Competitive Grant-Making: A Review of the Literature
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Competitive Grant-Making: A Review of the Literature

Published: Apr 23, 2015
Publisher: Princeton, NJ: Mathematica Policy Research
Health Medicaid and CHIP Advisory Services Technical Assistance Policy Analysis
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Key Findings

Key Findings:

  • Competitive grant-making strategies are used to grant money in a number of sectors (including health, education, and research) and to distribute funds to a variety of organizations (including nonprofit organizations, governments, and smaller foundations). Competitive grant-making is used when foundations are looking to make the distribution of charitable funds more strategic and impactful; when there is a desire to “jump-start” recipient organizations by making upfront investments that they would not otherwise be able to fund; and to reduce public scrutiny by formalizing the giving process.
  • Competitive grant-making strategies are preferable to a more traditional approach when foundations wish to narrow a crowded playing field of potential funding recipients. Because the process can be lengthy due to the many layers or review, it may be preferable when a funder is looking to engage in initiatives with a longer-term horizon, such as systems change, policy, or policy development work.
  • Monitoring and evaluation are key principles of competitive grant-making and need to be considered and planned for from the beginning. Authors in the literature review had differing ideas about how to evaluate both the strategies their grantees undertook and their own performance, but, in general, there is consensus that developing a one-size-fits-all model is nearly impossible.
  • Competitive grant-making strategies can contribute to the sustainability of funded organizations. The technical assistance, management consulting, and time spent building networks of stakeholders help build the organizational capacity of grantees and create broader support for the initiative’s goals. It can help organizations improve their ability to obtain ongoing financial support from other sources by signaling that the entity is a good investment, and foundations can encourage potential grantees to think about sustainability from the beginning of the competitive process by including it as a requirement in the grant application.

As part of the evaluation of the Cities Expanding Health Access for Children and Families program for Atlantic Philanthropies, Mathematica conducted a targeted literature review of scholarly and other published sources to identify previous publications regarding competitive grant-making strategies. For this literature review, competitive grant-making is defined as a process whereby philanthropic organizations clearly define their goals and objectives, require bidders to compete against each other (sometimes through multiple rounds), thoroughly review those proposals, and grant awards to the strongest bids. This literature review included 31 relevant articles. We investigated the reasons foundations undertake competitive grant-making, which include making the distribution of charitable funds more strategic and impactful; “jump-starting” recipient organizations by making upfront investments that they would not otherwise be able to fund; and formalizing the giving process to make foundations’ investments more transparent. We found that competitive grant-making is particularly useful when foundations need to narrow a crowded playing field of potential recipients and when foundations are engaging in initiatives with a longer-term horizon (such as systems change, policy, or policy development work).

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