Grant Management

The Top 3 Challenges of Managing Government Contracts

By | Government, Grant Management, Nonprofit | No Comments
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Nonprofit organizations frequently enter government contracts. Whether contracting with town, city, state, or federal government entities, nonprofits provide a valuable service to government entities. This mutually beneficial relationship spans many areas of nonprofit work including education, health and human services, the arts, and much more.

However, there are common challenges that nonprofits face once they have contracted with government entities to provide services. We’re not talking about the obvious initial hurdles that nonprofits must overcome to secure contracts, such as winning RFP bids to be on approved vendors lists and so on. No, we are talking about challenges that arise once the contract is signed and work has commenced.

Below are the top three challenges faced by many nonprofits and possible solutions. Perhaps after reading these, you’ll recognize your own work, and the challenges you face, in similar situations. Some of these dovetail with grant management challenges, so read our article on that topic for additional insights.

Challenge 1: Contract rates do not cover administrative costs

This one can make any nonprofit feel a pinch in the pocketbook. Unfortunately, it’s all too common—in one survey conducted by the state of Oregon, 75% of respondents felt this was the number one challenge when dealing with government-based contracts.

Nonprofits need to clearly assess the overall administrative costs of all contracts and add these costs into the contracted amount. What roles will be required to administer, maintain, and support the contract? What are the salary and related costs associated with the administration, and for what duration should the contract cover them?

To address this challenge requires working with your accounting and finance team to accurately assess costs for future contracts and ensure it is written into the contract itself. If you fail to do so, you could find yourself losing margin on future contracts as administrative costs sap whatever margin you intend to make from the account.

Challenge 2: Timelines are unrealistic

This is another challenge frequently encountered by nonprofits—the timelines given to them by the government agency to achieve a stated goal are considered unrealistic. Perhaps the government wishes to see a change of X percent in Y days, but given your knowledge of the issue, that is impossible.

First, ascertain where this time pressure is coming from within the government entity with which you are conducting business. Is it coming from a politician eager to gain votes? Or is it from a time-pressed bureaucrat who simply doesn’t understand the work itself?

It’s important to determine the source of the timeline pressures so you can address them. If it’s coming from people eager to see results (and enhance their standing within the organization) then sitting down with them and helping them to understand why a slower approach may be beneficial is essential. They may agree with you that more time is needed to get better results, which will also reflect well on them.

But do your part as well when negotiating contracts. Oftentimes nonprofits are so eager to secure government contracts that they do a poor job estimating how long it will take to achieve the desired results—or they do not have all the information necessary during contract negotiations to make a sound estimate. Adding some padding to timelines ahead of the project may give you enough grace to successfully achieve the desired outcomes or at least negotiate a longer timeline.

Challenge 3: Burdensome reporting requirements

Red tape, red tape, and more red tape—if you feel like you’re tangled in it, you’re not alone, as many nonprofits in the previously cited Oregon study also felt that reporting requirements were often burdensome.

To make reporting less burdensome, keep good records along the way. Using a cloud-based fund accounting system can make the financial reporting easier, for example, as it can directly chart expenses and revenues to specific budget lines.

Some nonprofits find that having a staff member on the team dedicated to the government contract and solely responsible for reporting requirements takes the burden off the rest of the team, enabling them to deliver services without worrying about completing the proper reports  You may wish to plan on a portion of a team member’s time for this function for your next government contract to avoid the feeling of always working on reports, rather than the delivery services for which your organization has been contracted.

Welter Consulting

Welter Consulting bridges people and technology together for effective solutions for nonprofit organizations. We offer software and services that can help you with your accounting needs. Please contact us for more information.

Five Mistakes Grant Organizations Make

By | Grant Management | No Comments
person with head on desk and open laptop over his head

With over 86,000 granting organizations in the United States alone, there are many opportunities for grants. Most articles about grants talk about applying for, managing, or receiving grant funds. But what about the organizations that grant the money? What advice and information benefits them?

Here, we’ve put together five very common mistakes that grant organizations make. Do any of them resonate with you? Fortunately, they are also mistakes that are very easy to correct.

Mistake 1: Poor Reporting

Reports are a form of communication. Nonprofit directors, boards, and donors require clear communication to better understand how their funds are spent. Without good communication, you may be at risk of losing donations, supporters or even board members.

Poor reporting can also lead to compliance issues. Inadequate or unclear reports may be a red flag to the IRS that a nonprofit requires investigation which is something most wish to avoid!

The way to fix poor reporting is by automating reporting and using a system to manage and monitor grant funding and accounting. If you’re currently utilizing spreadsheets to track and monitor grants, you are missing out on many of the benefits of automating grant reporting, including:

  • Improved accuracy of reports
  • Increased efficiency
  • Better financial visibility (especially when integrated with accounting systems)
  • Enhanced productivity

Although a grant management system is an investment, it is money well spent since it improves reporting tremendously. It makes it easier to report in a clear and transparent manner about grant funds that your board, directors, and donors will appreciate.

Mistake 2: Subjective Review Process

How you assess grant applications is important. Do you utilize a rubric? Ensure anonymity from the submitters? These are important steps to ensure a fair review process.

Yet many grant committees fail to use an objective review process. Inherent biases can creep into a subjective review process.

To ensure full objectivity, use a digital portal in which grant submissions are checked against a standard rubric. A large, diverse review committee can also prevent subjective responses by providing a variety of perspectives during the review process.

Mistake 3: Not Adhering to Compliance Best Practices

If your organization is new to the grant-making process, there’s a lot to learn. If your organization is required to adhere to specific reporting protocols, be sure to ask the right questions upfront to obtain relevant data for reporting purposes. Additionally, if you can only provide grants to valid, registered 501(c)(3) organization, be sure to state this upfront as well.

Mistake 4: Overlooking Eligibility Requirements

Place eligibility questions at the start of the grant submission process so that ineligible applicants know immediately their status and do not waste time completing the submission. Many nonprofits make the mistake of leaving the submission requirements to the end, which is frustrating for applicants.

Mistake 5: Failing to Ensure Equitable Processes

Diversity and equity are becoming an increasingly important part of the grant-making process. To ensure fair and equitable treatment for all applicants, an anonymous, automated submission process is best.

There’s another side to diversity and equity—the reviewers. Make sure you have a large and diverse pool of people ready to review the applications. Ensure that everyone has been briefed on the rubric. They will have both the objective requirements (the rubric) and their own personal viewpoint on the submissions so that if two or more submissions are close by the rubric score, the discussion that ensues will consider multiple viewpoints.

Automating the Grant Process

We’re believers in the power of software to make many processes at a nonprofit easier, faster, and efficient. That includes the grant process. Schedule time with us to review Grant Process Software and we can help you avoid these five potential mistakes.

Welter Consulting

Welter Consulting bridges people and technology together for effective solutions for nonprofit organizations. We offer software and services that can help you with your accounting needs. Please contact Welter Consulting at 206-605-3113 for more information.

Solving Three Common Grant Management Challenges

By | Grant Management, Nonprofit | No Comments

There are over 900 federal grant programs offered by 26 different grant-making agencies and over 86,000 foundations offering more than $62.8 billion in funding. If your organization taps into any of these funding sources, it is vital to make proper grant management a priority.

Grant recipients must take specific steps to ensure that funds are managed properly. These steps follow both nonprofit accounting best practices and guidelines issued by the U.S. Government Accountability Office and by state agencies, such as the Washington state office of grant management. Nonprofits often miss several steps in the management process. The following are three common grant management challenges, suggested ways to address them, and a proposed solution to streamline grant management throughout your organization.

Grant Management Challenge #1: Lack of Internal Controls

Have you documented your current grant management processes? Internal controls map out the process by which grant funds are received, allocated, and documented. Without written processes for the management of grants, the process may shift into areas that put it out of compliance with applicable laws.

To ensure your organization is following a compliant grant management process, document the steps your group takes to manage the entire process. Process mapping may be useful to view the workflow from start to finish and identify any potential gaps.

Lastly, make sure that all processes are written. If changes are made over time, they should be documented. All internal control documents should be kept in one central location for easy access by the entire team.

Grant Management Challenge #2: Compliance Issues

Documentation requirements also extend to program performance too. Measure and document progress, performance, and plans that utilize grant funds. Failure to do so could put your organization in jeopardy of losing grants. You must monitor and record all relevant activities to provide compliance documentation to the granting organization.

One important step to meet this challenge is to centralize both the grant management function and the records. Many organizations are adding a grant manager position to their staff to ensure full compliance with all regulations. Such a position ensures that one person has their eye on the many areas of compliance record-keeping and reporting needed to satisfy granting organizations.

Grant Management Challenge #3: No Central Grant Management Resources

As mentioned above, some nonprofits are adding a position to their accounting departments whose sole duty it is to manage grants. While this may not be possible in all nonprofits, most can at least add resources to centralize grant management.

Some centralized resources that improve grant management include:

  • Cloud-based file sharing platforms to enable collaboration on documents
  • Grant management software that automates much of the record-keeping
  • A single person responsible for the grant management process, or, if that is not feasible, someone in the accounting or development office who has this on their list of accountabilities

Solve Your Grant Management Challenges

One tool that can help solve all three grant management challenges is grant management software. Software such as Amplifund, available through Welter Consulting, manages many aspects of the grant process including recording, management, and reporting.

If you’re pursuing more grants this year or struggling to manage your existing grant resources, now is a good time to consider software to help you centralize data and streamline resources.

About Welter Consulting

Welter Consulting bridges people and technology together for effective solutions for nonprofit organizations. We offer software and services that can help you with your accounting needs. Please contact Welter Consulting at 206-605-3113 for more information.

7 Tips to Create a Fair, Efficient, and Transparent Grant Review Process

By | Grant Management, Nonprofit | No Comments

What is your organization’s process for reviewing grant applications? Whether you run a small, local organization that provides grants to deserving individuals or groups in your community or a national foundation, having a fair, efficient, and transparent grant review process is essential to building trust with both constituents and applicants. Here are seven tips to help you create such a process for your group.

7 Best Practices for a Grant Review Process

If your grant review process could use some tweaks, the following best practices can shape it into the best it can be. With these tips, you’ll ensure a fair process that helps you choose the best recipients.

  1. Create a detailed rubric

A well-written and detailed rubric ensures all reviewers on the team will use the same criteria for evaluating applications. It helps ensure objectivity and fair scoring on the key points required in the grant application. Define the objective and each layer of the rubric, and detail how the scoring impacts the overall selection.

  1. Be transparent with applicants

Offer all applicants the same details. Publish them publicly and ensure everyone can attend any briefings or question and answer periods, if applicable. Share details of the review process and the selection criteria so applicants feel like they’ve been treated fairly.

  1. Create a balanced review team

Make sure your review team includes a diverse mix of people who can fairly and honestly review the applications while adhering to the rubric. A diverse mix of ages, genders, and cultural/societal perspectives honors your organization’s commitment to equity. Communicate the goals of the process clearly and ensure all voices are heard during discussions.

  1. Hide information

Hide information that may unfairly persuade the scoring. Names, genders, and similar information may be safely hidden by creating a numerical key that assigns an identification number to each application. By hiding identifiable information, you help ensure a neutral, balanced, and fair review.

  1. Build consensus

When there are disagreements—and there are sure to be at least some—work hard to listen to one another on the review team. Build consensus by finding common ground. Use the rubric thoroughly and rely upon it to guide any discussions.

  1. Create a numerical scoring system

Whether you average the scores from the rubric or use a weighted average, a numerical scoring system makes it much easier to select recipients without allowing unconscious bias to creep into the selection process.

  1. Use software to manage grant applications

Software has come a long way, and cloud software enables nonprofits to affordably tap into powerful systems that can make tasks such as grant management much easier. There are many benefits to using a digital process: clear communications, easier sharing of documents, streamlined review process, and reducing manual tasks. By using software to manage the grant review process, you’re able to focus more on the quality of the applications and less on the process itself.

A fair, honest, ethical, and equitable grant review process builds your organization’s reputation in the community.

Welter Consulting

Welter Consulting bridges people and technology together for effective solutions for nonprofit organizations. We offer software and services that can help you with your accounting needs. Please contact Welter Consulting at (206) 605-3113 for more information.