04 Oct What If You Have Too Much of a Good Thing? by Jennifer Murphy, MPA, GPC
It’s normal and often encouraged to seek multiple funding opportunities for a single program, often referred to as braided funding (see Braiding Funds without Getting Tied Up In Knots – Approaching Budgets with Pre-Award and Post-Award In Mind by Julie Alsup, GPC). You might even request more funds than you need to run a program with the expectation that one or more proposals will fall through. As nonprofit organizations that belong to and are supported by the public, we should always be looking for new funding streams in case an existing source should dry up. But what if you ask for more than you need, and all the funders decide you shall receive?
First of all, tracking of outstanding and secured funds for a specific program, salary position, piece of equipment, or any other purpose for which you might request grant funding is vital. Without accurate tracking mechanisms in place, you might not even be aware that you secured funding for 140% of the children’s program director’s salary until it comes time to report on grant expenditures – and by then, it’s too late. (For details on how to track braided funding, check out Clarify Your Financial Situation with a Braided Funding Template by Emily Hampton, GPC.)
Once you recognize that a project or purpose is overfunded, transparency is necessary. It is unethical to just accept 140% of the children’s program director’s salary and spend the excess funds on a different expense. You must negotiate new terms with the funder or decline the funds. Go to the funder who pushed you over the funding limit and ask if they would be willing to redirect the funds that would have supported 40% of the children’s program director’s salary to another purpose. If the project isn’t fully funded, see if they are open to supporting a different line item in the project budget. If you have all the funds you need to deliver the project as presented, perhaps they would support bus transportation and supplies to expand services to a broader population than originally intended. If you reach a mutual agreement with the funder, be sure to finalize the terms of these conversations in writing. Unfortunately, if the funder is unable to redirect the funds to a different purpose, then you must accept a reduced amount or deny the award altogether.
While this might seem like an awkward conversation to have, it’s important to remember that funders and program officers are our allies in the grant lifecycle. We ultimately have the same goal to support and better the communities in which we live and work. It is more valuable to act with integrity and risk taking a loss in the short term than to quietly move funds around and risk damaging your organization’s reputation for years to come.
GPCI Competency #6: Knowledge of nationally recognized standards of ethical practice by grant developers
Skill 6.8 Distinguish between ethical and unethical commitment, performance, and reporting of activities funded by a grant.
Additional blogs in our Ethics series:
Let’s Go Shopping! Ethics in Procurement, Part 1 by Whitney Gray, MA, GPC
Above All Else, You Must be Honest by Maryam Gilmore, JD
Don’t Just Write It, Cite It: Ethical Research in Grant Writing by Leah Hyman
Building an Ethical Foundation for Your Funder Relationship by Emily Hampton, MPA, GPC
Let’s Go Shopping! Ethics in Procurement, Part II by Whitney Gray, MA, GPC