5 Guidelines for Successful Grants Management

A good grants management process can take some time to develop, but the effort can be worth it.  In this article, you’ll learn some tips and guidelines to help you improve your grants management process, helping your organization to be more efficient and effective in managing funds and delivering on your mission.

1. Treat the grants management process as a team effort.
   • The development, finance, and program teams should all work together throughout the cycle, from proposal development through final reporting.
   • Coordinate on timelines and deliverables up front.  The program staff should work closely with development staff to develop the project proposal, identifying key activities and desired outcomes.  Likewise, program staff should work with the finance department to develop a budget that accurately estimates the funding needs for the program.  Make sure that all departments are comfortable with proposed timelines and reporting due dates.
   • Teamwork should continue once the grant is awarded.  Is the programmatic work advancing as planned?  Are expenses tracking according to the budget?  Identifying problems early provides time to work through them.  It is much easier to ask for a grant extension or budget modification in advance rather than after the fact.
   • Poor internal communication with departments operating independently increases your chances of having trouble at the end of a grant term, possibly resulting in the need to return funds.  This is avoidable by working closely together.
2. Be organized
   • When developing a budget for a proposal, make sure that the format matches your chart of accounts.  Be careful not to itemize expenses in a proposal budget in a way that you cannot track in your accounting system.  Otherwise, you may find yourself stuck doing very labor-intensive, manual reports that are more likely to have errors or cause problems during an audit.
   • Set up a system at the beginning of the proposal process to track correspondence, documents, and deliverables.  Your system should be clear and easy to understand, so that if your organization has staffing changes during the grant period, it is easy to find the relevant documentation.  For instance, often a grant will ask that you present a financial report that compares actual expenses to the budget submitted in the proposal.  You don’t want to be in a situation where you can’t find a copy of the proposal budget, or you aren’t sure which was the final budget submitted. 
   • Make a calendar that tracks all of your reporting deadlines.   It is important to be sure that all relevant due dates are tracked so that you don’t miss a reporting deadline and risk delaying a payment. Especially if your organization receives multiple grants, it can be very helpful to have a holistic look at the reporting for the year.  Pay attention to vacation schedules and institutional activities like the annual audit and the fiscal year end so that you can plan accordingly for issues.  Agree on internal deadlines that are in advance of the funder deadlines so that there is time to review what is being submitted.
3. Be realistic
   • Do you have the capacity to deliver on what you are proposing? If your plans involve hiring additional staff or consultants, does your budget and project timeline reflect the time that it takes to hire and bring a new team member on board? 
   • How would the grant you are requesting impact your organization’s ability to deliver on other programs?  Be aware of what other funding commitments you have and make sure that you are still able to meet programmatic deliverables and budget requirements. Keep in mind that for exempt, salaried staff, working more than 40 hours decreases the effective hourly rate of that individual.  If the only way your organization can meet the deliverables for multiple programs is by working more than 40 hours a week, but you built your grant budgets assuming a 40/hour week rate, you might find you have issues with underspending.
   • Does the budget cover your true cost to deliver the program?  If not, do you have adequate funding from other sources to make up the difference?  Many funders have limits on overhead and other indirect costs that are smaller than the actual costs allocable to a program.  It is important to evaluate and understand the implications of this to your organization up-front or it may cause issues down the road.  This can be especially challenging in organizations that are heavily dependent on program-restricted funds without a reliable source of unrestricted funds.
4. Treat the grant agreement as a legal document.
   • Consider setting up an internal grant review process to be sure that everyone involved has a chance to read through the agreement and understand the terms before the letter is signed.  Does the program team agree with the deliverables?  Is finance comfortable with the reporting deadlines?  Not only does this help to identify potential issues with the agreement, but it helps to ensure that everyone is on the same page and reinforces that the grant process is a team effort.
   • Understand the proper accounting treatment based on the language in the grant.  Is there a time or program restriction?  Does the program restriction match your proposal and the work that you intended to support with the grant funds?  Does the grant period match your budget?  Sometimes proposals are submitted months in advance of a grant being awarded, and it is possible that your organization might have already started incurring expenses that were originally included in the budget submitted to a funder.  If the grant period is not retroactive, you may have expenses that are not covered by the grant.  Likewise, if the grant award amount was intended to fully cover the programs expenses, a mismatched grant period can result in grant funds that aren’t able to be spent.  Pay particular attention to whether there is a conditional clause in the grant agreement that would impact when you record the revenue.
   • Pay attention to the terms and clauses in the agreement.  Some grant agreements include terms covering the use of the foundation’s name, ownership of work produced, assignment of duties, and dissemination of final reports or products developed.  For instance, a newer trend among some foundations is to require work produced using grant funds to be made available open-source, without copyright protection.  Some terms just need to be noted so that you can be sure to comply, while others may involve internal deliberation at your organization to be sure that you are comfortable agreeing to them in exchange for the grant funds.
   • Consider asking an outside party, such as your auditor or legal counsel, to review the grant agreement if you have any concerns.  It is better to understand implications up front rather than after the fact. 
   • Don’t be afraid to talk to the funder if your review identifies any issues in the agreement.  For instance, if the financial report is supposed to be due to the funder 15 days after the grant period closes, ask for a later due date to make sure that you have adequate time to prepare an accurate report.  Likewise, if the grant period doesn’t match the proposal, talk to the funder and see if they’d consider allowing expenses to be retroactively applied.  You won’t always get a yes, but you might be surprised how often you are able to work with your funder to get to an agreement that works for both parties.
5. Communicate.
   • Talk to your funder.  If you have questions, ask rather than assume.  If you think that you have issues with the budget or project timeline, let them know ahead of time.  Be respectful of their time, and don’t harass or nag, but don’t be afraid to maintain an open line of communication. 
   • Talk internally. If the finance department understands the programmatic work, they can help prepare more accurate budgets.  If the development team understands the finance department’s constraints, they can help ensure that timelines are practical.  These are just simple examples, but the benefit of good communication can be much broader.
   • Track important communications.  If a funder agrees to a change in reporting deadline or a budget modification, make sure that you get it in writing from the funder and that you save the information with the grant agreement.  Without documentation, commitments and promises can disappear.

Conclusion

A good grants management process can take some time to develop, but the effort can be worth it.  By working together, being organized, realistic, detailed, and communicative, you can develop efficiency, reduce the risk of mismanaging funds, and improve your funding relationships.