Most nonprofit leaders know how important grant funding is for progressing their programs, initiatives, and missions — and helping as many beneficiaries as possible. While individual donors and fundraisers are crucial to a nonprofit’s mission, too, grant funding is one of the top ways that nonprofits are able to create lasting change in their communities. In fact, in 2021, grant funding reached $90.9 billion, up from $88.55 billion the year prior — and that number only looks like it will increase.
But while lots of nonprofits know these statistics and realize how much opportunity lies in grant funding, they also know how difficult grant management can be: aside from filling out applications — which on average take anywhere from 20 to 100 hours — managing their status, tracking their impact, and getting a 360-view can be burdensome, and even downright impossible. In fact, in the past few years, managing grants has become so burdensome that it’s severely impacted nonprofits’ abilities to retain and recruit staff.
But here’s the good news: with the right tools, grant management can become a simple, easy, and effective part of your fundraising strategy.
In this blog, we’ll cover everything you need to know about grant management, including what it is, what causes nonprofits to struggle with it, and how your organization can simplify and improve its processes with technology.
What is Grant Management, and Why is it Important to Nonprofits?
Grant management refers to a nonprofit’s process of overseeing the entire lifecycle of a grant.
From identifying funding opportunities and applying for grants, to managing awarded funds and ensuring compliance with grant terms, grant management ensures that nonprofits secure and use grant funds efficiently and transparently to achieve their missions.
What Are The Stages of Grant Management?
Typically, grant management can be broadly divided into three phases: Pre-Award, Award, and Post-Award. Each phase encompasses specific activities and responsibilities that ensure the effective and efficient use of grant funds.
1. Pre-Award Phase
- Identifying funding opportunities: At this stage, nonprofits research and identify grant opportunities that align with their mission and projects.
- Proposal development and submission: Once a grant opportunity has been identified, nonprofits then start writing a proposal. This stage usually includes grant writing, preparing a budget, and gathering any necessary documents like financial statements or proof of nonprofit status. Once the proposal is written, it’s submitted to the funder organization.
2. Award Phase
- Notification and acceptance: If a proposal is accepted, the nonprofit typically receives an official notification from the funder regarding the grant award. Then, the nonprofit reviews and signs the grant agreement, which outlines the terms and conditions of the grant.
- Planning and implementation: Once the paperwork is signed and the nonprofit receives the fund, funders and grantees usually meet to discuss project details and plans and finalize any expectations or requirements.
3. Post-Award Phase
- Project launch: Once both the grantee and the funder decide on timelines, deadlines, and other important details, it’s time for the nonprofit to carry out the project activities as outlined in the proposal and plan.
- Reporting: At this stage, it’s essential for the nonprofit to continuously monitor and report on their progress and use of funds. Typically, at the end of the grant period, the nonprofit is required to submit a grant report as well, which details the project’s achievements, challenges, and financial status.
The Top 3 Common Challenges of Traditional Grant Management
While grant management can be divided into three phases, each phase contains many intermediate steps and details. Understandably, busy nonprofits — who are juggling applying for multiple grants, running online fundraisers, stewarding donors, and more — often find the traditional process overwhelming, for a few reasons:
- It’s inefficient: Traditional grant management relies on scattered spreadsheets and manual documentation. This leaves crucial information prone to human error, version control issues, compliance risks, and scalability issues, which can cost a nonprofit hundreds, if not thousands, of dollars.
- It’s burdensome: These manual processes not only make grant management inefficient but also administratively difficult, requiring lots of time, energy, and attention from nonprofit staff — a section of the workforce experiencing incredibly high rates of turnover due to a lack of bandwidth and susceptibility to burnout.
- It’s siloed: In traditional grantmaking, the majority of grant seekers rely on only one or two people to handle and oversee the grant cycle. This siloed work process restricts visibility and transparency for other staff members and essential collaborators on the project (grant writers, financial officers, etc.). This lack of transparency also leads to loss of institutional knowledge about the grant cycle in the face of turnover — a phenomenon which costs the average US business $47 million a year in productivity.
Together, each of these challenges burdens staff, hinders organizational collaboration and communication, and even threatens an organization’s ability to receive the funding they need.
5 Ways Technology for Nonprofits Can Improve Grant Management
For nonprofits that have long been in the grant funding space — and rely on traditional methods for grant management — the above challenges are probably familiar.
But, with the right all-in-one nonprofit software — which offers centralized data management, automations, enhanced reporting capabilities, and more — nonprofits can:
- Improve transparency: Centralized grant management software improves transparency throughout the entire grant cycle, for both internal staff and funders — from the application process to disbursement. With precise tracking and reporting, nonprofits can keep abreast of every update in the post-award phase and easily notify funders of how their contributions are being utilized with detailed reports.
- Save time and money: Grant management software can help nonprofits keep track of submitted applications, deadlines, expenses, and requirements, ensuring nothing falls through the cracks — all of which can help alleviate administrative burden.
- Facilitate better communication: An all-in-one nonprofit software — which includes grant management — aligns cross-department teams, leading to better collaboration and communication and safeguarding against the loss of institutional knowledge in the case of turnover.
- Scale: With technology, nonprofits can manage more grants with the same resources. As organizations grow, technology ensures that their grant management processes can scale with them without compromising on efficiency or accuracy.
- Focus on what matters: With robust grant management, nonprofits can redirect their energies from administrative tasks to their core missions. This means more time spent on creating impact and less on navigating spreadsheets and documents.
Save 40 Hours of Grant Management Work a Month with Giveffect
Effective grant management is about more than just saving time and energy — with the right technology and tools, any nonprofit can improve their internal communication and collaboration, their relationships with donors, and do more for their mission.
With Giveffect, a nonprofit’s grant management system is in the same platform as their CRM, which makes it easy to track grants at every stage, from research to reporting. From tracking applications, decision deadlines, and reporting requirements, to generating application progress reports, Giveffect gives you a single place to keep all of your grant-related information up-to-date and accessible.