Article In Brief:
- The Problem: Nonprofits that do not deliver on the terms of a grant contract are at risk of having to return the funding.
- Why it Happens: Nonprofits stop after submitting a grant proposal and do not develop the necessary operating plan for how they will deliver the services if awarded the grant
- The Solution: Make sure you have a plan for executing against the deliverables you have agreed to in the contract.
There is a myth in the nonprofit world that I’m sure you’ve heard at some point in your career.
This myth promises every newly founded nonprofit that when you receive that coveted 501(C)(3) designation from the IRS, funding will rain from the sky, typically in the form of grants.
You might have pictured needing to carry around a literal umbrella and a bucket to catch all the grants that will fund your passion for helping the community. Most people in the nonprofit world know that this is a myth. There is no proverbial deluge of grant funding that your nonprofit will receive just because you need to provide services and build your organizational reputation, not to mention to find and apply for grants.
If you are still fairly new to this sector, or work at a smaller nonprofit, you may feel that grants are nearly impossible to be awarded—but don’t lose faith. Know that doing research, subscribing to grant databases, and even hiring a talented grant writer to help the organization, are all part of the process. Eventually you will be awarded funding, and when this happens, you will be over the moon.
But there’s a second part of the myth that nonprofits often don’t realize: You need to identify what you’re going to do with that bucket once it’s been filled. That is, before you get the grant, you need to be asking yourself if your organization is ready for the grant award. Or, put another way: Do you have a plan (beyond the happy dance) for what to do when you get that funding you’ve always wanted?
What Can Go Wrong
Let me tell you a true story. A medium-sized nonprofit with millions of dollars in revenue had been providing services for more than a decade but wanted to expand its reach in the community. The nonprofit found a great grant writer who helped it apply for 20 different requests for proposals (RFPs) for new programming. The heavens smiled on the organization, and it was awarded 12 of the 20 RFPs. Oh, how the staff celebrated—the symbolic umbrella was pulled out, and they did a happy dance, believing wholeheartedly in the myth of funding rain. These grants would move the organization to the next level, like something out of a fairytale. But that is not how the story ended.
After being awarded the grants, the organization hired eight new staff to run the expanded programs it had promised. Although the nonprofit claimed to have preexisting agreements with school districts wherein they could recruit new youth as part of the expansion, they had only preliminarily discussed the possibility of such programs with school district leaders. It would take 6 months for the school to actually approve these new programs. The nonprofit tried to problem-solve by recruiting youth from elsewhere but to no avail.
With no population to serve, the nonprofit was not providing the services required in the grant contracts. It ended up having to return 11 out of the 12 grants received and laying off all of the new hires right before the winter holidays. The makings of a success story quickly devolved into a nightmare.
The Ripple Effect
With the awards returned, the board grew concerned about the nonprofit’s financial hole. Combined with disgruntled fired employees and funders questioning the nonprofit’s performance on other projects, the nonprofit found itself in quite a mess!
At the end of the day, the organization did not have a solid plan to deliver the services its grant applications promised, and so the community never received these services.
How you can avoid such nightmarish scenarios in the first place? That is, everyone knows grant writing preparation is important, but what are the steps you can take to plan for after you successfully receive the grant?
4-Step Plan for Successfully Managing Grants
Getting the grant is only part of the story, keeping it is the other half. Unless done right your nonprofit is at risk of having to return the grant funding you are counting on. Here’s how to make sure that doesn’t happen.
|4-Step Plan for Successfully Managing Grants|
|1.||Develop a plan for services you hope to deliver with grant.|
|2.||Nail down specific deliverables you are committing to.|
|3.||Read the contract.|
|4.||Manage the contract.|
1. Develop a Plan
The grant writing process is not finished when the grant is submitted–I cannot stress this enough.
In the grant application, your organization is promising the funder that you can and will deliver certain services to community. Be sure that you can and consider what it will take to make your promise(s) a reality.
Imagine you’re a tutoring program that is applying for funding to improve students’ GPAs. You’ll probably need tutors, and you may also need computer software to help track students’ progress in subject areas. However, before you receive the funding, you will also need to have a plan to collect the students’ grades from the school. After all, how will you know that students’ grades are improving with your services if you can’t access students’ grades? Therefore, you must understand the process for obtaining students’ grades as well as the school district’s anticipated timeline in order to be responsible to both your funders and the student populations you are serving.
2. Nail Down Specific Deliverables
For most grants, there is a procedure for accepting funding. Before the contract is signed, the funder will collect additional information to develop the specificities of the contract or agreement, outlining the precise deliverables they want to fund.
This is the time to meet and build a relationship with the funder’s contract manager who has been assigned to you. They will be who you call when you need technical assistance or have a question about the expectations of the contract.
This is also the time to make any necessary adjustments to how you will deliver services. Of course, you will have to doublecheck any adjustments with the funder, but adjustments are absolutely a part of the contract finalization process. Don’t make the mistake of assuming you have to stick to exactly what you wrote in your grant. Use the plan you have outlined (Step 1) to tweak the deliverables in the contract.
In the example of the tutoring program, maybe you surveyed students and parents and found that your tutoring program would be more effective if it were hosted from 3 to 7 pm instead of 3 to 8 pm. You can’t just change the hours without letting the funder know. You need to show the funder that you plan to provide the service in the most effective way to the community you are serving.
Remember, talk to your contract manager. They can help you to nail down the specific deliverables before the contract is finalized.
3. Read the Contract
Once the contract is developed—after you nail down the deliverables in Step 2—read the whole contract in its entirety. Two points are crucial: you must read the contract before signing it, and you must be sure you clearly understand each clause and expectation before you sign.
Throughout this reading process, you should involve your board members, program staff, and anyone that will be responsible for delivering services.
As you are reading, you should also list all the deliverables that you are expected to meet, checking to see if they align with your planned deliverables (Step 2). If you don’t understand something or if something doesn’t line up, contact your assigned contract manager and ask questions.
Part of the reason you must read through the contract is to avoid any unanticipated requirements that the funders have added. For example, you would be surprised how many nonprofits don’t realize they needed to submit an annual audited financial statement as a condition to receive funding.
Essentially, you must know what you are signing up for to be fully prepared. Note each requirement and deadline. And repeat this to yourself in the mirror: read every part of the contract before signing it.
4. Manage the Contract
Next, it is time for contract management. This step will go much more smoothly if you have a comprehensive plan for how you will execute your deliverables (Step 1) as well as clear outlines of what is expected in the contract (Steps 2 and 3).
Yet again, you must set up processes to manage the expectations of the contract for all the funded program’s staff and/or volunteers. For instance, you might consider keeping a record of who needs to sign off on reports, invoices, and other documents. Think through whether you will give a staff member or a volunteer the authority to communicate with the funder on your organization’s behalf. Similarly, you should determine which documents you need to review personally before they are submitted to the funder.
Make sure your deliverables (with clearly marked deadlines) are outlined on a calendar. For each deliverable, include the expected input from each staff/volunteer involved.
Maybe you have decided that you need to collect sign-in sheets for documentation. If this is the case, develop a process for how you will collect and file the sign-in sheets. Consider whether you will scan each sign-in sheet or file them in a binder after each session for easy retrieval.
Similarly, if you need to manage performance measures, ensure that you have processes to meet those measures. For example, if you plan to collect school grades from tutored students, a process may look like each student submitting a copy of their report cards after each semester for data collection and reporting. Consider how you will communicate this requirement to staff, volunteers, and students.
Beyond mere communication, it is essential to train staff and/or volunteers on how to develop required documentation and to identify someone to be responsible for reporting results. Late reporting or inaccurate documentation during a funder’s audit will reflect poorly on the nonprofit.
Making Sure Your Grant Writing Efforts Don’t Go to Waste
Following this simple outline will help your organization be prepared to successfully manage any grant that you are awarded. Don’t put the effort into applying for several grants if you are not prepared to actually receive the award.
Make sure to include staff in the 4-step plan. And if you need additional help, hiring a professional to manage your contracts can be as important as bringing onboard a grant writer to apply for the funding in the first place!
The take-away is this: if you don’t manage the grants you were awarded successfully, the likelihood of future funding will be significantly impacted. Remember, funders note how organizations utilize and manage awarded funding.
Make a plan. Execute the plan. Keep getting funded.
About the Author
Charise Liburd hails from the Virgin Islands. She is a mother of three and grandmother of two. She is a Certified Nonprofit Professional who holds a Master’s in Public Policy/Nonprofit Management and Leadership and is a PhD candidate. She has more than 20 years of experience in the nonprofit sector as a funder, program manager, trainer, speaker, and coach. She specializes in strategic process development, capacity building, impact measurement, and grant management. She has worked with nonprofit organizations locally as well as internationally in several African and Middle Eastern countries. As a funder, she developed a funding process for Orange County, Florida’s government which grew from $4M to over $34M in 3 years. Her passion is helping nonprofits and small businesses gain efficiencies and grow.
Articles on Blue Avocado do not provide legal representation or legal advice and should not be used as a substitute for advice or legal counsel. Blue Avocado provides space for the nonprofit sector to express new ideas. Views represented in Blue Avocado do not necessarily express the opinion of the publication or its publisher.