Is a Quiet Grants Management Revolution Underway?
One of the most interesting discussions during the Grants Managers Network (GMN) conference focused on the evolution of grants management software. Admittedly, this might not seem like the most exciting subject. But grants management software has a tremendous impact on how foundations review proposals and process their grant awards. And based on the discussions that took place at the GMN conference this week, a big change is about to happen – the only true question is whether this change will occur within two to three years or within five years.
The main discussion began when Scott Travasos, CFO for Blue Shield of California Foundation, asked on Twitter whether Fluxx and Saleforce would dominate the grants management software provider field within two to three years. (Sean Stannard-Stockton recently profiled Fluxx, an open source grants management platform developed by the Energy Foundation, on the Tactical Philanthropy blog.) I responded that I thought the barriers to shifting grants management systems were still too high.
Jason Ricci, the project lead for Fluxx, asked me to clarify my answer. I noted that the perception of cost (which may be very distinct from the actual cost), the need to re-train grants management and program staff, and data migration would challenge funders who might want to switch grants management systems. And I’ll add here that this assumes the funders would willingly walk away from significant sunken costs associated with their current systems.
Rebecca Van Sickle, Director of Grants Management at the Atlantic Philanthropies, responded that the pain points with existing grants management applications are high and that even large institutions are now willing to consider a shift. Others I spoke to informally during the conference reinforced this conclusion. The endless frustration funders have had with the existing major historical providers of grants management software – especially with MicroEdge, which dominates the field with its GIFTS platform – appears to be increasing. Disappointingly, the current major grants management software providers seemingly appear oblivious to the growing disenchantment with their products.
As Rebecca further explained, the grants management field only needs a few key foundation to make the transition, which should drop the high expenses associated with adopting a new system, staff training, and data migration I noted earlier. If that transition involves adoption of open source platforms, we could see “a community of developers building product features" that will accelerate adoption.
The GMN community has been demanding innovation for its grants management software vendors for some time. The need for innovation and new thinking that aligns with the evolution of the philanthropic sector (leveraged grantmaking; social impact investments; alignment of grants management, customer relationship management, and financial systems, etc.) is become even more pressing. But, there have been little notable innovations pushed forward since the grants management community began to use online application portals and review systems.
Conversely, Fluxx offers a range of innovations attractive to funders such as its open source architecture, system alerts to improve workflows and internal operations, and capability to better track length of time for the approval cycle. With greater adoption of Fluxx, market incentives might finally develop that will finally encourage the mainstream grants management software providers to innovate and compete. In turn, we could finally see product development that will substantially improve foundations' ability to work more efficiently.
And as Jason Ricci noted, that field-wide adoption will not take as long as five years to happen. Viva la Revolucion!