Nonprofit organizations rely heavily on grants to support their operations and missions. In fact, grants are now the second-largest source of nonprofit funding, behind individual donations. Securing grant funding, however, isn’t easy. Competition for funds provided by foundations, governments and corporations can be fierce. In addition, once a nonprofit receives a grant, tremendous pressure follows to manage it effectively and demonstrate impact, thus establishing a reputation for success that will open doors to future grant opportunities.
With so much riding on each grant, nonprofits must maximize every effort in the grant management process, starting with developing a set of grant application and management skills covering everything from understanding each grantor’s requirements to ensuring compliance during project execution. The following 25 grant management best practices offer actionable strategies nonprofits can master to turn challenges into stepping stones to success.
Key Takeaways
- Grants play a critical role in helping nonprofits achieve their mission.
- The ability to apply for grants and manage them successfully builds credibility and trust among a nonprofit’s donors, paving the way for future funding opportunities.
- Armed with an efficient grant application process, a nonprofit can home in on projects that align with its strategic goals and deliver sustainable community impact.
- Managing the grant life cycle requires a wide range of skills, including community outreach, financial management, project management, risk management, performance monitoring and communication.
- Best practices for successful grant management include prioritizing funding needs, aligning efforts with strategic goals and objectives, and building a culture of accountability, feedback and collaboration.
25 Grant Management Best Practices
The following 25 grant management best practices detail a combination of specific skill sets, such as financial management, and culture-building initiatives, such as developing an environment steeped in continuous learning and organizational diversity. Following grant management best practices can help fuel the engine for nonprofit growth that treats both success and failure as opportunities to adapt and grow.
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Prioritization of Funding Needs
Nonprofits must address many diverse details to support their missions. For example, a mission to end local homelessness faces challenges when it comes to building public awareness, providing immediate shelter to those in need and improving mental health services. Unfortunately, each component comes at a cost and, given the limited resources at most nonprofits, it’s imperative to prioritize the projects that require immediate attention and must receive the lion’s share of available resources.
Failure to set clear funding priorities can have serious consequences. It could dilute a nonprofit’s impact by spreading its grant application efforts across too many projects. Or, it could lead to obtaining grants earmarked for too broad a range of needs, which might lessen the nonprofit’s ability to have an impact on any of them.
This is why clear communication across a wide range of stakeholders, including board members, executive leadership, program managers, finance teams, volunteers and even potential grantors, is so important. One way to help the prioritization process is to calculate a budget for each potential initiative and then align each initiative with strategic objectives. This data-driven approach can help identify high-impact projects most likely to deliver the best return on investment.
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Dedicated Grant Management Calendar
Juggling multiple grant applications through their various stages can leave nonprofits in a reactive pattern of constantly responding to urgent deadlines. Last-minute efforts often result in poor quality applications and stakeholder reports, which can damage a nonprofit’s reputation within the grantor community.
A grant management calendar is an essential way for nonprofits to stay on top of multiple grant application deadlines, report due dates and renewal periods. But grant management calendars provide more than a means to manage deadlines. They ensure that operations flow smoothly and keep the grant management process chugging along like a well-oiled machine.
Consider assigning dedicated resources to oversee and share the grant management calendar among key stakeholders. This will create a collaborative document that can be reviewed and updated regularly.
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List of Possible Donors
Building a detailed, targeted list of potential donors can help nonprofits craft compelling stories, proposals and updates that resonate with each one. For example, by understanding the values of a foundation committed to climate change, an eco-driven nonprofit can align its proposal to suit the foundation’s goals and thus stand out among other nonprofits competing for the same funding.
Without a donor list, nonprofits are more apt to take a scattershot approach to grant applications, without identifying the best opportunities. This results in wasted time and resources, leaving the nonprofit spread too thin and facing a likelihood of rejection. Worse, it might find itself unaware of opportunities with donors more likely to provide funding.
A list of possible donors goes beyond names, addresses and mission statements. It requires significant research into each potential grantor’s area of interest, its giving patterns, previously awarded grants, geographic focus and application requirements. Online databases and community networks can help identify and track potential donors. Nonprofits should also engage with board members, staff, volunteers and existing donors to help identify potential grant opportunities.
Ideally, donor lists become the foundation of a strong, relationship-building process that forges a lasting connection between a nonprofit and its supporters. Customer relationship management (CRM) systems — or, as they’re known in the nonprofit world, constituent relationship management systems — can not only help organize potential-donor lists but also provide critical data management, communication and automation capabilities that help the nonprofit create closer relationships with potential donors.
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Clear Goals and Objectives
Setting goals and objectives is about more than having aspirations. It involves a detailed process of defining specific, measurable, relevant milestones that are attainable within a specific period of time. Goals represent the desired outcome, while objectives outline specific tasks necessary to achieve the goal. For example, a nonprofit committed to clean-water initiatives might set a goal to install 100 water purification systems over the course of a year, while an objective might be to train local resources to maintain the systems.
Goals and objectives have both external and internal benefits. Externally, they outline a clear plan for generating trust and credibility with potential donors, who will then feel more secure about making an investment. Internally, once donations are received, it becomes possible to provide a road map for tracking goals and objectives during implementation, forming the basis for reporting progress to stakeholders.
Setting goals and objectives requires engagement across a wide group of stakeholders, including staff, volunteers and beneficiaries. It can also prompt discussions with potential donors to ensure that goals align with community needs and organizational capacity. A project without defined goals and objectives is almost always going to set the nonprofit up for lackluster results — or even failure.
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Detailed Planning
Detailed planning is the secret sauce that turns a nonprofit’s ideas into reality by outlining every aspect of the grant process, from application and implementation to reporting and evaluation. A comprehensive plan improves efficiency and aligns activities by clearly communicating objectives, timelines, resources and potential obstacles. Detailed planning also reassures donors that the nonprofit not only has a goal for its funding, but a blueprint to ensure success, as well.
Lack of planning in the grant application and management process can create a domino effect across nonprofit operations, leading to miscommunication, missed deadlines, lost opportunities, budget overruns and legal issues, if funds become mismanaged. Not only can these consequences lead to failed applications and doomed projects, but they can also damage the nonprofit’s reputation among donors, beneficiaries and team members. Damage to brand reputation can have long-term effects for nonprofits, making it difficult to obtain future grants, for example.
Nonprofits should start the grant-planning process early, collaborating with stakeholders to divide the process into smaller components, build a checklist of tasks and assign responsibilities. Revisit these plans regularly and adjust timelines and responsibilities, as needed, as well as any risk management and contingency strategies established to counteract inevitable obstacles.
Be sure to leverage software tools to document plans, track progress and ensure transparency with stakeholders. CRMs, too, are useful for automating workflows and managing grant plans.
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Strong Communication
How well a nonprofit communicates with its stakeholders about project goals and overall progress sets the tone for the future by establishing trust and accountability. For example, community leaders want to know that the nonprofit understands their needs, builders seek reassurance that the nonprofit understands technical requirements, volunteers need to understand their responsibilities and regulators require timely progress reports.
What’s more, well-informed stakeholders who feel involved in both the grant application and management process will be more likely to become advocates for the nonprofit’s mission. When this happens, the nonprofit will enjoy faster, more decisive problem-solving because it has fostered a culture of two-way communication and feedback, where all stakeholders are invested in finding a resolution. Conversely, a lack of clear communication about project progress can leave donors feeling apprehensive, jeopardizing the basis of their relationship.
Building trust demands transparency. A nonprofit can’t simply tout its successes; it needs to be equally candid with donors about things like delays in timelines and budget overruns. The linchpin is consistent, collaborative communication — think: tailored messages across multiple channels, such as regular live meetings, emails, social media and text messages — so every stakeholder feels a sense of ownership and alignment with the cause.
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Budget Management
While receiving a grant is a reason for celebration in the nonprofit world, the reality is that that is where the real work begins. If a nonprofit has any hope of receiving future grants, it’ll need to demonstrate a track record of using grant funds efficiently in support of its missions. The most important way to keep projects on track — and donors happy — is to meticulously manage the associated budgets through detailed planning, monitoring, controlling and reporting of financial resources. By outlining exactly how funds will be used, the nonprofit can increase the likelihood that the project will succeed. It also builds trust and confidence with donors and stakeholders, which can lead to future funding opportunities from grantors.
Managing a budget requires keen financial management skills and a disciplined mindset. Nonprofits sometimes fall into the trap of underestimating costs in the grant proposal process, thinking they’ll have a better chance of securing funds. The problem is, if the nonprofit wins the grant, its budget will have to be based on those initial estimates, which could hamstring the project. In addition, budget miscalculations can lead to overspending in one area, which leads to reduced spending in another, eventually jeopardizing both the project and the nonprofit’s reputation. Technology, in the form of comprehensive accounting systems, can help nonprofits maintain efficient workflows, anticipate problems and stay ahead of deadlines.
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Performance Monitoring
The continuous tracking, assessment and analysis of a nonprofit project’s progress, known as performance monitoring, is as critical for internal stakeholders as it is for donors and other key constituents. For external stakeholders, knowing that their funding is helping to achieve the project’s goals promotes integrity and accountability for a nonprofit. Internally, performance monitoring is a critical way for the nonprofit to demonstrate the importance of its mission to staff members and volunteers, who realize their efforts are having an impact.
Effective performance monitoring requires rigorous data analysis so the nonprofit can see what’s working and what isn’t, and then make informed decisions about how to adapt to challenges. Take the example of a nonprofit working on improving literacy in rural communities that receives funds to build libraries, conduct workshops and hire local teachers. A performance monitoring program might evaluate library usage, workshop effectiveness and literacy scores. If data indicates that the workshops aren’t delivering the expected results, the nonprofit can quickly adjust the program curriculum.
Technological solutions can also provide a huge benefit when monitoring grant performance by simplifying how nonprofits collect and analyze data. Financial management systems, for example, have advanced features for data collection, real-time project tracking and analysis, budget monitoring, compliance management and automation. And CRM systems with automation and communication features allow nonprofits to share performance monitoring data with stakeholders.
Technology aside, it’s important for nonprofits to clearly define performance measurements that align with the goals of each grant. A critical, but often overlooked, factor in performance monitoring is scheduling regular communication with relevant communities to get feedback on project performance.
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Regular Progress Reporting
Progress reports are a staple of all donor communication strategies. Without them, donors are left wondering how their funds are being used, which can erode trust. There can also be serious legal implications, if donors and regulators suspect that a lack of reporting indicates financial wrongdoing.
Regular progress reports bestow grant providers with transparency on specific activities. In the previous example of the nonprofit seeking to improve literacy rates by means of new libraries and reading workshops, its regular reports to grantors on library construction, visitors and workshop attendees serve to open a window into progress. Regular reports can also open a feedback loop through which to seek assistance, guidance and even further resources from grantors.
Progress reports can be time-consuming, especially for smaller nonprofits with limited resources. Technology, in the form of financial management, project management and CRM systems, can offer easy-to-use and automated reporting tools that make reporting more efficient. In general, nonprofits will benefit from aligning reporting schedules with each grant provider’s expectations. Involving grantors in this process allows nonprofits to set clear expectations from the beginning, from producing templated reports that align to grantor expectations and facilitating agreement on a reporting calendar to establishing open communication channels.
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Internal Controls
Think of internal controls as a formal extension of the financial management and budgetary practices discussed above. They refer to a system of processes, checks and balances that nonprofits follow to ensure the integrity of financial and accounting information, establish accountability and prevent fraud. Without internal controls in place to flag issues, grant funds may be inadvertently misused or misallocated. At the very least, this can be embarrassing for a nonprofit, but, in the worst cases, it can have serious legal consequences. For example, some grants carry restrictions as to how funds can be spent. Misuse can lead to fines, repayment of funds and even criminal charges.
Implementing internal controls protects the grantor’s assets. During the grant application process, nonprofits need to demonstrate strong internal controls to ensure both the reliability of financial records and their compliance with laws and regulations. Once a grant is awarded, internal controls provide the framework for managing funds appropriately and maintaining transparency with stakeholders. Combined with strong budgetary practices, effective communication and detailed planning and reporting, internal controls help build trust in the eyes of grant providers and the public.
It’s important for nonprofits to define roles and responsibilities for internal controls, and review and update procedures regularly. The concept of “segregation of duties” — dividing financial responsibilities among various individuals or teams to prevent any one person from gaining too much control over financial management — is also critical to prevent conflicts of interest and fraud. Regular grant audits is another nonprofit best practice.
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Compliance
When foundations, corporations, state and local governments, and other donors award grants to nonprofits, they often specify regulations, policies and procedures for how the funds can be used. Such rules — for example, the timing for using the funds or the projects for which they can be used — help grant providers guarantee that their donations will be used in ways that align with their own missions. For nonprofits, complying with grantors’ regulations and restrictions doesn’t just mean that the money will be spent properly, it also fosters trust and accountability, which reinforces longer-term relationships.
Compliance isn’t easy, however. Nonprofits must stay abreast of often complicated guidelines and keep careful records of expenses. Failure to meet compliance requirements can also be costly. It’s possible the donor could rescind the grant or that the nonprofit could face fines and legal actions if stakeholders suspect fraud. Not to mention that it could jeopardize a nonprofit’s relationship with an important donor.
On the other hand, demonstrating the ability to comply with grant provisions illustrates a nonprofit’s commitment to its mission. A track record of compliance also opens the door to further grant funding. In addition, compliance has tangential benefits for project management, because following guidelines simplifies decision-making and often leads to more efficient project execution.
Maintaining compliance begins before a grant is awarded by establishing a compliance culture, where roles and responsibilities are clearly assigned and teams are trained on compliance procedures. Nonprofits should also understand the terms and conditions of their grants — ideally, before they apply for them, but certainly before they accept them. Grant management software can help nonprofits stay on top of compliance requirements.
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Recordkeeping
At the core of most grant management best practices — from budget management and performance monitoring to progress reports, compliance and everything in between — is the ability to maintain accurate records. Successful recordkeeping goes well beyond tracking receipts and invoices; it also includes comprehensive, up-to-date documentation about meetings, decisions, progress reports and more.
Accurate recordkeeping is an essential component of the grant management process. In the application stage, for example, accurate records of previous grants help nonprofits demonstrate to potential donors how effectively they can track and use funding. Once grants are awarded, maintaining accurate records helps with a multitude of important processes, from tracking progress to monitoring expenses, making informed decisions, identifying successes and failures, and preparing for audits.
The importance of recordkeeping can’t be overstated, especially because of the often complex rules and restrictions most grant providers place on their funds, as noted above. Plus, some grant providers prefer to reimburse expenditures, rather than pay up front. Without accurate records, nonprofits might inadvertently submit expenses that don’t qualify, according to the grant terms, which reflects poorly on the nonprofit and puts future funding at risk. Worse, the nonprofit could exceed its budget and, without accurate records, struggle to justify expenses in the event of a financial audit, which, again, could lead to fines and legal issues.
Maintaining accurate grant records requires a detail-oriented mindset for constant documentation. Nonprofits would be wise to organize all supporting documents — invoices, expenses, the grant application, the grant award notice, amendments, budgets, financial reports, progress reports, audit reports, any communication with the grant provider, everything — in a central location. Technology, such as accounting software with grant management capabilities, is available to make grant reporting, budgeting tracking and auditing more organized and less time-consuming.
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Risk Management
In the context of nonprofit grants, risk management refers to understanding everything that can potentially go wrong in the grant application and management process, as well as building safeguards to address issues that do arise, quickly and effectively.
Risk management strategies can’t prevent problems from occurring, but they can help eliminate surprises that carry profound consequences. Say, for example, a nonprofit receives a grant to fight local homelessness. Without assessing the risks inherent in creating a plan that includes building temporary shelters, the nonprofit could be blindsided by community resistance. Other potential risks could include building cost increases or changes in city regulations that impact construction. If the nonprofit hasn’t prepared for these challenges, its efforts could get stalled by budget overruns, compliance violations, financial penalties or legal issues.
By identifying potential risks early, nonprofits can develop strategies to mitigate them. Strong risk management skills demonstrate to donors and other stakeholders that a nonprofit has the expertise to plan for all scenarios, which enhances a nonprofit’s reputation and ability to secure future funding.
Managing risk starts with establishing a risk management framework that includes several important steps for each grant:
- First, consult stakeholders, including the grant provider and internal parties, about all perceived risks.
- Next, evaluate the likelihood of each potential risk and assess possible impact.
- For each identified risk, develop a mitigation strategy, such as securing additional funding or engaging with local officials. Roles and responsibilities for determining when mitigation strategies need to be used should be clear.
- Finally, continually monitor each risk scenario throughout the project life cycle and communicate updates with key stakeholders.
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Collaboration
Securing a grant is never the work of one individual or team; rather, it’s a concerted effort across the organization — and often beyond it. For example, it’s unlikely that a health care–driven nonprofit can win grant funding without significant collaboration among its internal teams, local health care experts, government agencies and even other nonprofits. Each of these groups can provide critical expertise and resources, resulting in more compelling applications. Conversely, failure to align with local needs and culture ultimately undermines success.
Collaboration doesn’t stop after a nonprofit wins a grant. Without the same level of coordination between internal and external stakeholders, a nonprofit may duplicate efforts, waste resources and, ultimately, fail to meet its objectives. Facilitating collaboration brings the added benefit of uniting the many internal teams involved in grant applications and management, including proposal writers, program managers and finance teams.
It’s also helpful to define roles and responsibilities and establish workflows that encourage teams to remain in contact. Project management software that customizes workflows can embed regular communication among teams. Ultimately, collaboration is as much about fostering a culture of respect and valuing each other’s contributions as it is about processes.
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Transparency
Establishing open and honest communication about grant plans, activities and financials with donors, beneficiaries, employees, volunteers, the public and other collaborators solidifies confidence that nonprofit funds will be used to meet objectives. On the other hand, a lack of transparency can lead to unnecessary speculation about wrongdoing, which can erode relationships with donors, threaten project success and, over time, damage a nonprofit’s credibility within the donor community.
One way for nonprofits to enhance transparency is to use third-party evaluators, such as auditors, to review financials. Another best practice is for nonprofits to use their websites to share as much public information as possible, such as annual reports detailing projects, activities, progress reports and financial statements. This level of transparency will boost accountability, foster stronger relationships with stakeholders and anchor a reputation for integrity.
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Capacity Building
To successfully apply for and manage grants, nonprofits need a wide range of skill sets, ranging from understanding the universe of available grants to proposal writing, project management, budgeting, compliance, stakeholder communication and reporting. Enter capacity building, or specialized skills development, without which even the most well-intentioned nonprofit project could fail to secure funding. A lack of understanding about grantor expectations, for example, could result in proposals that don’t support the grant provider’s own mission. Or, a lack of budgeting skills could result in project delays, cost overruns and budget shortfalls that halt projects, risk future funding and tarnish nonprofit reputations.
Nonprofits can prioritize skills development through proper training and informal, knowledge-building tools, such as webinars, workshops and mentorships. Similarly, investing in regular compliance training can help nonprofits stay ahead of ever-changing regulations that can impact project success.
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Sustainability
To some, “sustainability” refers to maintaining a balanced and healthy global natural environment. In the context of nonprofit grants, it refers to the ability to demonstrate that donor-driven initiatives will continue to have a lasting impact, beyond the expiration of grant funds.
Sustainability is a particularly important concept in the grant application process because grant providers don’t want to invest in temporary fixes to critical problems. They want to fund projects that serve as catalysts for change and drive a wide community participation that spawns its own self-sustaining momentum. It’s equally as important for nonprofits to present overall financial sustainability — that is, the ability to build multiple revenue streams capable of supporting operations in good times and bad.
Sustainability plans, for both projects and overall nonprofit operations, instill confidence in grant providers by fortifying the nonprofit’s reputation for reliability and long-term thinking. Grant applications that outline a clear strategy for encouraging local partnerships and generating income that sustains initiatives are likely to stand out. To that end, nonprofits should seek partnerships with local governments, community stakeholders and even other nonprofits with similar missions. They should also explore various income-generating activities that align with their projects, such as an environmental nonprofit that sells reusable shopping bags.
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Ethical Considerations
Ethical standards essentially define a nonprofit’s brand identity, legally and morally. Not only do a nonprofit’s principles and values guide its decision-making and actions, they also form the foundation of trusted relationships with grant providers, internal and external stakeholders, and the public.
For nonprofits, incorporating ethical standards into its grant application and management practices isn’t merely about creating a list of ethical guidelines; it’s also about its commitment to operating with integrity, fairness and responsibility. Without this moral compass, nonprofits may misuse funds, ignore grant requirements and focus on lining individual pockets at the expense of fulfilling a mission, for example. Inevitably, unethical behavior will result in a loss of future funding opportunities, irreparable damage to reputation and even legal consequences.
To build a strong ethical culture, nonprofits should first establish clear ethical guidelines, based on perspectives gathered from diverse groups across the organization to avoid unintended bias. These guidelines should be reviewed and revised regularly. Nonprofits also need to emphasize continuous ethics training internally to reinforce a strong ethical environment. This may include establishing confidential communication channels for reporting unethical behavior and empowering leaders to address ethical concerns quickly and directly.
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Diversity, Equity and Inclusion
Diversity, equity and inclusion (DEI) initiatives are top of mind for all types of businesses. Not only is it critical for nonprofits to incorporate DEI into their own operations, but most potential grant providers now insist that these values be reflected in nonprofits’ grant application and management practices.
To clarify, diversity refers to ensuring that nonprofits incorporate many heritages, experiences and perspectives, including race, gender, age and socioeconomic status. This might be reflected in a nonprofit’s history of hiring people with diverse backgrounds. For its part, equity involves providing fair treatment and access to opportunities, recognizing that each group has unique needs. An example of an equity initiative would be providing one-on-one training to employees with disabilities. Inclusion initiatives help ensure that these diverse groups feel valued and empowered to contribute. This could mean creating employee resource groups (ERGs) to support different communities, such as women and LGBTQ+.
Pursuing DEI initiatives isn’t just about doing what grant providers want. It’s also smart business. Diversity in employment practices can lead to more innovative proposals and programs, better understanding of a nonprofit’s communities, greater contributions and impact across an organization, and stronger collaboration and partnership, both internally and externally.
Most companies today hire dedicated DEI staff to help promote initiatives and actively recruit employees and volunteers from diverse backgrounds. This is an excellent best practice for nonprofits with the resources to do so. It’s also critical for nonprofits to seek input from their communities, to understand their unique needs and perspectives, and ensure that their programs are both inclusive and equitable.
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Technology
Grant management is complex, requiring coordinated efforts across finance, marketing, communications and project teams, among others — and often operates under considerable time constraints. It tackles everything: proposal writing, tracking deadlines; managing documents, budgets and risks; reporting; compliance; and communicating with stakeholders.
In today’s world, trying to manage so many processes without technology would be like trying to assemble a jigsaw puzzle in the dark. Without technology to improve efficiency and automate processes, nonprofits could lose out on grants or mismanage projects because of misplaced documents, missed deadlines or inaccurate reports.
There are a host of software tools that can help nonprofits streamline, organize and automate various stages of the grant management process. For example, cloud-based CRM and accounting systems, as well as specialized grant management tools, can improve communication, limit errors, enhance security and automate time-consuming processes, such as approvals. As a result, nonprofits can make the most of available grant opportunities, focusing less on operations and more on fulfilling their missions.
Of course, investing in technology requires funds and expertise that smaller or less tech-savvy organizations may not have. To overcome this, they can seek grants that specifically help them expand technological skills. In addition, some large technology companies discount their products and services for nonprofits. Before seeking technology grants or assistance, however, nonprofits should assess their needs by researching what similar organizations use. They also can reach out to technology providers for guidance about options.
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Learning Culture
It may not get as much attention in the grant management process as best practices for budget management and technology, but developing a learning culture is no less important for nonprofits.
Not only does continuous learning, whether individually or organizationally, impart knowledge, but a key byproduct is that it creates resilience and adaptability. For example, if a nonprofit loses a grant opportunity, it would be natural to adopt an “on-to-the-next” mentality. But doing so neglects the tremendous learning opportunity rejection can provide by asking for feedback about why a proposal failed.
Instituting a learning culture can be simple, such as by taking the time to regularly celebrate wins and discuss losses. But training is also essential. Nonprofits with limited resources might start by dedicating a small budget for online education, for example. The person who attends the training can then share what they learned with colleagues.
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Feedback
Feedback can drive nonprofit growth by highlighting strengths and areas of improvement. Team members can offer unique insights into workflow inefficiencies that are slowing down grant submission processes, ultimately saving time and money. Beneficiaries within nonprofit communities can offer feedback on the impact and effectiveness of nonprofit projects, which can be critical in helping nonprofits pivot projects to areas their communities need most. Remember that grant providers are also an important source of feedback, for example, by advising ways a nonprofit might improve its grant proposals, especially if its last proposal didn’t win funding.
Opening feedback channels may be more difficult than it would seem, however, more often for psychological reasons than because of any cost or resource factors. It’s human nature to resist criticism, after all. Nonprofits seeking strong feedback loops should take care not to inadvertently create a culture of blame. Start by reinforcing the position that feedback is a positive learning tool, not a critique. Regular surveys and brainstorming sessions are an excellent way to insert feedback into everyday operations. It’s also important for nonprofits to act on that feedback and share results.
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Evaluation
Evaluations help nonprofits discern what works in their grant management process — and what doesn’t. Whether performed by a nonprofit’s internal team or by hired experts, evaluations should be done regularly and take everything into account, from the grant application process and project planning and development to impact evaluations after grant funds expire. Evaluating its grant application process, for example, can help the nonprofit identify whether it overlooked a significant community stakeholder or omitted crucial data points. When shared with donors and grant providers, evaluations also help reinforce accountability and trust.
Unfortunately, regular evaluations can be time-consuming, costly — and intimidating, if they uncover activities or patterns that could harm future grant prospects. That’s why it’s important for nonprofits to regard evaluations as learning opportunities and not as audits or critiques. The nonprofit may want to begin slowly, perhaps with some internal evaluations of specific projects. Eventually, with proper budgeting, it can expand its efforts and conduct third-party evaluations of a wider range of operations. External stakeholders, such as beneficiaries and donors, should be involved in evaluations whenever possible.
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Grant-History Archive
Because so many detailed processes are involved in grant management, maintaining a comprehensive history of past successes and failures — known as a grant-history archive — is akin to having a wise prophet on hand to guide a nonprofit’s efforts. When nonprofits meticulously compile, store and organize all past grant applications, feedback, reports and outcomes, they have access to a powerful tool. A grant-history archive can not only accelerate the grant application process, but it also provides a foundation for more successful applications, projects and community impact. In addition, the ability to show grant providers a meticulously maintained grant archive demonstrates attention to detail, commitment and transparency, which can boost credibility with donors.
All too often, a nonprofit’s grant-history details are dispersed across multiple systems or spreadsheets, making it difficult to construct a complete archive of grant application documents, templates, grant provider profiles, budgets, feedback, progress reports, communication records and more. And without a comprehensive grant-history archive, a nonprofit also runs the risk of repeating past mistakes. For example, perhaps it received feedback years earlier that a lack of technical expertise limited the success of a project. Without the ability to review that feedback today, the nonprofit could miss the opportunity to strengthen that section of its application to obtain a similar grant.
Fortunately, technology, in the form of project management, database and communication systems, can assist in assembling and updating a grant-history archive. Grant management software may also include archive features that make it easier for nonprofits to collect and store critical information. And, as they grow and add systems for accounting and CRM, for example, nonprofits can implement solutions with application program interfaces (APIs) that make it easier to integrate systems and data.
Investment in technology can pose its own challenges, however, especially for smaller nonprofits with limited technology expertise or tight budgets. In such instances, installing a cloud-based storage solution, where folders can be created to collect various documents, would be an excellent first step. Start by archiving a single grant from proposal to execution, then gradually add more.
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Continuous Improvement
Continuous improvement is a mindset that reflects a commitment to turning learning into action. Continuous improvement underscores a nonprofit’s ability to adapt, evolve and refine methods, strategies and operations. It impacts everything, from how grant applications are written to how they’re recorded, stored, evaluated and reused. It also illustrates how the nonprofit assesses outcomes, gathers feedback and translates that information into actionable strategies that grow its mission and deepen its impact. It should go without saying that any nonprofit that isn’t committed to improvement risks stagnation and failure.
The most important components of continuous improvement include education, learning programs and comprehensive communication channels for soliciting feedback both from within the organization and externally. It also includes the use of tools and processes for storing and updating data — proposals, budgets, reports, meeting notes, etc. — in a central hub that feeds companywide knowledge.
Manage Grants Easily in NetSuite
While NetSuite is known for pioneering cloud-based, integrated systems that help companies of all sizes manage everything from accounting to human resources, it also offers a host of specific tools to help nonprofits. NetSuite’s robust accounting and fund management capabilities, for example, help nonprofits efficiently manage grants, track restricted funds, generate accurate financial reports and streamline budgeting and expense management processes. NetSuite’s powerful features deliver transparency, accountability and compliance with regulators, donors and other stakeholders.
A key advantage of NetSuite’s nonprofit solutions is that they’re part of an integrated suite of products that also offer capabilities for constituent relationship management, fundraising, marketing, project management and analytics in a single solution. For example, nonprofits can leverage NetSuite’s SuiteCommerce platform to create online donation portals and launch fundraising campaigns. With NetSuite’s tightly integrated system to manage operations, nonprofits leverage a single database across operations to centralize donor, grant and program data for a holistic view of the grant management process. NetSuite also delivers task and workflow automation tools that create automatic deadline reminders for grant applications, report submissions and follow-ups, in addition to facilitating a streamlined approval process.
As part of NetSuite’s Social Impact program, nonprofits can receive discounts on software, as well as access to two nonprofit communities: one that shares best practices for growth and another that offers volunteer services from NetSuite employees.
Securing and managing nonprofit grants is a detail-oriented, often daunting process that includes diverse stakeholders, tight deadlines and the need for transparency. Successfully navigating this complex process is how nonprofit reputations are built, establishing a track record for accountability and credibility within donor communities and driving future grant opportunities. The 25 best practices in this article offer a blueprint for not only crafting winning grant management processes, but, just as importantly, creating a culture and mindset of continuous learning and improvement that drive growth.
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Grant Management Best Practices FAQs
What is the role of technology in grant management?
Technology can play a key role in effective grant management. Grant management software specifically made for nonprofits has multiple capabilities to help with applications, tracking and management of grant funds. In addition to offering program management, accounting and reporting capabilities, grant management software can help automate processes, such as approvals, to make grant application and management more efficient and accurate. Nonprofits can also leverage software for accounting and constituent relationship management (CRM) to assist with grant management.
How can I ensure effective collaboration among project team members and stakeholders?
Collaboration between nonprofit staff and key stakeholders, such as donors, volunteers and community members, is an essential part of the grant management process. To foster greater collaboration, nonprofits need to establish a culture of communication, such as holding regular meetings for sharing updates, challenges and achievements. Software tools, such as group messaging systems and project management software, can also fuel greater collaboration. So can team-building activities. For example, “escape rooms” offer a fun way for teams to collaborate by solving clues to free themselves from locked rooms.
How do nonprofits identify potential funding sources for projects?
There are multiple ways for nonprofits to identify funding sources for projects. Grants, for example, are a major source of nonprofit funding; grant providers can be found by researching public databases, such as grants.gov. Nonprofits can also use their internal networks, such as current and previous grant providers, board members and community leaders, to build detailed lists of potential donors.
What makes a good grant manager?
Successful nonprofit grant managers possess a combination of organizational, analytical and communication skills that allow them to manage budgets, track projects, prepare reports and communicate updates. They also should have strong writing skills to create compelling grant applications. Good grant managers revel in managing details, while also facilitating organizationwide collaboration.
What is the common rule in grant management?
The Common Grant Rule, also known as the Universal Administrative Requirements, Cost Principles and Audit Requirements for Federal Awards (Title 2 of the U.S. Code of Federal Regulations), is a set of U.S. government regulations meant to reduce the administrative burden for non-federal organizations that receive government grants. It’s also meant to help prevent fraud and wasted funds with federal grants. The rule outlines a series of standards for financial management and monitoring of government grants, as well as providing guidance on how expenses can be charged. It also establishes audit standards for nonprofits receiving federal awards.
What is a grant management process?
The nonprofit grant management process involves all the steps necessary to apply for and manage financial awards from governments, foundations and corporations. A strong grant management process builds trust internally and with external stakeholders, promising that a nonprofit can meet its mission, which enhances its reputation and can lead to additional funding.
What are critical steps in the grant management process?
Grant management is a detailed process encompassing everything from identifying potential donors and writing applications to managing grant funds and delivering results on initiatives. Other key aspects include maintaining compliance with grant regulations, administering funds, managing projects, budgeting, tracking project outcomes and reporting results.