questions you ask, the evidence you collect and how it all fits with your strategic plans. 

• If you start with the forms you've always used, you may not collect the data you need for better reporting later, so think big when you’re planning. 

• Avoid the "like-for-like" trap, such as copying every field of a "master spreadsheet." Moving to a new system offers a rare chance to rethink what you'll need in the future. 

4. Design with your beneficiaries 

• Use the new system as a chance to design the process with your beneficiaries. Check that the time and effort you ask of applicants suits the size of the grant. Make sure your criteria and forms are clear enough that people don't waste their time. 

• Honest feedback can be hard to get, because very few funding recipients want to "bite the hand that feeds them." If needed, bring in a third party so people can give honest or anonymous feedback. 

5. Don't underestimate data migration 

• Old data can be a real mess. It may be in lots of different formats, have gaps, or not be ready to move into a new system. Organisations consistently underestimate the time and effort it takes to get old data ready to move. Moving your data is a chance to deal with your "data debt": clean it up so it's useful and consistent for future reporting. It's not simply a copy-and-paste job.  

• Consider archiving rather than moving your data. If you don’t need to refer to legacy data often, consider holding it in an archive rather than importing it into your new system.  

6. Getting people to use your new system is what matters most 

• People don't like change, especially teams who have worked the same way for a long time. Bring people on the journey and help them see the benefits of the new system. 

• Encourage "playful exploration." A trial account with made-up data gives people a safe place to train, test settings and experiment, with no risk of exposing private information. 

• Base your training on the problems people face. Find out where staff spend their time and which tasks are hard or tedious. Then show how the system helps, always focusing on the benefits. 

• Having champions for the change (power users; enthusiastic early adopters) can help show the rest of the team how to work with the new system. 

7. Choose a system you can easily change yourself 

• If only the vendor can change the system and every change costs money, it's hard to "test and learn." Choose a system that allows customisation without vendor intervention. 

• Leave behind the “set and forget” mentality. Your system should be reviewed and amended after each round.  

8. Security and data management 

• Think about exactly how your data will be managed and stored, and who should be allowed to access it. Find a system that allows you to lock data down tightly, with different levels of access. The challenge is keeping it secure while still letting the right people see the information they need to do their jobs. 

• Aim for a system that makes data useful without having to export it between systems or leave files lying around while they're being moved. 

9. Payments and your finance system 

• Grants systems don't usually connect directly to the bank. They usually connect to your accounting software, such as Xero or QuickBooks. The grants system passes payments to the accounting software, and the accounting software connects to the bank. Payments should be reconciled in your accounting software, because that's your main source of financial reporting. 

• Integrations can be fiddly to maintain. If you don’t need an integration, or you don’t have someone techy on staff who can managing it over time, consider manual reconciliation instead.  

• Where you do set up an integration with your finance system, the aim is to get as close to a "one-click" process as possible. 

10. Key takeaways 

• Treat implementation of a new grants management system as a chance to change. Start with a fairly clean sheet of paper and question everything. 

• Talk to different vendors. Tell them the outcomes you want, the problems you have and the benefits you're after for your own organisations and the communities you serve. Let them explain how they've solved those problems before. 

• Lock down the system last. Your process comes first, along with your programme guidelines and designs shaped by beneficiaries. Then set your requirements and let vendors respond. 

• Work it out with vendors. Agree together what's practical and what's the most effective, cheapest and simplest approach. If you can discuss functionality and pricing openly with vendors prior to or after or in place of holding any formal procurement, you’re likely to achieve more budget-friendly and impactful results.