Grant applications are expected to have rock-solid budget proposals and clear ties between dollars granted and outcomes. But too often, talented staff members spend precious hours consolidating spreadsheets to satisfy these budgetary, tracking and reporting demands when they could be investing those resources elsewhere for higher return.
In this article, the third in this series on grants management, we’ll cover how technology can improve the budgeting and reporting process, including grant restrictions, compliance requirements, and specific measurable outcomes, which are standard for highly competitive grant funding.
Budget management a breeze
Budget tracking is crucial to ensuring your organization fully uses grant funding while also observing grant restrictions. If you don’t fully expend the funds, you face losing future funding. If you overspend, you must find additional funding.
The right grant management solution should free you from manual budget monitoring and help ensure that grantors view your organization positively. Useful grant management budgeting features include –
When you choose a grant management solution that integrates with your accounting system, budget information related to individual grants can be incorporated into your organizational budgets and financial reports. The reconciliation and transparency allows grant writers to see budgets without being in the finance system. It also shows financial managers how the program is performing.
By estimating future periods and forecasting your financial position, including “what-if” scenarios, your nonprofit can make better decisions and build a more compelling case for future financial support. With business intelligence (BI) and dashboards that allow you to see your program budget, goals and progress easily, you can quickly implement changes to ensure you reach both program and compliance targets.
Most grant-funded organizations have more than one source of funding and many run multiple programs. When costs or incomes are associated with multiple funds or programs, you must spread them across those programs in a fair, consistent way.
To do this, you must perform allocation calculations and record allocations accurately. Software designed for grant-funded organizations allows you to pre-set allocation limits imposed by your grantor, so you can avoid exceeding contractual indirect cost limits. Allocation management also allows you to accurately and consistently distribute grant costs. When it’s time for an audit review, you’ll be able to provide audit-ready reports to support allocated costs.
While larger organizations tend to leave the understanding of grant restrictions and spending to their finance officers, it’s just as important to the program managers and grant writers. And in smaller organizations, where staff wear multiple hats, the proper systems and technology can save time and keep your credibility intact.
Demonstrating need and merit
Accuracy and accountability can give your organization an edge when competition for grants is particularly steep. Accurate forecasting and measurement allows staff to back up proposals with data showing funders exactly what can be accomplished with the funds.
By using technology to precisely track past budgets and results, you can know exactly how much you’ll need in the future. You may also be better equipped than other organizations to show effectiveness on a detailed level. A proper use of technology also shows funders you’re equipped with the tools for making community impact.
Defining and measuring outcomes, impact
Outcome measures are powerful, essential tools for demonstrating accountability and transparency. Outcome measurement is a process to define appropriate outcome indicators, establish data collection methods, analyze data and report on the over- or under-achievement of a nonprofit’s programs.
Outcome measures extend beyond an organization’s program or services departmentsto its major operations. For example, executive staff may use success measures to adjust the operations of a particular service or set future strategic direction. Development staff can use them to identify other funding sources or report achievements to current grantors.
The right grant management system can make it easier to show how budgets are used, program goals are met, and your community is being changed. By collecting data and reporting on success metrics, your organization can easily demonstrate its positive impact to grantors, individual donors, and the public.
Providing auditors, stakeholders and key decision-makers a clear look at how an organization gets and spends its money is advantageous to your nonprofit’s future. Factoring outcome measurements into your organization’s financial, funding and program data can help you present a powerful snapshot of your accountability, program performance, and overall effectiveness.
In next month’s article, I’ll summarize the top considerations when comparing grant management systems.
Joan Benson is a product marketing manager for Sage North America’s Austin, Texas-based Nonprofit Solutions business unit. She can be reached at email@example.com or through her Twitter handle, @Joani_B_. Benson has worked in the not-for-profit space for eight years and in product marketing/management for 15 years. She began her career in the accounting and manufacturing sector, where she developed expertise in cost accounting, operations, and product development.