Grants are an excellent way for grant-making organisations to fund projects and causes they care about and support the development of communities. Despite organisations distributing grants with the best intentions, they can significantly drain resources when not managed properly.
Managing grants efficiently is critical to ensuring that the money is used appropriately and results in positive community impact. To get the most out of grant funds, they need to be managed closely.
This is important because grants are basically contracts. And if this contract stipulates the grant agreement – or the intended use of funds, implementation procedures, reporting requirements, and timelines – then grant management ensures that all parties follow – through on these conditions.
Grantmakers no longer need to rely on using multiple, discrete spreadsheets, calendars, drop boxes, and manual tracking systems to manage their grant funds; instead, grant-making organisations are now shifting to and selecting grant management systems that meet their needs and facilitate the seamless management and delivery of their grant programs.
Before we dig into why and how grants should be managed, let’s first understand what grant management means.
What is Grant Management?
Grant management is the administrative work and process that goes into accessing and fulfilling the requirements of a grant.
The grant management process typically includes two main groups:
- the grantor - usually the government department or independent organisations distributing the grant
- the grantee - the receiver of the grant funding.
For both grant seekers and grant makers, there are a lot of organisations involved in this process that can be improved by helpful management methods and tools.
For grant-making organisations, grant management defines the processes which determine who will receive grant funds, and how they will be distributed and spent to meet community needs best.
Grant management is a lengthy process that requires grant makers (grantors) to undertake numerous tasks such as creating grant applications, announcing the grant, distributing the grant money, and collecting reports. The grantees' duties include applying for the franchise, managing the grant received and supplying adequate reports—other assisting documentation required by the grantor, among other tasks.
Why is Grant Management Important?
The grant lifecycle has three stages:
- pre-award
- award
- post-award
As suggested above, each of these stages consists of multiple steps.
Grant managers have the most important role when it comes to successfully realising the grant process. As the leader of the charge, they manage grant logistics and coordination including effective communication, reporting and administration.
The function of a grant manager is to collect relevant information on the progress and results of the grant to report back to key stakeholders. Efficient grant management includes:
- Defining a fluid process. This means creating workflows that support the grant seeking and grant-making process by monitoring communication and addressing blockers.
- Managing and distributing reports. A huge portion of the grant process relies on financial reporting so it’s necessary to establish a cadence of reporting and confirm that information received by those who need it.
- Ensuring compliance with. When it comes down to it, grant managers are responsible for meeting grant obligations. If a team member isn’t providing key information on the progress of the project, then they can step in to keep the process moving forward.
With so many steps involved in the grant management process, it is easy to see how poor monitoring can begin to creep in without clear processes. There are several risks that come with losing track of the grant management cycle.
Poor grant oversight can lead to:
- Miss obligatory targets. All grant programs are contingent on the grant recipient and the grant maker meeting certain grant terms, without proper management systems, it’s very likely that these crucial targets will not be met.
- Lose track of the timeline. Without a clear process or system in place for keeping track of the entire grant lifecycle, it’s likely that team members will get caught up in internal processes and miss crucial deadlines.
- Misuse of grant funds. When footing is lost within the grant process, oversight and inconsistencies are much more likely. These little mistakes lead to stepping outside of the original grant proposal, which could mean a misuse of grant money. Failure to appropriately track and document transactions such as personnel costs, contracts, indirect cost rates, matching funds, program income, or other sources of revenue can be considered a type of grant fraud.
- Forfeit future funding. If any of the aforementioned results come up in the grant review process, it’s very likely that you’ll lose access to current funds. Meaning you’re unlikely to get more funding in the future.
As such, diligent management throughout the grants process can save grantors from faulty accounting or losing records and can support the smooth execution of their objectives and long-term goals.
Common grant management mistakes grant makers must watch out for, include:
- Absence of a clearly defined grant management plan with workflows from the outset
- Designing complex and confusing grant applications
- Relying on manual or outdated grant management methods and processes – such as spreadsheets, or manual data input.
- Minimal grant lifecycle tracking. Including a failure to keep adequate records / documentation
- Failure to conduct grant reporting in a timely manner.
- As you can now see it is extremely important for grant makers to ensure their grant management practices are impermeable to avoid mistakes occurring which could lead to failed grant programs and misspent funds.
How to effectively manage grants?
Managing grants can be challenging without using proper techniques and tools. There are plenty of financial management, customer relationship management, and project management software solutions available on the market, but why pick those when you can select and employ a system specifically built for grant management purposes?
A grant management system (GMS) is software that assists organisations in managing grants. The purpose of a GMS is to automate and standardise the grant-making process. A GMS will help reduce the administrative burden on staff, improve data accuracy, and ensure compliance with funding guidelines.
There are many different types of grant management systems (GMS). GMS features can vary, but some of the top features to look out for include:
- Application design: simplifies the process of designing and creating grant applications
- Proposal submission: facilitates the seamless collection of grant applications submitted by grantees
- Review and approval workflow lets reviewers’ comment, request additional information from grantees, and approve applications electronically
- Financial management: record spending against budget and quickly generates financial reports
- Cloud-based: in addition to providing 24*7 accessibility, cloud-based GMS serves as a one-stop-shop for all the vital grant information, files, and correspondence
- Streamlines communication: allows seamless collaboration with the grantees and within the grant program team.
A purpose-built grant management system can prove to be a powerful solution, and it may be the only thing holding you back from efficiently managing your grant programs.
Benefits of effective grantmaking:
Besides avoiding the risks associated with mismanagement of the grants process. There are also hidden benefits associated with streamlined grant management processes. These include:
- Increased Transparency for improved decision-making. Grantmakers make countless operational and tactical decisions daily. Therefore, having an effective grant management process that provides transparency across all levels of the organisation is crucial in ensuring that mistakes from the past can be recognised and guiding and informing future grant-making actions to ensure positive impact can be achieved.
- Improved performance management. Grantmakers need a solid understanding of grantee performance, not only to provide feedback to external stakeholders but to ensure that program goals are achieved. Through a well-managed grant program, grantees can self-report information relevant to determine delivery performance which can then be used by grantors to report dynamically to their relevant stakeholders.
- Impact is the vision of change that grant makers are working towards through their investments. It is often the ultimate end state that is desired through the grant funding. A well-managed grant program assists not only with improving coordination and communication within the grant team, but also helps you track and reflect upon the work. Effective grant management allows grantors to quantify the impact of the money spent and keeps track of your gains and losses. It can also go one step further and prove the societal impact within a grant program.
Despite being aware of the numerous benefits of efficient grant management, a lot of grant makers struggle to manage their grant programs and fall victim to easily avoidable mistakes.
Understanding the significance of effective grants management should assist in helping you avoid the negative impacts of a poorly managed grants program and help you make better decisions moving forward.
Manage Your Grants effectively with OmniStar:
At OmniStar, we understand the importance of saving time in every step of the grant management process. OmniStar ensures efficiency at every stage of the grant lifecycle by simplifying complex processes, automating repetitive tasks, freeing you to concentrate on maximising the impact of your grant program.
Get in touch with an OmniStar expert today to discover how to transform your current processes and increase your grant-making impact. Or book a demo today!
