Key Grant Performance Indicators

In recent interviews, many government leaders had little or no key information on their grants performance. This is surprising considering that grants often make up 5-20% of a government's budget. Good leaders know that the old adage, "What gets measured, gets done" holds true. Use these 5 indicators to drive your grants performance today.

KPI #1: Number of Grant Applications
While seemingly easy in concept, few governments have good information on their grant applications. Those who do tend to have a formal approval process or centralized grant coordinators to track this information. Care should be taken to denote what types of grant applications are submitted: new, continuation, competitive or formula. Larger organizations should have this information broken down by department. While the number of applications doesn't measure success, it indicates the relative aggressiveness of an organization.

KPI #2: Win Ratio
Without a good handle on grant applications, measuring win rates is impossible. Simply defined, a win ratio equals grants awarded divided by applications submitted. If grants are submitted but not tracked, the win ratio will be skewed too high. Care should be taken in defining the ratio to exclude grants the organization will be awarded automatically. For organizations with comprehensive services and a very aggressive grants approach, win ratios might fall slightly below 50% when stretching to pull in the most grants possible. Most organizations look for a sustainable grants growth rate to support their expanding services that falls between 50-80%. If win rates are above 80%, organizations should consider being more aggressive in their pursuit of grants. If rates are significantly below 50%, organizations should look to improve the quality of their proposals.

KPI #3: Funding Awarded
This is the measurement people typically think of when it comes to grant performance, and it definitely has a place in your 5 Core KPIs. It's fairly easy to calculate since Finance and/or Legal departments typically have access to contract award information. But be careful! Don't get caught by common missteps:

• Funding awarded numbers can often be incorrectly calculated and serve only as a lagging indicator.  To be relevant, grant funding needs to be calculated based on awards, not expenditures.
• Take care not to double-count funds due to fiscal year timing.  Conventions on multi-year grants need to be agreed upon.  Is a 5-year grant of $250,000 a year count as $1.25 million or $250,000 each year for 5 years?  Both conventions are valid, and, with consistent use, will be valuable to your organization. 
• One or 2 big programs can skew your funding awarded numbers.  For example, when the COPS program was cut, many local governments saw a substantial decrease in total funding. Even though they had done significantly better in other programs, overall funding was decreased.  Conversely, jurisdictions that received large Homeland Security grants might look like superstars in spite of poor performance elsewhere.  Calculate your funding awarded numbers with and without these large programs.

KPI #4: Number of Projects Researched
If there is one measurement few organizations track that would likely have the largest impact on grant success, it would be the number of grant programs that were fully researched. This metric drives performance. The sad fact is that many appropriate grant funds are never considered for eligible projects, so the key with this metric is simply measuring.

Tracking this metric is difficult, especially in large organizations. Whereas applications and grants won have very clear events that mark their passing, projects considered for grants requires the organization to define a set of actions. Typically a project that meets the definition is one that has been fully researched and is continually being considered for grant funding. Some eCivis clients have already mastered driving this, and they have experienced explosive growth in grant awards and funding.

KPI #5: Utilization Rate
While the first 4 KPIs are important, they can all be undone if the winnings aren't spent.  You might think this would be a rare event.  Think again.  Local governments fail to spend the money they are awarded for a variety of reasons.  Sometimes this occurs for logical reasons: Projects change, agencies alter requirements, or less funding is needed than originally estimated.  Many times this happens for avoidable reasons, whether strings were not understood prior to application, or there was no need for the funding to begin with, or matching funds were not available. Even worse, organizations sometimes forget to spend the funds or cannot spend the funds before the due date.  We recently had a city manager tell us of a $600,000 parks-related grant that was returned to the funding agency because it expired…nobody was focused on the project.  As he stated, “this city isn’t so wealthy that we couldn’t have used another $600,000.”  The utilization rate gives you an overall annual metric for this.  It can be calculated by dividing total grant funds expended by the total grant funds awarded.  This is an area where you want to drive for greater than 99% utilization.

Armed with these 5 Key Performance Indicators, you will have the knowledge to drive performance in your organization. 

About eCivis
eCivis is the leader in improving grants performance for local governments nationwide. Through the highest quality research, web-based systems, and training, eCivis helps over 400 cities, counties, school districts, and community colleges propel their grant efforts to secure and manage billions of dollars in funding. For more information, email us at grantinfo@ecivis.com or call us directly at (877) 232-4847.