Last Updated:

April 11, 2023

Grant Management Process: What is It & Best Practices [in 2023]

Grant Management Process: What is It & Best Practices [in 2023]

The grant process, for both funders and grant seekers, is a lengthy and sometimes formidable series of time-sensitive steps. But it doesn’t have to be overwhelming! 

With a solid understanding of the grant management process, you can acquire skills that will help make your work easier. This article will define the process, explore commonly made mistakes, and offer helpful suggestions for you to create your own grant management system.

What is Grant Management?

What is Grant Management

Before discussing the process, let’s first clarify what we mean by “grant management”. Grant management is the system that an organization uses to oversee a grant and its corresponding responsibilities throughout its lifecycle. Grant management is a two-fold concept that is understood by both grant makers and grant seekers. A grant management system will encompass such tasks as applying to and selecting grants, accepting or disbursing funds, adhering to requirements, evaluating outcomes, and all the steps in between.

As mentioned above, it’s important that both grant makers and grant seekers implement a grant management process to ensure they stay on track with their respective tasks. Keep reading below as we break down the different grant management guidelines for each group.

Grant Management for Grant Makers

Grant Management for Grant Makers

Grant makers are the funders. They are the foundations, businesses, municipal departments, or organizations that hold the dollars, solicit applicants, select candidates, and write the checks. They also must review grant reports to ensure grantees are adhering to the requirements of the grant agreement. The grant management process for grant makers is best described in three steps: Application, Award, Account. The table below provides grant management guidelines for each stage.

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Grant Management for Grant Seekers

Grant Management for Grant Seekers

Grant seekers are the nonprofit organizations on the receiving end of grant award funding. They are the groups searching for opportunities, completing applications, and carrying out their missions with the awarded grant monies.

Ideally, a nonprofit would operate with diversified revenue, receiving grant money from more than one funding source. Grant management skills are essential for keeping up with all the required responsibilities of each grant to ensure success. Grant seekers utilize the same three-step approach – Application, Award, Account - as grant makers. These guidelines for nonprofits are outlined in the table below.

Why is Having a Grant Management Process Important?

Why is Having a Grant Management Process Important

Whether you’re a funder or a grant seeker, there are many moving parts when it comes to grants. An effective grant management process will outline current grant cycles and their associated requirements.

As mentioned above, nonprofits are often operating with multiple grant awards and must juggle their accompanying responsibilities. A system is necessary to ensure that an application deadline doesn’t get missed or a reporting requirement overlooked. Having a process allows a nonprofit to keep pace with both current grant tasks and future opportunities.

A grant maker, too, must balance the oversight of multiple grantees who rely on them for funding and a board or advisory group who wants to see the foundation’s resources distributed effectively. Utilizing a grant management system ensures that grant opportunities are created with clear guidelines and marketed effectively to recruit eligible applicants and that determinations are made based on established criteria.

How Do Nonprofits Typically Manage Grants?

How Do Nonprofits Typically Manage Grants

The short answer to this question is they usually struggle. But that’s what we’re here to help with! Many nonprofits need to familiarize themselves with the best practices of grant management and learn the necessary grant management skills to establish ongoing efficiency.

Large nonprofits generally have the capacity to employ a staff person (or several) who is/are dedicated to the grant management process. Perhaps they even have a dedicated Development Department whose job is to search for opportunities, complete applications, provide oversight, and report on existing grant awards. These nonprofits may even employ a specific Grant Manager to stay on top of the current awards and their reporting requirements.

Small nonprofits without personnel specifically assigned to fundraising or grants usually rely on existing staff to manage their grants. The responsibilities of completing grant applications, managing funds, and writing grant reports often fall on the shoulders of an Executive Director or Program Manager. These employees may elicit the help of a bookkeeper, staff accountant, or the Board Treasurer to make sure that funds are being tracked adequately and in compliance.

If an organization has just one or two grants that they are managing, staff will typically use an Excel spreadsheet or a basic chart to keep track of expenditures and record deadlines. However, when an organization expands to include several grants or large dollar awards in their annual budget, then they may need to upgrade to a more sophisticated grant management software. Similarly, many grantmaking foundations use this same software in their own capacity to manage and track applications, awarded funds, and post-award grant reports.

There are many ways grant management software can aid both grant seekers and grant makers, allowing for an organized and efficient process. Instrumentl provides grant management software for organizations of all sizes with various plans to fit your nonprofit’s needs. All the plans include features like smart grant matching, dedicated grant trackers for each project you’re working on, and deadline reminders.

How to Use Grant Management Software to Stay on Top of Deadlines

How to Use Grant Management Software to Stay on Top of Deadlines

Whether you are an Executive Director juggling multiple tasks or a Development Director with a full plate of fundraising responsibilities, providing your organization with the best tools helps make your grant management process flow strategically and logically.

When you create an account on Instrumentl, you’ll first be prompted to set up a project. Projects allow you to save an active grant search while also keeping everything related to that project in one place.

Instrumentl Project Set Up

For example, maybe you’re working on an Air Quality project. Once you’ve set up a project, Instrumentl actively finds grant opportunities your nonprofit can pursue.

In this example here, 110 matches were found for this organization!

Instrumentl Matches

These matches are opportunities you’d then be able to research further all within Instrumentl. We make 990s easy to read by parsing the data to show you what’s most important. 990 Snapshots give you high-level insights like financials, key people, and the location of the funder. This way, you can spot good fit funders faster.

990 Snapshot

Premium Funder Insights dig deeper into things like giving averages and medians, openness to new grantees, and areas in which the funder has given the most.

Key Financial Stats

Once you find a promising opportunity in Instrumentl, you can manage everything around that grant from your Tracker. Here, you can add different tasks like milestone, submission and reporting deadlines, and upload final proposal documents to keep everything in one place.

Once a week, we’ll email you a reminder about all your upcoming tasks and deadlines for opportunities you’ve saved to your Tracker.

Instrumentl Tracker Overview

Lastly, if you’re asked to generate a report for your Executive Director or Board of Directors, you can do so in seconds. With Instrumentl, custom PDF or CSV reports can be created quickly.

If any of this all-in-one workflow interests you, you can create a 14-day free account on Instrumentl here to try it out for yourself.

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Common Grant Management Mistakes Nonprofits Make

Common Grant Management Mistakes Nonprofits Make

Whether nonprofits are taking advantage of today’s modern grant management software systems or keeping track of their grant process in a spreadsheet, they often face hurdles when it comes to successfully managing grants. There are several common mistakes that organizations make in the three stages – Application, Award, Account. Check out some common mistakes below and use the helpful suggestions to avoid these pitfalls.

1. Missing outcome data (Application)

Many nonprofits have stellar mission statements and explanations of their projects. They have dedicated Boards of Directors and sound financials. They may be well-known and respected in their communities. Everyone recognizes that what they do is valuable.

But…they often don’t have any outcome data. Many grant reviewers rely on having evidence to justify the amount of the request or to provide credibility to the organization and its mission. Organizations need outcome data to prove empirically that they are carrying out their intended purpose.

With data, funders are better assured that their dollars are going to make an impact. Does your organization conduct program outcome surveys? Does it produce an annual report? This information is critical in a grant application.

2. Placing all awarded money in the general organizational fund (Award)

Nonprofits often make the mistake of not using dedicated accounts for restricted funds and erroneously deposit funds into a general account, assuming that accounting ledgers will reveal the expenditures later. When it comes time for a grant report, it is then difficult to accurately document how funds were utilized. An investigation necessitates combing through other expenses to get to the ones you need to identify.

To solve this problem, when an amount of money is disbursed for a project or multi-year grant, place the award in a restricted fund outside of the general operating fund. When it’s time to file a grant report, it will be easy to identify and account for how the dollars were spent.

3. Not considering staff compensation in the grant request or grant report (Application, Account)

Nonprofits are human-led organizations relying on staff and volunteers to carry out their efforts. Nonprofits with paid staff need to factor in staff compensation when making a grant request or completing a grant report as part of the overall request or award.

For example, a project might take $12,000 in materials and fees. However, it may also take 20 hours per week of effort from a Program Manager and 10 hours per week from a Data Specialist. When factoring in staff time and compensation, you can easily exceed your original request. On the flip side, when reporting on a grant and how funds were used, be sure to consider how much money was used to compensate the staff carrying out the awarded project.

4. Missing a grant renewal deadline or midterm report (Application, Account)

Most nonprofits are busy organizations and are juggling multiple responsibilities on a day-to-day basis. But while you’re out doing the important work of your mission, don’t forget about the administrative tasks that keep the nonprofit afloat, especially those that pertain to funding and grants.

When funds are awarded, make sure to understand the grant requirements and take note in a calendar (or use your management software) to alert you to upcoming renewal or reporting deadlines. Nothing is worse than missing the chance to continue your grant-funded project because you forgot about a form or were late on a reporting deadline.

To avoid making this mistake, you can set up reporting tasks in Instrumentl for a grant you’ve saved to your Tracker:

Reporting Task Creation

5. Not allocating enough time to complete an application or report (Application, Account)

When preparing an application or report, many organizations take note of the deadline but do not make a corresponding timeline of tasks needed to complete the necessary forms. Grant applications and reports often warrant multiple pieces of information including organizational background, financials, impact data, and staff or Board of Director rosters.

Unfortunately, organizations often wait until the last minute, only to realize they do not have the necessary information to complete the request in a timely, meaningful, and well-organized fashion. Always under-promise and overdeliver. Make a timeline or use your grant management software to assign tasks and due dates.

Now that we’ve covered a few of the potential mistakes to avoid, we’ll provide a few tips for grant management best practices in the next section.

Grant Management Process Tips and Best Practices

Grant Management Process Tips and Best Practices

Even if you’re a small nonprofit with limited bandwidth or a new staff person tasked with grant management, there are a few guidelines to follow to make the process less stressful and more efficient. Listed below are three tips to help in implementing a successful grant management system.

Make a grant opportunity calendar

In the same way you prepare an annual budget, look at the upcoming calendar year and outline the grant process for your organization. In a chart or spreadsheet or using a software system, identify grant opportunities that are good matches and choose the ones you will be pursuing. Then include any pertinent notes and the application deadlines. Also, make sure to add the anticipated award date and any post-award reporting requirements and their dates as well.

Evaluate your annual budget and its percentage of grant funding

Most successful nonprofits have a diversified revenue stream that includes a combination of private donations, corporate sponsorships, member fees, municipal contracts, and yes, grants. Work with your Board of Directors’ treasurer and/ or accountant to identify where grant funding is lacking and barriers to seeking more grant opportunities. Make a realistic goal as to what percentage of funding should ideally be coming from grants. This will vary organization to organization according to its mission, population served, and the nonprofit’s primary funding model.

Be proactive in the grant management process

Some organizations get a great idea for a project, get it started with existing funds, and then search for money to sustain the project. Others wait for a grant opportunity to present itself and then craft a program around the opportunity. Both approaches are reactive instead of proactive.

Instead, create a grant process that aligns with your mission and utilizes your organization’s strategic plan. You should be seeking out funding opportunities based on your goals and timeline. This will help keep the organization on track in all phases of the grant lifecycle.

Wrapping Things Up: Grant Management Process

Grant Management Process

The grant management process doesn’t have to be intimidating when you use a grant management system to support your organization’s efforts in all phases of the grant lifecycle. Utilizing technology afforded by modern grant management software makes the process even easier!

Hopefully this article has provided you with information needed to support a successful grant management system, ensuring a positive relationship with the grant funding process.

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