In working with nonprofit organizations, I have been a part of numerous conversations with organizational leadership who have seen grants as the solution to all their revenue shortfalls. Grants are part of the revenue mix for many nonprofit organizations, providing a source of funding for various projects. However, grant recipients need to have a clear understanding of what grants can and cannot pay for as they build this revenue into their budgets. Let us explore the possibilities and limitations of grant funding.

Too often, there is confusion between grants and donations in nonprofit organizations. When it comes to nonprofit funding, these two terms are often used interchangeably. Additional confusion can be found when major individual donors begin making donations in amounts similar to what an organization can expect to receive as a grant from a foundation. Nonprofit professionals know that both funding streams mean revenue for their organization but may only have a vague understanding of the distinct characteristics and requirements of each. Understanding the key differences between the two helps nonprofit professionals make informed decisions on funding strategies.

Before I began working as a grant consultant, I did not understand all the details and intricacies of grant budgets, including the difference between restricted and unrestricted funds. I remember working with one nonprofit that was thrilled to receive a significant grant for program staff salaries, only to realize later that they could not move those funds elsewhere when a staff member unexpectedly left the position, and it took three months to find a replacement. They could not use any of that money for other programming or general operating expenses, which made the organization feel they had missed out on money on which they previously budgeted. This experience taught both me and the nonprofit the benefits and challenges of having restricted funding in their budgets. If you are working with grants as a consultant, or even working as a grant professional within a nonprofit, getting a handle on the differences between restricted and unrestricted grants is going to make a big impact on how you approach funding and budget development.

You know that you need an external evaluator. Maybe your organization doesn’t have the internal expertise or time to conduct a program evaluation yourself, or a grant funder requires a third-party evaluation. Many programs—and organizations—feel that they can’t afford an external evaluation, and funders don’t always pay for program evaluations. However, if you can convince donors and funders that your program is effective and efficient, you’ll be more competitive for future funding. A strong evaluation provides valuable information for data-based decision-making to inform program refinements and continuous improvement. Funders have a limited amount of dollars to award and, therefore, want to fund effective projects.

Many organizations lack the qualified staff to conduct a program evaluation. While some organizations do have the capacity and expertise, many need to contract with an external evaluator for one or several reasons. For instance, using an external evaluator can be more economical and efficient, can provide a more credible report due to objectivity, and is sometimes a grant requirement.

If you have ever flinched at the mention of policies and procedures, conflict of interest, or grant reporting, we may be able to help take the fear out of grant management. Too often, grant management is seen as scary and messy, with staff hesitant to learn because they may uncover more than they know how to handle. In the nonprofit field, it’s common for staff to be put in a role where they manage grants but might not have the knowledge or resources to understand what that entails. With this grant management series, we aim to outline some of the commonly seen issues and provide resources to learn more. Check out the previous post on conflict of interest policies and procedures! Now, we are diving into time and effort reporting and staff allocation.

Too often, grant management is seen as a scary, messy aspect of grant funding, and we have a vague understanding of the requirements or components. In the nonprofit field, it’s common for staff to be put in a role where they manage grants but might not have the knowledge or resources to understand what that entails. These are common scenarios, and while they may be new or unknown, taking steps to understand how grant funds should be managed is critical to the nonprofit’s success.

Over the past year, you may have overheard grant professionals discussing potential OMB Uniform Guidance updates. If you are wondering what that means and what may apply to you or your organization, here is a quick look at what changes occurred and what you should know. What is Uniform Guidance? Office of Management and Budget (OMB), an agency within the Executive Office of the President, issues government-wide grants-related guidance for federal departments and agencies and is responsible for the maintenance of this document. Before 2013, federal grant requirements were located in multiple OMB circulars. OMB developed a comprehensive guide for the Federal government’s Administrative Requirements, Cost Principles, and Audit Requirements for federal awards that became effective in 2014. In essence, this updated, reorganized, and consolidated federal grant management requirements into a single document.

Ethics are moral principles that govern an individual’s or group’s behavior or activities. Within the grant profession, the Grant Professionals Association (GPA) has defined a clear code of ethics for members to abide by and establish boundaries within practice that uphold the integrity of the industry. Members of GPA or a professional association with defined codes of ethics need to understand and agree (or accept) the ethical boundaries the organization upholds. Members found to be in violation of the association’s ethics can be sanctioned with temporary or permanent suspension of membership or revocation of their credentials. While some ethical responses are intuitive, others are unclear. Below are three not-so-obvious ethical quandaries commonly encountered by organizations.