Grant funding is one of the primary ways that nonprofit organizations sustain and grow their operations. However, managing grants can be a complex and time-consuming process, especially when balancing multiple funding sources with different requirements. The stakes are high—effective grant management is not only about handling the money, but also about fulfilling your mission, meeting donor expectations, and maintaining your nonprofit’s reputation.
In this guide, we’ll cover every aspect of managing grants, from start to finish, with practical tips and tools to help your nonprofit succeed.
What Is Grant Management for Nonprofits?
Grant management for nonprofits refers to the series of processes that help organizations secure, use, and track funding from grants—whether these grants come from foundations, corporations, government agencies, or individual donors. When a nonprofit receives a grant award, it is responsible for managing every aspect of that grant, from adhering to the grant’s requirements to ensuring the money is spent as agreed.
But What Does That Really Mean in Practice?
If you’ve ever applied for a grant, you know that the work doesn’t end with receiving the funding. You’re accountable not only to your organization and its mission but also to the grantmaker who awarded the funds. Whether it’s submitting regular financial reports or documenting the impact of your work, grant management is an ongoing responsibility that extends well beyond the initial approval.
Nonprofit organizations rely on grant funding to support everything from operational expenses to specific projects. So, making sure that you have a solid system in place for grant management is essential. Missing deadlines, failing to track expenses, or not adhering to the grant agreement could jeopardize not only the current funding but also your eligibility for future grants.
Why is Grant Management for Nonprofits Important?
Nonprofit organizations depend on grant funding to carry out their mission. From running community programs to expanding outreach, grant funds provide the financial backbone for much of what a nonprofit does.
Imagine this scenario: You’ve secured a large grant to fund a multi-year project. You’re thrilled because this grant will cover crucial program costs and even allow your organization to expand. But without the right grant management practices in place, you risk running into serious challenges—missing reporting deadlines, failing to track expenses, or not meeting the grant’s requirements. These missteps can lead to funding cuts or even worse, being blacklisted from future grant opportunities.
So, Why is Grant Management Important?
- Accountability: Grant recipients are accountable to grantmakers for how the funds are used. This means you need to track every dollar, show how it’s been spent, and provide evidence that the funds are achieving the intended impact.
- Sustainability: Good grant management builds trust with grantmakers. If you show that you can manage grants effectively, you’re much more likely to secure additional funding in the future.
- Compliance: Many grants come with strict compliance guidelines. Whether you’re working with government grants or private foundations, you’ll need to follow reporting requirements, maintain financial transparency, and possibly undergo financial audits.
These are some of the reasons why proper management of these funds is critical—not just for meeting immediate needs but for making sure your organization has long-term sustainability.
Who Should Be Involved in Grant Management for Nonprofits?
Grant management isn’t a solo activity—it requires a team of dedicated individuals who can handle the different aspects of the grant management process. Some of the roles that have a major part in the grant management process include:
- Grant Manager: This is usually the person who oversees the entire grant management process. The grant manager is responsible for ensuring that the organization stays compliant with the grant agreement, tracks progress, and manages the reporting process. They are also often the primary point of contact with the grantmaker.
- Finance Team: Your finance team plays a crucial role in managing grant funds. They are responsible for tracking expenses, making sure that funds are used appropriately, and preparing financial reports. If your organization receives multiple grants, the finance team’s ability to keep those funds organized is key to staying compliant.
- Program Staff: These are the individuals who are directly involved with the projects funded by the grant. They will be the ones providing updates on progress and outcomes, helping the grant manager compile information for progress reports.
- Board Members: In many nonprofits, board members play a role in reviewing or approving grant applications. They can also help make it so that the organization remains compliant with the grant’s requirements.
- Development or Grant Writing Team: If your nonprofit has a team responsible for researching grant opportunities and writing proposals, they should be looped into the grant management process from the start. This makes it so that everyone is aligned on the goals and requirements of the grant.
In order to be a successful grant management team, you’ll want to schedule regular check-ins to make sure everyone stays on track. Communication breakdowns often lead to missed deadlines or incomplete reports, so keeping the lines of communication open is crucial for success.
What Are the Stages of Grant Management?
Grant management is an ongoing process with multiple stages, each requiring different skills and strategies. Here’s a breakdown of the key stages in the grant management process:
- Pre-Award Stage: This is where your organization does the legwork—researching grant opportunities, preparing applications, and submitting proposals. It’s important to thoroughly review the grant’s guidelines during this stage to make sure your proposal meets the evaluation criteria.
- Award Stage: After you’ve been selected as a grant recipient, you’ll receive a grant agreement. This document outlines the terms of the grant, including how the funds should be used, the reporting requirements, and any other conditions you must meet.
- Implementation Stage: This is where the real work begins. During this stage, you’ll manage the grant funds, execute the project, and track your progress. It’s crucial to stay organized and make sure you’re meeting the grant’s requirements. For example, if the grant is a reimbursable grant, you’ll need to keep meticulous records of all expenses.
- Reporting Stage: Throughout the life of the grant, you’ll likely need to submit progress reports to the grantmaker. These reports should detail how the funds are being used and what outcomes have been achieved so far. Be honest and transparent—grant makers appreciate updates, even if there are challenges or delays.
- Closeout Stage: Once the project is completed, the grant needs to be formally closed out. This involves submitting any final reports, ensuring all funds have been appropriately used, and confirming that all grant requirements have been met.
Remember, successfully navigating each stage of the grant management process is essential for maintaining compliance, demonstrating impact, and fostering trust with funders.
Managing Grants as a Nonprofit: 5 Critical Steps to Success
Effectively managing grants for your nonprofit organization goes far beyond simply applying for funds and hoping for the best. It involves a structured, strategic approach that makes sure every aspect of the grant—from securing it to reporting on its outcomes—is handled with care. Below, we’ll break down each crucial step involved in managing grants, providing detailed insights that you can implement in your own organization:
1. Identifying Grant Opportunities: Finding the Right Fit
Before any grant management can happen, you first need to secure a grant. The key to successfully identifying grant opportunities lies in aligning your nonprofit’s mission with the values and priorities of the funders. This step is often where nonprofits trip up, as they may apply to as many grants as possible without considering whether they’re the right fit.
Here’s a pro tip: Don’t chase every funding opportunity that crosses your path. Focus on quality over quantity. Conduct thorough research into funders that support causes directly related to your work. For example, if your nonprofit focuses on environmental conservation, government grants from agencies like the U.S. Environmental Protection Agency (EPA) or foundations with a similar mission will likely be a better match than applying for a general education grant.
Start by utilizing databases such as Foundation Directory Online (Candid), Grants.gov, and local community foundations to build a list of prospective funders. Pay attention to factors such as the grant size, eligibility requirements, and previous grantees. This helps make it so that your nonprofit is targeting grant opportunities that you’re well-positioned to win, which ultimately saves time and resources.
Once you’ve shortlisted potential opportunities, make sure to:
- Review the grant’s guidelines and eligibility criteria thoroughly.
- Understand the evaluation criteria—what does the funder prioritize? Is it innovation, measurable outcomes, community impact, or sustainability?
- Analyze the grant’s requirements and deadlines to ensure you can meet them.
Remember, securing funding isn’t just about matching your needs with available funds; it’s about finding a funder that is invested in your success.
2. Submitting the Grant Proposal: Crafting a Winning Application
Once you’ve identified a grant opportunity, the next crucial step is crafting a compelling grant proposal. This is not just a formality—it’s your chance to showcase why your nonprofit is the best recipient of the funding. A strong proposal can make or break your chances of securing grant funding, so it’s worth taking the time to get it right.
When writing a grant proposal, follow these key guidelines:
- Tailor the proposal to the specific funder. Each funder has different priorities, so it’s important to customize each proposal to address their unique goals and values. Never use a one-size-fits-all approach.
- Clearly articulate your nonprofit’s story. Grantmakers need to understand your mission, the problem you’re solving, and the impact you’ve had so far. Make sure this is compelling and concise.
- Define measurable outcomes. Funders want to know how their investment will be used. Be specific about the project’s objectives and the outcomes you aim to achieve. If your grant proposal focuses on education, for example, outline how many students you expect to serve and the measurable improvements you hope to see in their academic performance.
- Provide a detailed budget. This is where many proposals fall short. Your budget should outline exactly how the grant funds will be allocated—everything from personnel to program costs. This level of detail demonstrates that your nonprofit has a solid financial management plan in place.
- Ensure compliance with the funder’s guidelines. Missing a minor requirement—such as a financial audit or certification—could lead to automatic disqualification. Create a checklist of all required documentation to avoid this pitfall.
The grant proposal isn’t just about asking for money; it’s about building a relationship with the grantmaker. Think of your proposal as the beginning of an ongoing conversation. Be transparent about your needs, but also be clear about what you bring to the table in terms of expertise, passion, and the ability to deliver results.
3. Developing a Grant Management Plan: Setting Up for Success
After securing a grant award, the real work begins. The next step is to develop a comprehensive grant management plan. This plan outlines how your nonprofit will allocate the funds, meet the grant’s requirements, and track progress.
Your grant management plan should include:
- A detailed timeline. Break down the project into phases with clear deadlines and milestones. This helps keep everyone on track and makes it so that you meet the grant’s requirements within the specified timeframe.
- A financial management plan. Outline how the grant funds will be tracked and managed. Many nonprofits struggle with financial compliance, which can jeopardize future funding. Tools like Sage Intacct are invaluable for tracking expenses and ensuring that you’re adhering to the grant’s financial guidelines.
- Key roles and responsibilities. Who will be responsible for managing the grant? Clearly define who on your team will handle what, from tracking finances to submitting reports. This helps avoid confusion and guarantees accountability throughout the process.
- Risk management strategies. Every project has risks, whether it’s unexpected expenses, delays, or challenges in achieving outcomes. By identifying potential risks early on and having contingency plans in place, you can avoid scrambling to fix problems later in the process.
- Communication plan. Make sure that everyone involved in the grant—whether internal staff or external partners—is kept up-to-date on progress. Regular communication helps identify and solve problems before they escalate.
Think of the grant management plan as your roadmap. Without it, you may find yourself lost and overwhelmed, especially when managing multiple grants at once.
4. Tracking Expenses and Progress: Maintaining Financial and Operational Oversight
One of the biggest challenges nonprofits face is tracking grant funds and ensuring they’re used in compliance with the grant agreement. Financial transparency is crucial, not just for fulfilling grant requirements but also for maintaining the trust of your donors and board members.
Throughout the entire grant process, you need to:
- Track all expenses. Every dollar of grant money should be accounted for. Set up a system (or use grant management software or fund accounting software) to categorize expenses, monitor how much has been spent, and make sure you stay within the budget. This is especially important for reimbursable grants, where you’ll need to provide proof of expenditures to receive the funds.
- Monitor project progress. Keep a close eye on whether you’re meeting the milestones set out in your grant management plan. It’s easy for deadlines to slip or for outcomes to fall short if you’re not regularly checking progress.
- Prepare for financial audits. Many grantmakers, especially government agencies, may require a financial audit at the end of the grant cycle. Make sure your records are complete and organized so that you can easily comply with any audit requests.
- Evaluate impact. Regularly assess whether the grant funds are having the desired impact. If not, consider adjusting your strategy or reallocating resources to better meet your objectives.
By staying on top of your expenses and progress throughout the project, you’ll not only meet the grant’s requirements but also build a case for securing future funding.
5. Reporting to the Grant Maker: Showcasing Impact and Compliance
Reporting back to the grantmaker is one of the most important—and often overlooked—parts of the grant management process. Your funders want to see how their investment is being used and what outcomes you’ve achieved. Timely, transparent reporting helps build a relationship of trust with the grantmaker, increasing your chances of receiving additional funding in the future.
When preparing reports, follow these best practices:
- Provide detailed financial reports. Break down how the grant funds were spent, and ensure that your expenses align with the budget outlined in your proposal. If there were any deviations, explain why and provide documentation to support your decisions.
- Highlight measurable outcomes. Use data to show the impact of the grant. Whether it’s the number of people served, improvements in program outcomes, or tangible changes in the community, make sure your report emphasizes how the grant funds contributed to achieving your objectives.
- Be honest about challenges. No project goes perfectly according to plan. If you encounter challenges or delays, be transparent about them in your report. Explain how you addressed these challenges and what steps you’re taking to avoid similar issues in the future. Grantmakers appreciate honesty and proactive problem-solving.
- Submit reports on time. Missing a reporting deadline is a major red flag for funders. It signals that your nonprofit may not be organized or reliable, which can hurt your chances of receiving future funding. Set reminders well in advance of reporting deadlines to make sure you’re never scrambling at the last minute.
Grantmakers want to see that their funds are being used effectively and making a difference. By providing clear, detailed reports, you’re showing that your nonprofit is a trustworthy partner, worthy of ongoing support.
By following these five key steps—identifying grants, submitting strong proposals, creating a management plan, tracking progress, and reporting effectively—you can set your nonprofit up for success and build lasting relationships with funders.
7 Tips for Executing Grant Management for Nonprofits
Managing grants can be overwhelming, especially if you’re juggling multiple grants at once. To help you stay on top of things, here are some insider tips for grant management.
Managing grants can be overwhelming, especially if you’re juggling multiple grants at once. To help you stay on top of things, here are some insider tips for grant management:
1. Stay Organized from Day One
Use tools like Sage Intacct grant management modules to help you track expenses, progress, and deadlines. Many nonprofits struggle to manage multiple grants, but having a system in place can make it much easier.
2. Communicate Regularly with Your Grant Team
It’s important to keep everyone in the loop, from program staff to your finance team. Regular communication helps prevent any surprises down the line and makes sure that everyone is aligned on the grant’s goals.
3. Don’t Wait Until the Last Minute to Submit Reports
Grantmakers value timely and thorough reporting. Keep track of your progress throughout the grant cycle so that you’re not scrambling at the last minute to gather data for your reports.
4. Monitor Compliance Closely
Review the grant agreement regularly to make sure you’re staying in compliance with the grant’s requirements. Compliance is crucial, particularly if you’re dealing with government grants, which often come with stricter guidelines. If you fall out of compliance, you risk losing the funding or being required to return funds.
5. Anticipate Challenges
No project ever goes exactly as planned, and grant-funded initiatives are no exception. Perhaps your timeline gets delayed, or the costs end up higher than you budgeted. Grantmakers understand that challenges arise, but they appreciate transparency. Be proactive in communicating any changes or setbacks with your grantmaker, and always have a contingency plan in place.
6. Document Everything
Keeping thorough records is one of the most important aspects of managing grants. Whether it’s financial records, meeting notes, or email communications, good documentation will help you meet reporting obligations, handle audits, and demonstrate accountability.
7. Plan for Sustainability
Many nonprofits fall into the trap of focusing solely on the current grant and neglecting to think about the future. It’s important to have a plan for sustaining the funded project beyond the grant’s life cycle. This could involve identifying new grant opportunities, exploring other revenue streams, or developing a long-term fundraising strategy.
Final Take on Grant Management for Nonprofits
Successful grant management is about being a responsible steward of the funds and building trust with grantmakers for future funding opportunities. By staying organized, keeping communication open, and adhering to nonprofit accounting best practices, your charity will be well-equipped to navigate the complexities of grant management and continue serving your community.
Using tools like Sage Intacct for charities can make a world of difference by automating many of the tedious aspects of the process, allowing your team to focus on the mission-driven work that really matters. If you are interested in learning more about how Sage can simplify this process for you, contact us today and we will connect you with a Sage specialist.
Key Takeaways
- Grant management involves much more than securing funding; it includes planning, tracking, compliance, and reporting throughout the grant life cycle.
- A successful grant management process requires collaboration among your team, including program staff, finance personnel, and board members.
- Tools like Sage Intacct can streamline grant management and help your nonprofit stay compliant with grant requirements.
- Nonprofits should always have a plan for how they will sustain their programs after the grant cycle ends, ensuring long-term success.
Frequently Asked Questions
What is the difference between grant management and grant administration?
Grant management is the broader process that includes everything from identifying grant opportunities and applying for them to tracking their implementation and reporting to funders. Grant administration, on the other hand, focuses more specifically on the operational and financial aspects of managing grant funds, such as ensuring that funds are spent in accordance with the grant’s requirements.
What does a grant manager do?
A grant manager oversees the entire grant management process, ensuring that the nonprofit stays in compliance with the grant agreement, tracks all expenses accurately, and submits progress and final reports to the grantmaker. They often act as the liaison between the nonprofit and the funder, ensuring that communication remains open throughout the grant’s life cycle.
What is the grantee management process?
The grantee management process refers to the set of activities a nonprofit undertakes after receiving a grant. This includes everything from tracking how the funds are being used, ensuring compliance with the grant’s terms, and providing progress updates to the grantmaker. Effective grantee management makes it so that a nonprofit stays on track and can meet the goals set out in the grant proposal.
What is the difference between grant administration and grant management?
While both terms are often used interchangeably, grant administration tends to focus more on the financial and operational side of managing the grant—things like budgeting, expense tracking, and ensuring compliance with financial reporting requirements. Grant management, however, encompasses the entire life cycle of the grant, including strategic planning, goal-setting, and impact measurement.
What is the difference between grant management and project management?
Grant management is specifically concerned with the securing, tracking, and reporting of grant funds. Project management, however, focuses on the execution of the actual project that the grant is funding. While the two roles often overlap—especially when it comes to making sure that projects stay within budget and on track—grant management is more finance-focused, while project management is more operational.