Grants are among the most essential funding sources that a nonprofit organization receives. However, managing funds successfully is not a straightforward process. It is often complicated due to numerous parameters such as requirements, deadlines, inter-functional cooperation, and changing requirements related to various programs.
Grant Management System workflows allow nonprofits to transition from being reactive and manual to strategic and data-driven. Within this blog post, we will discuss why and how nonprofits require a grant management system, and how solutions like Fluxx grant nonprofits the control and visibility needed to succeed.
Relationship Between Nonprofit and Grants
Grant funds may be what keeps many non-profit organizations afloat. Unlike donations and fundraising activities, grant funds have certain conditions and objectives attached to them. Grants enable non-profits to do more than just sustain their activities but grow and meet their strategic objectives in the long run.
Incorporating federal award funding, foundation grant funding, and corporate social responsibility grants, the diversification of funding sources a nonprofit may receive makes it crucial to track everything, from dollars to activities and outcomes, accurately.
However, handling multiple sources of grants could be quite challenging. Every fund has its unique application, reporting, budgeting, and compliance process. As the number of grants increases, the complexity associated with handling them also keeps rising, until you implement the appropriate system.
Reasons Why Nonprofits Find Managing Grants Challenging
In most nonprofit organizations, grant management and tracking are done through the use of spreadsheet software, email chain communications, and even old legacy systems that were never intended to deal with the level of complexity involved in grant management. While these systems are a stopgap measure, they pose long-term complications.
Manual processing of information can translate to expensive mistakes, deadline misses, and inaccurate reporting. Silo operations, including finance, development, and program departments, tend to duplicate efforts or, rather, work from conflicting information. The fact that critical documents remain in disparate systems makes grant reporting a laborious and error-filled process. Such shortcomings do not only hamper operations but can further jeopardize relationships and cause organizations to forfeit precious grant awards. The absence of shared systems makes it difficult for executive management to monitor grant progress in real time.
Nonprofit Problems the Grant Management Software Solves
A grant management system is developed specifically to solve the problems nonprofits experience daily in handling grants. Here are problems with grants that the system solves, with examples of how the system solves these problems.
- Data Centralization: All grant-related documentation, emails, deadlines, budgets, and communication can be accessed through one secure platform. For example, instead of searching through shared drives, a program manager can easily access the original funding agreement, history of budget revisions, and reporting templates through one console.
- Optimize Workflows: Grant software allows automating tasks that involve routine processes such as application approvals and compliance notifications. For example, if a quarterly report is required, the software can automatically alert relevant staff members of the need to submit the report and automatically populate the required data and send it to the executives for approvals without anyone monitoring that process manually.
- Ensure Compliance: Features such as audit trails, budgeting, and notifications will help you comply with the funding agency’s requirements. For instance, the use of the Uniform Guidance may be required to document the proper distribution of federal grant funding. Your grant management system will alert you regarding spending that is not within budget and will record changes that will be audited later.
- Enhance Collaboration: Several departments are able to view and input information on grant files depending on their role. For example, development personnel are able to follow the process of the application while finance personnel are able to track how the funds are being spent. All this is done in one system without the need to exchange emails.
- Consequence Tracking: It also allows tracking spending with performance data so that you can create an accurate outcome report. Consider if you are running an organization for which there is a grant award for youth mentorship in regard to 500 hours, so that you can create an outcome report with how many hours were spent on youth mentorship based on grant outcomes.
Through resolving such operational challenges, a grant management system not only maximizes efficiency but also improves the ability to communicate the impact story and build relations with funders.
Even the best grant management system is most effective when coupled with other organizational tools and resources. For a grant management process to be efficient, nonprofits should consider having:
- Financial Systems: An accounting system that is integrated with your grant platform ensures that all grant funds are properly tracked and reconciled.
- CRM Tools: Having a robust donor and funder database allows management of the relationship that extends beyond the grant.
- Project Management Tools: There is a need to connect milestones in grant awards with operational planning in order to keep all teams on the same page.
- Outcomes Tracking and Evaluation Tools: The tools assist in measuring impact for grant funding.
When used together, these tools in turn enable your nonprofit to function in the transparent and effective manner that modern-day grantmakers demand.
Who’s Responsible for Grant Management?
Grant management is not the function of one department, rather something the entire organization is working together on. The development team is responsible for writing proposals and managing relationships with the funders, while the program team is responsible for the implementation of the work and monitoring of the deliverables. The finance team is responsible for financial management and compliance.
Since each stakeholder is involved in a different area of the grant process, it is essential that there be one central system that offers role-controlled views and one version of truth. With such challenges, there is always the possibility that something goes amiss.
Why Fluxx Should be Your Grant Management System
Fluxx is a contemporary and cloud-based grant management platform that has been designed with a focus on meeting the complex needs of nonprofits.
With Fluxx, you get an integrated platform that allows you to manage the entire process of grants from application to award and reporting in one place.
Fluxx helps you connect your teams by sharing dashboards, workflows, and grant records in a common manner that keeps finance, programs, and development in sync with each other.
The tool provides real-time tracking of compliance and budgeting, as well as the ability to create workflows that are specific to your organization. With Fluxx, you are managing grant dates and aligning grants to outcomes. Through the tool, your leadership can make decisions based on the insights available from the dashboard. Furthermore, the tool will help you simplify the grants management process, regardless of the number of grants that you are handling.
Rethinking Your Approach to Grant Management
One dollar can make a big difference when you’re a nonprofit. Grants can be a powerful lever for growth and impact reporting, but they can also be a source of stress and trouble if you’re not doing them well.
But with a contemporary grant management system such as Fluxx, you find it easier to turn grants into an even more potent resource in your organization. This is because of increased visibility and alignment of your grants.
Ready to simplify your grant operations and take your nonprofit to the next level of grant success? Request a demo of Fluxx.
