Navigating grant funding can be challenging for nonprofits, but the rewards are worth it. This guide offers step-by-step instructions on grant management, including identifying, applying for, and managing grants effectively, helping your nonprofit secure essential funding.
Grant funding is a significant tool for nonprofits wanting to make a positive impact in their communities. And the money is definitely out there—in 2021, grants made by foundations alone reached more than $90 billion. Yet, the success rate of actually winning a grant can range anywhere from only 10% to 30% on average. In fact, some experts say only 1 in every 10 grant proposals actually get funded.
Grants can serve as invaluable financial resources for your nonprofit, but only if you know how to apply for, win, and manage them effectively.
If you aren’t sure where to begin, don’t worry! We’ve created this beginner’s guide to nonprofit grant management, which will provide you with a clear, step-by-step guide to demystifying the grant management process.
The Basics of the Grant Management Cycle
While there’s a lot that goes into it, the grant management cycle can be broken down into three key steps that we’ve outlined and explained below:
- Identifying potential grant opportunities that are good matches to your organization’s mission.
- Correctly submitting the grant application to the funder.
- Managing the grant funds throughout the life of the grant.
1. Identifying Potential Grants
Even though there are thousands of grants out there, finding the right ones for your specific organization can be a challenge.
For example, resources like Grants.gov and the National Institute of Health announce Funding Opportunity Announcements, while many foundations and corporations announce grants on their websites. However, searching through these sites takes time, and simply Googling grant prospects doesn’t always show you the best opportunities.
Instrumentl also provides important details for each grant, including:
- The grant’s eligibility requirements
- The award amount
- The funder’s geographic location and past awards
- The funder’s fields of work and areas of interest
All of these insights are available within Instrumentl’s platform with a click of a button—that way you don’t waste your time sifting through grants you have no chance of winning. Instead, you can easily identify potential grants quickly, prioritize the ones that best fit your organization, and then move on to the next step in the grant management cycle: developing your proposal!
2. Applying for Grants
Since the grant application process can take anywhere from 15 to 20 hours to complete per proposal, you want to make sure you are only applying for grants you have a good chance of winning.
Pro Tip: You can use this resource to help you decide whether a particular grant is worth going after: Is This Grant Worth Pursuing? 7 Signs It Is.
To apply for a grant, you must first submit a compelling grant proposal that details how you intend to use the funds—usually for a specific project or initiative.
Every grant funder will have different instructions and requirements for what they want in a proposal, and it’s critical that you follow them carefully. Missing a submission deadline or not meeting the funder’s eligibility requirements will more than likely result in disqualification.
Some of the most common elements you can expect to see in a grant proposal include:
- An organizational overview
- A statement of need
- A project narrative (description of the project you intend to fund)
- Your goals and objectives of what you want to accomplish
- A grant budget (how you will spend the funding)
- An evaluation plan (how you will measure the impact of your proposed project)
For more insight into proposal development, check out this guide: 15 Key Components of a Winning Grant Proposal.
3. Receiving and Managing Funds
Good news, you’ve won the grant!
Once a grant is awarded, you will receive an official notice from the grantmaker. This communication will outline the grant’s terms, conditions, and expectations of how the funds should be spent over the life of the grant.
The funder will probably require someone from your team to sign and return the grant agreement to demonstrate you understand the guidelines and expectations of the funding. We recommend making a copy of this agreement so you can refer back to it, if necessary. You should also review the project scope, objectives, reporting requirements, and financial obligations before diving into implementing the grant funding.
You may already have technology in place to organize the money you receive from donors, but you will also need specific financial tracking methods to manage your grant awards to ensure that you’re abiding by each requirement of the grant agreement. Failure to maintain grant compliance could jeopardize the grant itself and hurt your chances of receiving funding in the future.
3 Key Responsibilities for Effective Grant Managers
After winning a grant, grant managers have three key responsibilities for effective grant management:
Tracking Expenditures
Grant expense tracking is the process of keeping detailed records of how you are spending the grant money you receive over the life of the grant. The key here is to ensure your team is handling the funding properly.
Carefully tracking grant expenditures is important because it helps prevent nonprofits from overspending on things that aren’t related to advancing the projects and initiatives outlined in their original grant proposals.
If you only have one small grant that you’re managing, a manual spreadsheet like Excel may work fine to stay organized. However, once you start juggling multiple grants from multiple funders—each with their own unique requirements—we recommend using financial tracking software tools to keep things organized.
When looking at different grant tracking software options, be sure that the financial management system helps you at a minimum with the following:
- Track expenses
- Ensure budget adherence
- Facilitate accurate financial reporting once the project commences
Adhering To Reporting Requirements
Funders usually require formal grant reports so that they can see the impact of their funding and ensure that the money is being used correctly and responsibly.
Every funder will have different grant reporting requirements, so it is imperative that you understand your specific funder’s reporting expectations. These requirements may be laid out in the grant’s objectives, detailed on their website, or provided directly to you when you receive the funding.
Government grants, like those from the National Institutes of Health, have stricter requirements and reporting obligations than other types of funding opportunities. For example, if you receive state, local, or federal government funding, your organization must comply with § 2 CFR 200 and its components. To learn more about government funding opportunities and their requirements, check out this webinar led by Patrice Davis: Government Grants 101: 5 Steps for Getting Government Grant Ready w/ Patrice Davis.
Whether the funder’s reporting requirements are strict or flexible, the most important thing is to make sure that these expectations are clarified before you begin the grant reporting process.
In these reports, most funders will want to see:
- How funds were allocated
- Which proposed objectives were met
- What impact was made
- Any challenges encountered and how they were addressed
Adhering to reporting requirements may sound like a difficult, if not impossible task—but breaking these requirements down into manageable tasks and deadlines can help facilitate the process. We recommend assigning specific responsibilities to team members who have the expertise (such as accounting and administration).
As Rachel Werner, Owner & CEO of RBW Strategy, explains:
“If your organization does not report on outcomes or provide enough information on progress to your funders, you may not receive additional funding in the future.”
Grant reporting is not just an administrative requirement; it is a way to cultivate relationships with funders and help influence future funding decisions.
Maintaining Relationships With Funders
When you maintain a strong relationship with a funder, they may prioritize your organization when new or expanded funding opportunities arise. This could be grants with their own organization, or they may put your name forward when they hear about funding opportunities available from other funders.
Some ways to maintain relationships with funders include:
- Maintaining personalized communication throughout the life of the grant.
- Communicating specific successes but also acknowledging any problems, issues, or failures.
- Inviting the funder to other local events your organization is holding, even if they are outside the scope of the funder’s program.
- Adapting to any changing funder expectations.
Maintaining positive relationships with your funders will also enhance the credibility of your organization and open doors to collaborative partnerships and access to networks.
Tools To Simplify Grant Management
Using grant management software like Instrumentl, which is tailored to nonprofits’ needs, can significantly simplify the grant management process.
Instrumentl was designed as an end-to-end grant management solution, meaning it has tools to help streamline the entire grant lifecycle from start to finish.
Here’s a brief overview of how easy it is to manage grants within Instrumentl:
Finding Grants
Like we mentioned before, Instrumentl provides a comprehensive database of over 15,000 active grants that you can search through. Simply enter in your nonprofit’s funding needs, location, and area of focus, and Instrumentl’s Smart Matching system will deliver a list of relevant grants that align with your search parameters.
Tracking Grants
Once you save a grant in Instrumentl, it will automatically be added to your dedicated Grant Tracker. Within your Tracker, you’ll be able to:
- See upcoming deadlines
- Assign a status to each of your grants (e.g. “Researching” vs “Awarded”)
- Assign next tasks to your team
- Add notes to each funding opportunity
- Save documents within each grant
If you already have a list of grants you would like to track within Instrumentl, simply enter your existing grant data into this template, and then click “Upload Your Spreadsheet.”
Managing Funds
Instrumentl also has tools to help you manage your grants once they’ve been awarded.
For example, within the “Awards” tab, you can manage your awarded funds and monitor how much you’ve spent.
Within each awarded grant, you’ll be able to see:
- What the grant period is
- How much the grant is for
- How much you have spent
- When the next report is due
- Who is responsible for creating the report
Cultivating Funder Relationships
As noted above, Instrumentl can streamline your search and management of grants. And, if you already use the Virtuous CRM, you can now manage your relationships with funders through the integration of Virtuous CRM with Instrumentl.
When you save a funding opportunity within Instrumentl, it will be synced effortlessly back to Virtuous CRM.
This integration will save you time by allowing you to discover, research, and track grants first through Instrumentl, and then sync them back to Virtuous CRM. Among other benefits, this powerful integration will provide you:
- Effortless, one-way sync of funder details and grant opportunities between the two platforms.
- Reduce the need for data re-entry, keeping everyone on your team updated on grant timelines and funder interactions.
- Automatically update your CRM with vital information from Instrumentl, including funding opportunity names, deadlines, amounts requested, and amounts awarded.
Wrapping Up
We hope this beginner’s guide has helped demystify the grant management process so that you can feel more confident pursuing grants for your organization.
With the right tools, identifying grants, tracking expenditures, reporting on outcomes, and cultivating funder relationships doesn’t have to be overwhelming or complicated. Sign up for a free trial of Instrumentl today and see all that it has to offer your team.
