Why Multi-year Grants are Good for Everyone (and How to do Them)

By Kate Caldecott

A previous version of this article was included in the June 2017 issue of Grants Management Intelligence published by AIGM.

Given the complexity of the work we try to do, it’s probably not realistic to expect big, hairy, life-changing projects to fit neatly into predetermined 12-month periods.

Multi-year grants allow grantees the opportunity to take on more ambitious projects, to learn and make adjustments as they go, and to be able to focus on capacity development issues like staff training without feeling that they are losing precious time while the clock is ticking.

While the challenges of multi-year grants leave some funders unwilling to risk committing to a project for more than a year, delegates at Grantmaking in Australia 2017 agreed that with careful advance planning and by building some protections into your program design, you can reduce the threat of finding yourself “stuck” in a project that’s not working. Here are some potential structures to consider.

Multi-year grant models

By invitation only

Some funders issue open requests for proposals for annual grants, but run their multi-year grants on an invitation-only basis.

Inviting grantees who have performed well in the past and know your work style and expectations gives you the protection of working with not-for-profit organisations with a proven track record. Newer organisations can be “incubated” instead. This can entail restricting first-time applicants to an annual grant.

Successful groups that demonstrate their capacity to manage a project well can be invited to apply for multi-year funding in more complex projects.

Three-year grants with annual reports

Another model entails providing a grant for three years, but requiring detailed annual reporting. Each report is similar to an acquittal, with a contract requiring targets for annual outputs to ensure progress is being made. Payments can be tied to this.

Option to renew

You can set up your program, so that it is fully funded for the first year, but with grantmakers given the power to “renew” (or not) in subsequent years. This would require an initial comprehensive application for the first year, then “sub-applications” in subsequent years.

The two advantages of this model are that it allows you to reward good performance, and, it allows you to renegotiate the contract annually to reflect evolving expectations. This suits organisations whose long term strategy may change. Cutting funding mid-cycle if there are problems, however, can cause major difficulties for both parties.

Benefits of multi-year grants

Aside from being a more realistic way to approach society’s biggest and most complex challenges, multi-year grants offer another important advantage: they’re an opportunity to build stronger relationships with the community groups and not-for-profit organisations in your community.

Some funders have convened networks of their multi-year grantees. This is a great way to share lessons, deliver training and professional development, and look for opportunities to foster relationships.

If designed correctly, multi-year grants make it easier for everyone by reducing the number of applications, and reducing the workload over the following years. This gives grantmakers the chance to spend more time on the relationship and less on processing and assessing applications.

While multi-year grants require some careful planning, design and structure, the benefits make it worth the effort. If you would like assistance in setting up a multi-year grant program, please contact me at Kate@katecaldecott.com.au or 0447 227 598.