There are some nonprofits who won’t apply for additional grant funding because they can barely manage the ones they have. One more grant would be the proverbial “straw that breaks the camel’s back”. Nonprofits that lose funding do so because the accounting department spends too much time trying to manage the grant restrictions and reporting requirements. Processes are handled manually outside the system and not in a timely fashion.
There are plenty of books and articles about applying for grant funding, but very few about what to do once you have the grant in order to keep it and possibly expand the dollars received from that funding source in the future.
In order for nonprofit accounting departments to elevate their role in the process, here are three keys to building grant funding that lasts:
It starts with a change in approach. Rather than wait for the contract to land on your desk, take the initiative to lead your grant writers and development staff from the beginning.
Internal managers and staff don’t always speak in numbers. So they don’t always understand how their actions affect the organization’s ability to adhere to the grant contract. If the accounting department can educate the rest of the organization before the first dollar is spent, then the seeds have been sown to renew that funding and increase it in the future.
But to really lead the charge, accounting needs to partner directly with grant writers. The budget cannot be a surprise, and grant writers need to work together with finance when creating budgets. That way the grant structure fits within the organization’s financial practices from the very beginning.
Even if everyone is on the same page internally, keeping your funding isn’t guaranteed. You have to set yourself apart by demonstrating the value you add to the funds you’ve received.
Fundamentally, this means knowing where every dollar goes and understanding the ROI to the funder for each dollar you spend. This isn’t really the value of the dollar to you, it’s the value you add to every dollar you’re given.
The best way to show the value you bring is to combine data from your case management or other program management system with your financial data. That way you can provide a “units delivered per dollar given” ratio. Having this data will set you apart when applying for new grants, and it will give your funders a better reason to continue to give you money in the future.
Even the best data on the impact you have won’t do any good if you don’t tell anyone about it. Not only should you over-communicate with funders, but you should also stress communication internally and even with the general public.
This is the be-all and end-all of raising more money. You must prove you are doing what you said you could do when you applied for the grant. Put simply, stewardship is doing your job well. Accountability is being able to prove it.
In order to demonstrate your commitment to accountability, you need to understand the rules each funder has put in place. Between spending restrictions, reporting requirements, and indirect cost recovery, each funder is different. You need a way to easily understand those differences and comply with them without increasing your administrative burden.
The easiest way to lose funding is to be out of compliance with grant requirements. And this is either a timing issue or a capability issue. It can be hard to mold your existing structure into the funder’s reporting requirements, but it’s an absolute must in order to demonstrate your commitment to the funder. But it can’t take all of your available hours or require you to add headcount just to do it or you’ve unnecessarily burdened your funders and your organization.
Accounting alone cannot hold the full responsibility for compliance. The entire organization must be accountable to the funder. This is where leading the process comes full circle. You can’t hold others accountable if you don’t set the expectations on the front end. And it takes an organizational commitment to truly be accountable to your funders for delivering your results.
First, you need to be at the table even before the grant has been awarded. You need to help your grant writers understand the impact of the budgets they are creating – both on the organization and on the likelihood you’ll be awarded the grant!
In order to truly differentiate yourself from the sea of applicants, you need to be better at describing the value your organization adds on top of the dollars. Define exactly why a funder should give you their money by combining data from various systems. This will also focus your internal efforts around a specific KPI that will allow you to get more grants.
And of course, if you can’t prove you did what you said you were going to do, specific to the way the funder needs to see it, you can’t expect the funder to renew. Just like the neighbor who returns your tools in better shape than when you lent them, you need to prove you treated the funder’s money like your own.
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