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.