How government grantmakers can make the case for digital transformation

In making the case, you’ll need to articulate the catalyst for your purchase now. In 2023, the world does not look as it did three years ago. It’s helpful then to consider some of the larger trends that are influencing the need for this investment.

Government grantmaking will only continues its growth

Even before the COVID-19 pandemic, the last century has been characterized by increases in federal grants to local government entities. As a 2019 Report by the Congressional Research Service put it, over time, the American public has become “increasingly accepting of government activism in domestic affairs generally, and of federal government activism in particular.” 

The report attributes this acceptance and, at times, demand as a reaction to: 

• Industrialization and urbanization

• Modern communications technology, which has raised awareness around societal problems

• Economic interdependencies inherent to a global economy

Needless to say, these trends won’t be reversing any time soon. 

Federal grant aid data from Mercatus Center

The last century has been characterized by increasing acceptance of and demand for federal investments in state and local governments. Source: Mercatus Center

In recent history, we’ve seen: 

• In response to COVID-19, the U.S. federal government spent $620 billion in grants to local governments alone—not including direct payments, loans, or contracts.

• The Bipartisan Infrastructure Law passed in 2021 will fund $470 billion to state or district and local governments.

• Billions of the $733 billion Inflation Reduction Act of 2022 will be disbursed as competitive grants to state, local, and tribal entities. 

McKinsey and Co Competitive Grants Study

Much of the Bipartisan Infrastructure Law funding will be regranted to state or district and local governments. Source: McKinsey & Co

If the past is precedent, the future will bring more and more opportunities for government agencies, and you should be prepared. 

Standards are higher—and so is accountability

State, local, municipal, and tribal governments of all sizes are always accountable to constituents and taxpayers. And modern communication paired with increased awareness of social injustice means they are held to higher standards than ever before. 

Equity

The public demands that grant distribution be equitable. As just one example, the Latino Community Foundation and The California Endowment, working together as the Latino Power Fund, published A Brown Paper on Movement Building & Collective Action To Leverage Historic Federal Funds for Enduring Social Change, a call to action to leverage the American Rescue Plan to begin to reverse historic disinvestment in Latino and Hispanic communities. 

Governments must consider the needs of marginalized and underrepresented groups, such as people of color, low-income communities, and those with disabilities. It doesn’t stop with ensuring that historically disempowered groups have equal access to apply for funding. They must be given the tools needed to be successful in their application, such as an easy-to-use, mobile-friendly system and access to technical support in multiple languages. 

Beyond this, the money itself must be distributed equitably—which in some cases, does not mean equally. An equitable grant may be intentionally designed to achieve social aims, such as narrowing the racial wealth gap. Government employees must not only take all of this into consideration at every step in their process, they know that if they do not, the public will hold them to task.

Urgency 

Teams are under pressure to move faster. This particularly includes teams managing emergency relief funding, where a slow program could result in a missed opportunity to achieve the intended outcome. For example, in 2021 The New York Times reported that states had only disbursed 11% of the $46.5 billion rental aid program intended to protect vulnerable people from being evicted during the pandemic. In early 2022, an analysis by National Equity Atlas found that 60% of approved applicants in the state of California had yet to be paid, with an average wait time from application to funding of 135 days and 70,000 people still waiting for assistance that would protect them from eviction. 

Integrity

It’s now well-known the extent to which government grant programs, particularly for COVID-19 relief, have been victims of a staggering amount of fraud. At least $250 billion. This is bad PR. But the true tragedy is that every dollar that goes toward a fraudster’s new Ferrari is not going to someone who really needs it. Especially in the wake of this catastrophe, the public insists on  programs that can operate with integrity and have sufficient safeguards.

Transparency 

All of what goes into a public grant program must happen in plain sight. People expect their elected officials and their staff to be able to prove, with hard numbers, reports, and audit trails, exactly how they fulfilled their obligations to quickly, equitably, and accurately distribute funds. 

The need to do more with less

These increased demands are falling on government teams that are simply short-staffed. 

As a 2022 Axios report cites,

“While the number of private-sector jobs surpassed its pre-pandemic level, there are 664,000 fewer people employed in the public sector, according to the government jobs report.”

Axios Post-Pandemic Jobs Recovery - Private vs Public Sector

Increasing demands for speed, equity, integrity, and transparency are falling on government teams that are short staffed. This chart shows how the public sector has fallen far behind the private sector when it comes to rehiring workforce that was lost during the pandemic. Source: Axios

Without belaboring the point, more work required of a smaller team with fewer resources is an equation that only some outside factor— such as technology that can make processes exponentially more efficient, eliminating hours of work each week—can solve.

Legacy systems are holding teams back

Many agencies and municipalities are managing grants using custom-built technology. The problem is the technology reflects a circumstance that no longer exists. 

Just as laws regulating the use of horses and carriages would be insufficient to create safe streets filled with automobiles, so do these legacy systems simply no longer serve the lived experiences of public sector teams. Government employees have stretched them as far as they can go, supplementing them with outside processes such as email or spreadsheets and working around pieces of systems that are broken, irrelevant, or even harmful. 

But these efforts are like bandaging a festering wound. They don’t address the root cause of the harm. 

Cloud-based is the future

While the public sector does not have a reputation for being early adopters of cutting-edge technology, the pandemic forced many governments into the cloud era by necessity, both in order to adapt to a remote working environment and in response to an increasing and urgent demand for services. 

Growth in Cloud Spending 2016 to 2021 - Deloitte Insights

Government investment in cloud technology has grown and is projected to continue growing at a significant rate. Source: Deloitte Insights

This trend has been consistent across government sizes, and is also reflected in the top state CIO priorities as identified by National Association of State Procurement Officials (NASCIO). 

From unemployment assistance to housing vouchers, and from disaster relief to small business incentives, as government assistance programs continue to scale, to meet the moment, they need to do so in the cloud.

So far, in this guide, we’ve covered: 

• Understanding the catalyst for making the purchase now;

• The extent of present challenges; and

• The untapped opportunities that could be realized with a grant management software purchase. 

Now, let’s move on to the specific benefits that a purpose-built grant management software (GMS) can provide government teams. They are as follows: 

• Save time

• Reduce fraud

• Improve equity

• Move faster 

• Do more with less

• Provide a better constituent experience

• Have a partner in accountability

We’ll recommend specific tools to look for, why they work, as well as detailed checklists that you can use to evaluate different systems. Let’s get to it. 

Save time

Let’s begin with saving time. This may be the most basic of expectations you would have from a GMS, but as your goal is persuasion, you want to prove it with data. 

A Submittable customer survey from late 2022 asked government customers how much time they save from using a GMS (in this case, Submittable). Of the respondents, 95% say they saved time. Specifically, they save time on: 

• Review process and making decisions (78%)

• Communicating or coordinating with applicants (61%)

• Administratively launching the program or project (56%)

• Measuring and reporting on results or impact (54%)

• Managing applicant eligibility and program requirements (49%)

Now let’s turn to how much time. 

Over 40% of these customers say Submittable saved them 2-4 hours per week, per program administrator. Close to a third estimated time savings for a single administrator at 5-7 or 8 or more hours per week, and the remainder saved less than two hours per week. 

Time saved by Administrators using Submittable

Time saved by administrators using Submittable

Review teams saw enormous savings as well, averaging over 2.5 hours per week per reviewer.

Top time-saving tools to look for:

• A drag-and-drop form builder

• Eligibility quizzes

• In-app communication with applicants

• Reviewer collaboration tools like notes and messaging 

• Easy-to-build scoring rubrics

• Multi-stage review processes

• Comprehensive reporting tools

• Easy data imports and exports

• Automated audit trails

• Self-service editability and real-time updates

Reduce fraud

The risk of fraud is real and scary. But government teams can mitigate it with modern technology. 

Purpose-built grant management solutions can prevent fraud before it starts with fraud prevention tools that verify identities—without creating a huge burden on your team or your applicants.

One such tool is Knowledge Based Authentication, or KBA. KBA is a tool that industries like financial services have used for years at transaction points, such as in an application for a new credit card, to confirm that an applicant is who they say they are. 

There are two types of KBA quizzes: static and dynamic. Static KBA quizzes consist of a series of questions about your history, to which the individual provided a correct answer ahead of time. This is a common step in many password retrieval systems.  

A dynamic KBA quiz offers a higher level of security. It generates questions for applicants based on public and private data sources, such as transaction histories, credit reports, or marketing data. The questions are designed in such a way that only the individual themselves would readily know the answer.

For instance, typical dynamic KBA questions could look like: 

• Which of these phone numbers have you ever used previously?

• Which of these people is your relative?

• Which of the following addresses have you lived at?

Dynamic KBA quizzes often impose a time limit as an additional security precaution. This is to mitigate the risk of a fraudster attempting to research the answers to the questions. 

Another top fraud prevention tool is referred to as Identity Verification. This is a highly sophisticated yet very easy-to-use technology that performs two functions: 

• Verifies that a government-issued identification document is legitimate

• Verifies that a selfie the applicant takes in real time matches the photo on the government-issued photo ID

While this technology is relatively new, it’s extremely simple to use and is becoming more prevalent for some consumer activities, such as booking a car-sharing service online. Applicants are walked through easy step-by-step instructions and are even prompted to fix issues, such as low lighting. 

A typical Identity Verification workflow will prompt the applicant to take a photo of their government-issued photo ID followed by a selfie taken in real time.

Top fraud prevention capabilities to look for:

• Embedded dynamic KBA quizzes

• An imposed time limit on KBA quizzes

• Verification of government-issued identification documents

• Real-time matching of selfies to photo IDs

• Auto labeling of fraud screening results 

Improve equity

A human-centered grant program improves equity from beginning to end, in ways both subtle and obvious. Here, we’ll just cover a few of the most compelling points. 

Easy-to-use

The platform must be easy-to-use for applicants, full-stop. Many applicants—especially, often, the most vulnerable or in need of grant assistance—are not deeply technologically sophisticated. 

How can you evaluate ease of use? During the demo process, ask to see the applicant's point of view. Better yet, ask if you can go through a sample application yourself. If you run into anything tricky, that’s a red flag. 

Mobile-friendly

Many applicants may not have access to a desktop computer or reliable internet, particularly those living in rural areas. The best way to accommodate these populations is to work with a GMS that is fully-optimized for mobile. This should be easy to test out for yourself during the demo process. 

Accessible 

To run an inclusive program, you need a system that is accessible to those with a wide range of disabilities, including common conditions such as age-related or vision impairments. 

Fortunately, there is an established standard to assess the accessibility of software called a Voluntary Product Accessibility Template or VPAT. Look for one that follows industry standards outlined in the Web Content Accessibility Guidelines (WCAG) 2.0 (maintained by the World Wide Web Consortium or W3C). 

Note: A VPAT is only an assessment, so it’s essential to ask for the results of the VPAT. Just as if your child told you that they took a test you wouldn’t then know how they performed on the test, software claiming they completed a VPAT won’t tell you whether the VPAT affirmed that it is accessible to applicants with a wide range of disabilities. 

In-app collaboration 

In-app collaboration is a great way to be more inclusive of diverse populations of applicants, including those unfamiliar with using computers, speaking different languages, or in need of support filling out the application. It gives another person, such as a relative or social worker, the ability to help fill out the form with the applicant in real time, while the applicant maintains ownership. Look for a real-time tool that allows users to see where the other is throughout the form (similar to using Google Docs).

File uploads 

Many people do not prefer to communicate in written form. Where possible, allow applicants to communicate via their preferred method, such as over video. Look for a GMS that supports file uploads from many different file types. (Tip: make sure that the GMS also streams the diverse file types for your reviewers to avoid any headaches with file type compatibility down the line.) 

Review tools 

The decision-making process is a key—maybe the key—moment to integrate equity into your program. Removing barriers to apply won’t mean much if there isn’t ultimately an equitable distribution of funds, or if eligible applicants are overlooked due to bias or another systemic failure. Luckily, review tools can help. Here’s what to look for:  

• Concealed applicant information: This is how you can conceal information that may introduce bias, such as demographic data or personally identifying information, from your review team. 

• Confidential review: You don’t want your reviewers to intentionally or unintentionally influence each other. Allowing for a confidential review helps each reviewer’s assessment be more objective. Permission levels will not only empower you to set up confidential reviews, but will also give you as an administrator the ability to evaluate reviewers against each other to look for signs of bias or a need to correct for trends among differing reviewers (such as a tendency to score lower or higher than average).

Supportive of multiple languages

If your constituents speak languages other than English, being able to provide your application and technical support in their native language is an important way to run an inclusive program. 

Top equitable tools to look for:

• Easy to use

• Mobile friendly

• Accessible as determined by results of a VPAT

• In-app collaboration

• File uploads

• Review tools to conceal applicant information 

• Permission levels 

Move faster

When it comes to executing programs on tighter timelines, it helps to take a step back and view the full end-to-end process. The right grants management tool will help you move faster in the three key phases where speed is key:

• Program launch

• Review and decision making

• Funds disbursement

Here’s what to specifically look for in each phase. 

Program launch

An easy-to-use platform is the key to launching a new program quickly. It not only removes barriers the first time around (see above [ANCHOR LINK] for more on this), but every successive program can launch faster and faster as you become more familiar with the technology and can leverage time-saving tools like form and project duplication. 

The other key piece is platform agility. Working with an agile software frees you to launch more quickly knowing that in case you made a mistake, such as omitting an important eligibility requirement, you’ll be able to add it later and update your application form immediately. 

Review and decision-making

Of all the ways that technology can revolutionize your grants programs, an automated review is the most cutting-edge and, potentially, the most transformative. 

Government programs are typically compelled to follow strict guidelines around, for example, funding eligibility that must be confirmed through specific documents such as 1099s and pay stubs to verify income. The reviewer, in this case, must request these forms from the applicant and check them to move the applicant along in the process. 

Let’s say each verification takes 2 minutes. If you receive 100 applications, no big deal. Done in an afternoon. But what if you get 1,000? That’s over a week for a single person—assuming they did absolutely nothing else except this single verification step. 

Now imagine 1 million. 

It’s easy to see how this one compliance need can quickly escalate into an excruciating bottleneck. Luckily, AI is here to help. Look for a GMS that offers automated review that can perform these tasks in seconds. As a bonus, they can also mitigate the risk of human error, increasing your program's integrity. 

Funds disbursement

Some GMS vendors offer full, end-to-end funding distribution to awardees. Opting for this service means that your team won’t write a single check—let alone, deal with returned checks in the mail, track down correct addresses, reissue expired checks, and the rest of the headaches that typically come with distributing payments.

To make disbursement as painless for yourself as possible, seek a solution that allows you to trigger the payment from within the platform, ideally in a single click. 

Look for a vendor that provides payments via ACH—providing the best and fastest constituent experience. They should be able to establish an average digital payment delivery time of 48 hours or less. 

It’s also important to consider whether you need a vendor that can support payments via checks and prepaid debit cards, especially if your programs support unbanked populations.  

Top tools to look for moving fast

• Form and project duplication

• An agile platform with self-service tools

• AI-powered automated review 

• In-app triggering of funds disbursement

• Payment via ACH

• Payment via check and prepaid debit card

Do more with less

All of the capabilities described thus far will help teams that are stretched thin. But what if you simply don’t have the people power to meet constituent expectations or legislative requirements—even with better technology? 

Here’s where partnership, and professional services, make all the difference.

Some grant management software providers also offer project managers who act as an extension of your team, implementing your program according to your direction and subject to your approval, but without you needing to lift a finger. 

Beyond project management, it’s worth considering if you need a dedicated customer service desk. With dedicated campaign support, your GMS provider’s help staff can answer not only the applicant’s technical questions but also questions regarding the program, such as those related to eligibility or payment, that would typically be routed to your team. 

Top professional services offerings to look for:

• Project management

• Dedicated applicant support

Provide a better constituent experience

Much of what has already been covered will improve the constituent experience. Still, it’s worth zooming in on this benefit separately because it is key to how your program will ultimately be perceived and judged by members of the public. If this is your top priority, utilize the list below as you evaluate solutions.

Top considerations for providing the best constituent experience:

• Auto-saved applications

• Mobile-friendliness

• In-app collaboration

• Technical support for applicants

• File uploads

• Ability to edit application

• Digital funds disbursement 

Improve accountability

When it comes to accountability, your GMS provider essentially can offer two types of support: 

• Reporting tools, audit trails, and checks and balances that improve your compliance, audit-readiness, and program integrity

• Partnership that will stand by you if something goes wrong until you make it right

Top accountability tools to look for

• Comprehensive reporting

• Imports and exports

• Balancing of funding across demographic or other criteria

• Fraud prevention

• Partnered approach