Comparing Grant-Management Software

At first, it wasn't an easy decision for Bonnie Ballinger, executive director for the Barry Community Foundation in Hastings, Michigan. But three years into its existence, the foundation's annual giving had already surpassed $45,000 to more than 40 grantees. So Ballinger decided to take the advice of more established community foundations and make the leap from the "old" way of managing grants -- a combination of spreadsheets, databases, word-processed documents, and calendars -- to Community Pearl, a grant-management software package from Bromelkamp Company. "It's perfect for us," Ballinger says. "It is sophisticated enough to track all of our grant operations and financial transactions, but it is simple enough that I can very quickly show any of our 50 volunteers how to use it."

Ballinger also likes it because it's based on Microsoft Access, which means it works with all of the foundation's other Microsoft Office applications. "It seemed like a lot of money at the time, but it has saved us countless dollars in terms of staff time and efficiency." For foundations like Ballinger's, this is an increasingly common dilemma: Stick with the old way of managing grants or pay for computer-based systems specifically designed to help philanthropists manage their grants.

Most foundations are not yet motivated enough to make the jump to grant-management software. "Many of our members already use some form of technology-spreadsheets and databases, for example, to manage their grants," says Charles Scott, CEO and executive director of the Association of Small Foundations. "But only 560 of our 2,800 members have gotten into these grant-management packages." The main reason, says Scott, is their cost. "Most foundations would much rather spend money on their grantees than on themselves," Scott explains. "Until foundations believe that these applications can help their grantmaking so significantly that they ultimately help their grantees, the market will remain largely untapped."

The main advantage of grant-management software packages is the way they integrate and streamline a number of computer-based processes. Think about just some of the processes involved in grant management -- creating grant applications and criteria, publicizing grants, accepting and reviewing applications, notifying applicants, making grants, tracking funds, and tracking progress -- and you can understand how software integration could save time and money. The more grantees a foundation adds, the more compelling the argument for integration becomes. And for any foundation manager, the ability to track the status of every grant at any given moment is positively mouth-watering.

While no two grant-making programs are identical, the best ones integrate a full range of computer processes (word processing, spreadsheets, e-mail, accounting, and report generation, among others). Many are Internet-enabled (to facilitate sharing), and/or modular (so they can be customized). Two companies currently dominate the industry, thanks to their years of experience, hundreds of clients, generations of software -- and a little friendly competition. The two are MicroEdge, Inc., maker of the popular GIFTS program, and Bromelkamp Company, maker of the Pearl line of grant-management software. But while these two companies may be the best-known, there are several others who offer similar products -- proof that the market is growing.

"The current market is mainly made up of larger foundations willing to spend money to streamline their grantmaking," says Todd Cohen, editor of the online Philanthropy Journal and technology columnist for the NonProfit Times, "and not just to track whom they're giving money to. Some forward-thinking grantmakers are using technology to measure the impact of their grants." As an example, Cohen cites a partnership between Community Foundations of America  and B2P Commerce Corp , a Chicago-based software company [See Philanthropy, July-August 2002 , for more on B2P.] Together, they have created and are testing an application called ImpactMgr, designed to measure the effect that grants have on the communities they serve.

Some of these larger foundations are also integrating their Web sites with their grant management. "We're seeing an interesting convergence in the market," says David Goldsmith, vice president of strategic development for Interactive Applications Group ( iapps), an Internet services firm specializing in support to nonprofits and foundations. "Foundations are realizing the benefits of integrating their back offices (grant management, accounting, tracking, and so on) with their front offices (Web sites, grant applications, and reporting)," says Goldsmith. "This seamlessness is greatly facilitated by the Internet." In fact, the convergence of grant-management software and Web functions has led iapps and MicroEdge to form a strategic alliance so they can cross-market their services.

MicroEdge, a wholly owned subsidiary of Advent Software, is the industry leader, with more than 1,600 clients using various versions of GIFTS and over 300 additional clients using software from its subsidiary NPO Solutions . Though MicroEdge was founded in 1985, it really took off in 1994 when it produced the first reliable, Windows-compatible grant-management software: GIFTS for Windows.

Now, according to Goldsmith, "GIFTS has a virtual monopoly on the market for large private foundations and corporate donors." MicroEdge also has a version of GIFTS for smaller organizations called Essential GIFTS. A demo version is available for download from MicroEdge's Web site. With its April 2001 acquisition of NPO Solutions, MicroEdge was able to gain further ground in the small foundation market.

According to Goldsmith, MicroEdge's chief competition comes from the Bromelkamp Company . Bromelkamp has been around longer than any of its competitors; it began producing grant-management software in 1979. Bromelkamp products-which include First Pearl, Community Pearl, Pearl, and Pearl Loan Servicing-are based on Microsoft Access but are customized to each foundation's needs. In addition to its experience, Bromelkamp's main advantage is that its software can be easily modified by the end-user.

While Bromelkamp and MicroEdge lead the way, there are four newcomers (Arlington Group, CyberGrants, Dyna-Quest Technologies, and Digital Footbridge) that are having an impact as well. Taken together, these four offer a wide range of services, platforms, and costs, described in the chart.

Before making an investment in grant-management software, philanthropists need to study their own processes as well as the service provider options. According to iapps' David Goldsmith, philanthropists should take the time to identify both current problem areas and opportunities for improved efficiency before choosing an application. "Grantmakers want to make sure they don't just Web-enable the same problems the old system had," he warns.

When it comes to service providers, there are certainly more options than there were only a few years ago, no matter what your needs and resources may be. Make sure you talk to several providers before making a decision. And when selecting a service provider, ask specific questions, such as

• How much does it cost?
• Does it fit our budget?
• Will it be cost-effective?
• How could it help our grantees?
• Can the program be customized to our needs?
• Is the program compatible with our current technology infrastructure?
• How much experience does their staff have with grant administration?
• Do they have a significant client base with needs similar to ours?
• Can the application meet all of our current and anticipated needs?
• Is training required?
• Is technical support available, and does it cost extra?

Take the time to assess your options before choosing a provider. Ask all these questions and more. If they have a demo version of the product, test it out. With the opportunity to dramatically change the way you serve your communities, it's better to be safe than sorry.