From Systems to Solutions: Reducing Risk and Increasing Responsiveness in Grantmaking

Value Stream Consulting
May 5
4 min read

Introduction: Why This Shift Matters

For decades, the philanthropic sector has relied on Grant Management Systems (GMS) to handle the administration of grants, efficiently tracking the lifecycle of a grant from application through reporting. These systems, built around hardcoded processes and linear workflows, served a critical function when foundations operated primarily as financial stewards, allocating resources to expert nonprofits doing the work on the ground.

But the world has changed.

As highlighted in the first two articles of this series, foundations are expected, even required, to be more than just funders, they must be changemakers, collaborators, data stewards, and thought leaders. To remain relevant and impactful in this evolving landscape, foundations must rethink their tools, approaches, and most importantly, their mindset.

And with growing public scrutiny and demand for measurable impact, foundations can no longer afford to fund activities that don’t contribute to real, synergistic solutions. When a grant doesn’t clearly tie into solving an identified problem, the risk isn’t just reputational, it’s political and strategic. That’s where Solutions Thinking becomes essential.

Systems vs. Solutions: What’s the Difference?

Systems: Efficiency Through Uniformity

Definition: A system is a structured set of rules and processes built to achieve a predictable outcome. In the case of grantmaking, a GMS is typically a software platform configured to manage repetitive tasks and ensure compliance.
Strengths: Efficiency, consistency, auditability, and scalability.
Limitations: Inflexibility, slow adaptation to change, and challenges incorporating nuance or innovation.

Traditional GMS platforms are often limited to building rigid, hardcoded workflows. These enforce a "one size fits all" process that assumes all grants, and grantees, fit neatly into standardized stages and checkpoints. But in practice, that rigidity prevents responsiveness. It doesn’t leave room for adaptation in response to urgent needs, current events, or emerging insights.

As a result, foundations risk:

Missing opportunities for timely interventions
Overburdening grantees with irrelevant compliance steps
Failing to demonstrate how their funding aligns with real-world problems

Solutions: Responsiveness Through Insight

Definition: A solution is a dynamic, purpose-driven approach tailored to a specific current challenge. Solutions are iterative, responsive, and grounded in the context of both the funder and grantee experience.
Characteristics: Solutions-thinking requires that foundations identify and commit to solving problems, not just distributing funds. And that requires flexible infrastructure, human-centered processes, and above all, a culture of learning and adaptation.

The Case for Solutions-Thinking in Grantmaking

Grantmakers today operate in an environment marked by:

Rapid social and environmental change
Increased public and media scrutiny
Demand for transparency, accountability, and impact
Pressure to collaborate and co-create value with grantees and communities

In this context, continuing to rely on rigid, systematized GMS processes is not only inefficient, it’s risky.

Funding without purpose or alignment is no longer acceptable. Foundations that distribute grants without a clear tie to solving real-world problems, or that cannot show their work evolves in response to learning, risk being seen as out of touch or even irrelevant.

Solutions-thinking addresses this head-on. It allows grantmakers to:

Justify each grant through its contribution to a broader initiative or solution
Adapt grantmaking strategies in response to crisis, innovation, or feedback
Show stakeholders how learning and outcomes, not just process compliance, drive their work

How to Do This: From Systems to Solutions in Practice

1. Start with Initiative Management

As discussed in the second article of this series, initiative management is fundamental to solutions-thinking. It enables funders to group grants, learning, data, and partners under shared strategic umbrellas, moving beyond fragmented grant cycles and into cohesive efforts to address root causes of real problems.

This approach enables:

Clarity of purpose: Each grant serves a defined, evolving initiative.
Outcome focus: Activities are connected to meaningful metrics and outcomes.
Learning integration: Real-time insight shapes decision-making, midstream.

2. Replace Hardcoding with Responsiveness

Hardcoded systems may simplify administration but stifle innovation. Foundations need platforms and processes that respond, not resist, change.

What to look for:

Modular tools that can be extended or reconfigured easily
No-code interfaces that allow internal teams to adapt workflows themselves
Data interoperability, enabling real-time integration with external sources like impact dashboards, demographic data, and grantee feedback

Responsive technology supports strategic flexibility. It allows foundations to pause, pivot, or accelerate based on what’s actually happening in the world, not just what was written in last year’s planning document.

3. Ensure Each Grant is a Solution

Avoid “check-the-box” funding. Instead, ask:

What is the problem this grant aims to solve?
How does it fit within a larger solution or initiative?
What learning will we gain, and how will it inform our next move?

This orientation toward problem-solving over process-following reduces reputational risk and increases the strategic clarity of your portfolio.

4. Build Adaptive Capacity

Lastly, foundations must invest in their own ability to evolve. That includes:

Training staff in agile practices and learning cycles
Creating safe-to-fail experimentation spaces
Fostering an internal culture that values responsiveness over rigidity

The shift from systems to solutions is not about abandoning structure, it’s about transforming it into a tool for active learning and social problem-solving.

Conclusion: It’s Time to Move Beyond the Lifecycle

The “lifecycle of a grant” is no longer sufficient. Foundations today are expected to demonstrate how their work is contributing to real, measurable change, and how they’re learning and evolving in the process.

Solutions-thinking invites us to reimagine our tools, our roles, and our impact. By embracing responsive infrastructure, initiative-based planning, and an adaptive mindset, grantmakers can not only keep up, but lead.