Grants don’t need to be re-paid, but the money is not entirely free. To raise non-profit awareness about the hidden costs of managing grants, I conducted a workshop last month in Washington, DC, sponsored by the United Way of the National Capital Area and PBMares.
The grant management workshop focused on five important questions that non-profits should answer for themselves before applying for a grant. How your organization answers these five questions can help avoid cost and stress.
1. Does the grant fit your organization?
Make sure that any restrictions placed on using grant funds fall within your mission. Grants for activities not within your core operations add to costs and detract from existing programs and services. Also make sure the grant amount is worth the time and resources to manage it.
2. Is there capacity to deliver the grant’s programs?
Grants add to work demands and take resources from existing programs and operations. Identify the people and other resources necessary to manage the grant and deliver its objectives. Be realistic about whether existing resources will be enough.
3. Can you produce required reports?
Grants usually have reporting requirements, such as accounting for grant receipts and disbursements, how the grant funds were used, and what accomplishments were achieved. If those reports cannot be readily produced using your existing systems and processes, consider the time and money it would take to get there.
4. Are administrative costs in the proposal?
Grant provisions often allow for administrative costs, usually expressed as a percentage of the grant amount. Administrative cost percentages must be reasonable and customary, and cannot be exceeded even if actual administrative costs are more than anticipated.
5. Any federal or state regulations to follow?
Federal, state, and pass-through grants come with requirements that may not be part of your day-to-day procedures. Being aware of grant regulations is essential for deciding whether government grants are a good fit.
Non-profits and small businesses that can confidently address these five questions could find grants to be a great option. A little advance planning before taking action can really pay off.