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Grants management: The multi-million dollar case for change

Standardising operations, shared services practice and organisations to execute them could drive savings across all grant programmes.

Overview

All around the world, vast sums of money pass through incredibly complex systems of grant management. Managed grants provide funding to a broad spectrum of activities—ranging from health to the arts and from transport to the built environment. With each subject having unique characteristics and qualities, specialists determine the best way to spend the money available from grant programmes.

Each area of grant funding usually has its own separate processes that handle all aspects of a grant programme, from applications onwards. Yet the basic management activities of any grant programme are fundamentally the same. It’s hard to tell precisely how much this duplication of activities costs. What is clear, however, is such that even the smallest improvement would free-up significant amount of cash to spend on the intended purpose of grants. This could be achieved without increasing overall spending on administration.

BACKGROUND

While the activities they fund may require specialised knowledge, there’s nothing ‘special’ about grant management processes. The complexity and variety of grant funding around the world makes it near impossible to come up with any estimate of costs that is more accurate.

Grant monies will go from entity to entity, with each applying their own administrative processes and some acting as both recipient and provider of grant.

Because each programme serves a different need, the systems that have grown up around each area often lead to a separate bureaucracy for each grant programme. The result? Programme managers spend a disproportionate amount of time focused on the administration of the grants under their purview, rather than being able to spend their time making sure that the grants they award have the highest possible impact.

KEY FINDINGS

To date, proposed solutions to address this have been largely unsuccessful or are in the early stages of having an impact and there is more to be done. The opportunity to improve, however, offers a substantial reward.

Standardising routine operations across grant programmes and using shared services practice and organisations to execute them could drive major savings across all grant programmes. By using a single set of systems and tools it should be possible to create a dedicated organisation that would transform the efficiency of grant administration – and free-up grant specialists to focus their talents on spending funds as effectively as possible.

ANALYSIS

To achieve it requires establishing a shared service approach that covers three main areas:

Standardize and stabilize operations with common case capabilities
  1. Standardise and stabilise operations with common case capabilities

    • Technology assisted, compliant contracting activities

    • Measurable operational workflows (receipt to review to approval)

    • Automated financial system integration

    • Common financial processes

Increase efficiencies
  1. Increase efficiencies

    • Improve internal operations: change and process improvement, outsourcing

    • Provide grantees with self-service tools

    • Spend forecasting to level organisational workload

Increase program impact
  1. Increase programme impact

    • Measure programme outcomes: baseline and track programme impact

    • Get the right grants to the right people: using marketing, analytics, and grantee collaboration

    • Catch non-performing grants: analytics and workforce realignment

RECOMMENDATIONS

No excuses for inaction

The case for change is, or should be, self-evident. Even the smallest improvement in efficiency would have a major impact in releasing funds back for investment into key areas of citizen services that grants support. Shared service solutions are proven and already demonstrating benefits across broad areas of public spending. Governments need to re-examine grants administration and start to make changes. With budgets squeezed in every area of public service, the remit and opportunity to do more with less are clear. A decisive response is needed.


Authors

Mark Howard

Mark Howard

Global Public Service Administration and Regulatory Lead

 


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