Demonstrating the Future of Grants Management

In fiscal year 2021, federal agencies granted over 1.3 trillion dollars to state and local governments, universities, tribal nations, and community-based organizations for various programs to address a wide array of issues. Recent legislation targeted at economic, social, and environmental priorities is taking the form of grants, increasing the amount of federal money flowing to the local level. As stewards of public funds, the federal government is accountable to Congress and the taxpaying public to ensure that these funds are being used to deliver the intended measurable outcomes. In the past, expanding grant recipient reporting requirements has been used to improve transparency into how grant funds are spent and intended outcomes are achieved. However, year after year, studies show that this approach has increased the administrative burden on grant recipients, tied up precious resources better used to deliver results, and not provided the transparency needed by grantmaking entities to enable better grants management decision making.

In 2019, Congress passed the Grant Reporting Efficiency and Agreements Transparency (GREAT) Act with the intent of addressing both transparency and administrative burden issues. The GREAT Act set deadlines for establishing grants data standards, issuing implementation guidance to federal agencies, and implementing the use of the grants management data standards for information collection. In addition, the GREAT Act sought to “minimize the disruption of existing reporting practices of, and not increase the reporting burden on, agencies or recipients of Federal awards; and explore opportunities to implement modern technologies in reporting relating to Federal awards.” To address the GREAT Act mandates, some agencies have begun to explore distributed ledger technology (DLT), or “blockchain,” to manage grants information as “digital assets.” MITRE, a not-for-profit public interest company, took on the challenge of evaluating a modified business operating model enabled by DLT to improve transparency and reduce administrative burden.

In this paper, we will share an overview of the work MITRE and its government and private sector partners have completed to develop a proof-of-concept and evaluate the use of DLT with a modified grants management business operating model based on grants management data standards. Because the December 31, 2022, deadline specified in the GREAT Act for issuing implementation guidance to federal agencies is quickly approaching, this paper also shares our initial recommendations for Congress, the executive branch, and the private sector on leveraging our work to implement the GREAT Act mandates. We believe leveraging the work of MITRE and its government and private sector partners has great potential to reduce administrative burden while also increasing visibility and transparency through all tiers of the grantmaking ecosystem, thus allowing grant recipients to redirect funds spent on administrative and compliance activities to achieve intended outcomes.