Faster and Better: The Tech Company Transforming Grantmaking

Jason Ricci, CEO, Fluxx (Photo Credit: Fluxx)

Eighty billion dollars. That's a lot of dough.

It's the estimated combined assets for the 150 foundations that are currently using the technology platform Fluxx to process grants. "With that much money flowing through our systems, we really have a huge opportunity here," said Jason Ricci, CEO of Fluxx, whom we chatted with recently.

Fluxx processes grants for foundations, corporations, and government agencies. Its clients include Knight, Packard, Kresge, Citibank and the Department of Internal Affairs of New Zealand, to name just a few. Fluxx is currently distributing an estimated $5 billion a year. It says that its technology provides everyone from individuals and corporations to nonprofits and foundations the tools to make giving more impactful and data-driven, and to improve the efficiency and transparency of grantmaking, as well as to make collaboration easier.

The company started just five years ago, and had $7.2 million in revenue as of December 2014. But the genesis of Fluxx goes back further than that. Ricci dates the beginnings of Fluxx to a little over 10 years ago when he was the chief information officer at the Energy Foundation, a regranting organization. Ricci was doing intensive tracking of money at the the Energy Foundation, and with his collaborators, decided to convene several big foundations to talk about the cumbersome process of grantmaking and how to make it better.

"We got together with Packard, Mellon, Mott, and Hewlett and said, 'We see there's a problem here, let's try and fix it,' so it started out as a very community-focused and community-driven product." With the help of these big foundations, the project began to evolve.

"Because of who we had at the table, it made sense to start with [developing products for] the really big foundations, but more importantly, they are often the ones with the most complex grantmaking processes," said Ricci. He described how, with his collaborators, he convinced the big foundations to invest in the development of better software for managing the grantmaking process, with the idea that smaller foundations downstream would eventually benefit.

New foundations came onboard quickly for Fluxx. "We have Surdna, Knight, Getty, Packard, Carnegie, Kresge, MacArthur," said Ricci. Having so many big foundations on the platform has helped Fluxx to define and decide what gets built, said Ricci, "and it also allows us to talk to some of the foundations that are driving the interesting conversations around the future of philanthropy."

What does Fluxx do to improve grantmaking? Ricci pointed to the Knight Foundation as an example of how Fluxx can streamline and expedite processes. Prior to Fluxx, the Knight Foundation's grantmaking life cycle had 27 process steps and took anywhere from 30 to 60 days to make a grant. Now, the process is down to six steps and grants are sent out in a week to 10 days.  

That's not just great for foundations. It's a godsend for nonprofits waiting for checks. 

For grants under $75,000, Knight has used its new two-step expedited process for about a year and a half, said Ricci, and during that time, the foundation has completed 184 grants totaling $16 million, the average grant being $48,646. "It's two steps," said Ricci. "These grants can be done on a Monday morning and a check can be ready by Monday afternoon." Not as fast as an ATM, but darn impressive. 

Knight estimates they will do 120 expedited grants this year, and says they would only have been able to make 50 of them using the standard process. "It’s a substantial increase in grantmaking for a foundation with a total of about 60 employees and 30 program staff," said Ricci.

Another example? The Department of Internal Affairs for the country of New Zealand uses Fluxx to manage initiatives, communicate with grantees, and network its departments. Applicants for government grants develop familiarity and ease; after repeated use of the system, they don't need to start from scratch for new grants, but can enter their data and link it to other parts of the system for new applications. As of late October 2014, the New Zealand Department of Internal Affairs used Fluxx to manage its entire grantmaking operation. 

In case you were wondering if Fluxx growth is going to plateau anytime soon, think again. "We have a new product for grantseekers and a new product for tracking impact. When we put all those together, it really helps to define the ecosystem and provide a platform for better communication between everybody."

The grantseeker tool reduces duplication and helps grantseekers track the entire process from prospecting to final reporting. "All in one place," said Ricci, "so that grant seekers don't have to log in to 20 different places to submit the same application using different forms and fields."

Fluxx also provides what it calls Impact Intelligence, a way to track impact in real time, rather than the old-fashioned way of "writing a 20-page report that no one reads," said Ricci.

This new tool for tracking impact is being soft-sold to the platform's users, with good effect, according to Ricci. "We're not going to foundations and saying 'You need to communicate better with your grantees and do it this way,'" he said. "We're just putting the software out there and handling it from a technology perspective, and letting it happen."

Ricci sees grantmaking for foundations trending in the right direction, with general consensus in the field that transparency and data sharing benefit everyone. In addition, he sees some dynamic forces in some of the new leadership for the sector. "There's some new life getting breathed into a lot of foundations. Darren Walker, the relatively new president of Ford, is kind of shaking things up. Larry Kramer at Hewlett as well, they're becoming much more transparent about what they do."

With the growing legitimacy of data sharing and transparency in the nonprofit sector, Ricci sees tremendous potential for Fluxx's products and for making philanthropy more efficient and effective. "We process $5 billion in grants a year. There's a huge impact realized by us just getting foundations to be more efficient or to do things the same way. It doesn't sound as sexy as helping them track impact, but the operational piece of what we're doing has a huge effect downstream on the people they're funding."