Marketing automation for nonprofits: Why it matters
- Digital communications & marketing
- Nonprofits
- Donor Engagement
Nonprofit organizations are unique in that they rely heavily on the generosity of others to operate effectively. This means they must keep in mind various forms of fundraising, always looking for the latest trends of the sector to incorporate into their strategies.
A great source of revenue for nonprofit organizations is grants.
To make the most of both your grant monies and your individual fundraising revenue, your organization needs an effective management system and a plan for all of the awarded funds. That’s why we’ve developed this guide to help nonprofit leaders better understand the challenges of managing grants and tips to address them.
When your organization submits grant proposals, it’s essential that you have an effective method of organizing those various grants. Doing so will help you achieve your fundraising goals and remain in good standing with your grantmaker. Let’s dive into grant management best practices.
Organizations need to record awarded monies from grants at different times depending on the type of grant. This is to stay compliant with the Generally Accepted Accounting Principles (GAAP).
Jitasa’s grant management guide provides the following summary image of the different types of grants:
Effective grant management will help you keep track of the types of grants you’re applying for and ensure you appropriately record the money in your fund accounting system.
When you host a Giving Day for your organization, a lot of the money you generate is considered “unrestricted,” meaning it can be used however you want. For grants, you can earn unrestricted funding through unconditional grants.
When you apply for an unconditional grant, ensure you still have a plan for how you’ll use the awarded funds.
Unconditional grants are recorded as soon as you know you’ve won the grant. If you receive an award letter, you can record the grant right after you receive it. If there is no reward letter, you can record the grant monies after you receive them.
Some organizations require your organization to fulfill certain conditions in order to receive the funds. Generally, this money comes in installments over time as your nonprofit meets the grantmaker’s requirements.
In this case, your nonprofit organization would record the money as it is awarded to your organization. If it’s provided in two installments, you would record those installments as they’re paid to your organization.
Reimbursable grants are given to organizations only after they’ve incurred the costs for the program that the grant will cover. For instance, if a company provides a grant that will cover an educational program for your nonprofit, you’ll need to first pay for the program. Then, the grant will be paid to reimburse your organization. In this case, your organization will record the expenses as they occur, followed by the funds as you receive them.
Because there is so much variation in the type of grants you can receive, where the monies will be allocated, and how you’ll report on the funds, it’s necessary to have an effective system to track grant funds.
When it comes to grant management and tracking, your organization should remember to:
Effectively tracking your grants will help your organization ensure you never miss a deadline and that all of the funds are used for the appropriate projects. It’s preferable to set up your system when you start applying for grants and essential when you win several grants.
To manage your grants, you first need to win them! Luckily, with a good grant writer and a compelling purpose, you’ll be on track to win more funds. To help you, we’ve compiled a list of tips that can set your organization up for success:
Grant proposals require time and effort to make them convincing and effective. Use your proposal to plan out projects and funding for your organization. Then, communicate those plans to your funder.
Grantmaking is a key source of funding for nonprofit organizations. Make sure you have a comprehensive understanding of how grants are awarded and recorded so that you never miss a deadline and ensure funds are used appropriately.
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