For Bee Clubs
by Michele Colopy
Grants Are Not “Free Money” A Nonprofit Can “Do Anything With”.
Your beekeeping organization has enhanced its financial literacy, presented in the last issue of Bee Culture magazine. Now your Treasurer, and Board are ready to expand the opportunities to their members and the public, and seek grant funding for collaborative projects. More and more funders, with limited grants to award, favor those grant applications which are collaborative projects, comprised of two to five groups working together for a common cause or project.
Before you apply for grants, can you manage the funds once you receive them? There are far too many myths about grant funds, most of them will result in the funds being returned, or someone facing fines. Grant funds must be used for the purpose described in the grant application. Nothing else!
Grants are not “free money” a nonprofit can “do anything with.” A grant application defines a project, the costs, the responsibilities, the goals, the outcomes, and the timeline for the proposed project.
The funder in awarding the grant funds to your nonprofit, signs a contract with your nonprofit that you will spend the grant funds as defined in the grant application and contract. The grant award/contract will also define the repercussions concerning unspent, and misspent grant funds. A grant writer/manager’s reputation, to secure other grant funds, is based on how they manage each grant they receive. If other leaders in a nonprofit misuse funds, it will damage the grant writer/manager’s reputation first, then the nonprofit’s. Competent, reputable, professional grant managers are protective of their reputation, requiring collaborative partners and staff and Board members within the nonprofit, to work together to fulfill the grant contract per the guidelines.
- Only expend funds as laid out in the approved grant budget
- Never use funds from a grant for items not included in the grant budget or for purposes other than described in the grant narrative
- If the original budget requires amendment in order to support the purpose of the grant, contact the funder to get permission before making changes
- Support every expenditure with adequate documentation
- Use a system of checks and balances so that no one person is solely in charge of the money (i.e., dual sign-offs on expenditure requests and checks).
- Keep receipts, documentation, and monthly financial statements well organized and accessible
- Monitor grant expenditures monthly to ensure that over-spending or under-spending can be addressed before the end of the grant period.1
A grant is typically written three to nine months prior to it being awarded. It is important to review the original application comparing it to the grant award. If any changes occurred in timelines, or expenses, contact the funder and discuss the changes. Open, clear, honest communication is key in managing grants. Since time has passed between the application and the award, is the leadership of the nonprofit still committed to the project? Make sure the staff and volunteers understand the grant project, expectations, schedule, and budget. Maintain communication with staff, volunteers, collaborators, and the funder so the project can be successful, and the funds managed effectively and legally. Make sure to meet deadlines for drawing down the grant funds, collecting data from the project for reports (to the nonprofit and to the grant funder). Most importantly, thank the funder for the grant. Acknowledge their grant to the community. Recognize their support of your work and the collaborative project.
Robin Toal, writing for Funds for NGOs:Grants and Resources for Sustainability offers the following tips for managing grants:
- Build trust with your funders and grant partners. “Put everything in writing.”
- Implement the grant within the “project start and end dates” per the contract.
- Meet the goals of the project within the project budget. The grant contract will define the timeline for the project goals.
- Spend the grant funds per the grant. Underspending a grant is as inappropriate as overspending. If you underspend a grant you have to return funds to the funder. Follow the contract. If costs have changed since the application, ask the funder if you can adjust the budget based on current market conditions.
- If multiple donors are funding a project, strict monitoring of each donor’s contribution and expenditures applied to the contributions is important.
- If the budget includes purchasing equipment, purchase it first, not at the end of the project period.
- Ongoing communication with staff, volunteers, and collaborative partners is key to preparing donor reports. Collecting data at regular intervals helps to ensure timely reporting to the funder.
- “Reports must be complete and accurate,”2 on time, and applicable to the project and the budget.
- “Keep clear contract files and budget notes.”3
- Communicate to eliminate surprises. If a situation arises where the nonprofit cannot meet a reporting deadline, the project is experiencing set-backs, contact the funder to discuss the issues. Situations can arise that are completely out of the control of the grant manager: key staff could take another job in the middle of the project, or the organization’s building could burn down with all of the grant records, the equipment purchased, and the space where the program was presented. The funder cannot work with you, if you do not talk with them.
A good Grant Manager will “provide professional, high quality service”4 to ensure the funds and the project match the grant contract. Capacity Builders defines the value and work of a good Grant Manager who will:
- Keep your organization out of trouble with the IRS and its funders.
- Make you audit ready.
- Create or continually update policies and procedures for how grant funding must be used and accounted.
- Support (not shove) your organization into meeting such policies.
- Assist you in creating organization-wide forms, spreadsheets, and reports to track and control systematized grant activity and evaluation.
- Educate your staff and stakeholders on the spending and cost principle policies of your funders to avoid spending pitfalls.
- Take care of your grant drawdowns and expenditure reports.
- Oversee the leadership of your grant programs.5
There is no easy way to manage grants. It takes planning, communication, and documentation. Even if you get lured into purchasing “grant management software,” you have to enter the data you need to track, and you still have to communicate to others to secure the documentation in order for the software to print a report, and you still need to have separate professional accounting software. Grant management software is for large nonprofits with millions of dollars in grant funds, and dozens of grant funded programs annually. A volunteer beekeeping organization receiving one to three grants a year every few years would be wasting precious funds on such software. Member funds are best spent on a professional accounting software program, and word processing and spreadsheet software. When in doubt: ask! “If you don’t understand something, figure out who can provide you with accurate information and call them. If you are overwhelmed, retain a consultant to determine exactly what you need to do, and to help you get the necessary systems set up.”6
Grant funded projects allow a nonprofit beekeeping association to tackle larger projects, collaborative projects, and meet the needs of members and the community. The organization must understand prior to applying for grant funds how they will manage those funds. It takes planning, communication, and documentation, but most importantly a willingness to ask questions, and ask for help if needed. The reputation of the beekeeping association, collaborative partners, grant manager, and funder all depend upon ethical, legal management and implementation of grant funds.
1Managing the Grant, Barbara Floersch, The Grantsmanship Center, http://ww.tgci.com/articles/managing-grant
210 Top Tips for Grant Management, September 26, 2013 By Robin Toal, Funds for NGOs:Grants and Resources for Sustainability, http://www.fundsforngos.org/all-listings/10-top-tips-grant-management/
4What Good Grant Managers Do, Capacity Builders, http://capacitybuilders.info/services/the-art-of-grant-management/what-good-grant-managers-do/
6Managing the Grant, Barbara Floersch, The Grantsmanship Center, http://www.tgci.com/articles/managing-grant
Administering Grants Effectively, Government Finance Officers Association, http://www.gfoa.org/print/1737