4 Sins of Grant Management for Small and Mid-Sized Nonprofits

Imagine you are the CEO of an average small or mid-sized nonprofit.

You are great at your job, you believe in your mission, and you care about your lean but mighty team of staff and volunteers. Your modest annual grant portfolio has been growing slowly but steadily. There are not enough grant opportunities to hire a full-time grant writer, so you ask your Director of Development to manage the process. You are applying to more funders for more grant dollars every year. This is wonderful! Your board is happy. Your programs are serving more people. New funding opportunities are opening up as you get better data about program success. Everything is going great….except it’s not.

What you aren’t seeing is that your Director of Development hasn’t slept in three weeks and your current success with grants is just a fraction of what it could be if your organization was not accidentally embracing the four major sins of grant management.

Sin #1: The wrong people are writing your grants.

Grant writing, like every other aspect of fundraising, is about balancing the time your team spends on an activity and the money you raise from that activity. Imagine again that you’re the CEO and you do some quick math on a leftover gala napkin. What you will probably realize is that those six extra grants you’re applying for this year are costing your development team upwards of 150 extra work hours. 

Where are those 150 hours coming from?

They certainly can’t come from the annual fund – your fundraising goals increased this year. They can’t come from events, membership, or corporate fundraising either. Those goals are important, too! Maybe those 150 hours can come from that planned giving campaign you keep pushing back? Maybe your Director of Development can push off those donor visits until next quarter…

Even your amazing Director of Development only has only 24 hours in each day. This means that those 150 extra hours are coming at the expense of other responsibilities in your annual development calendar, or they are coming from a staff person who is working late into the night and on weekends. Another option would be to give the grant writing responsibilities to a staff member who should not be writing grants at all – perhaps you, the CEO. Or your intern. In any of these scenarios, those extra hours are costing you opportunities and causing burnout. 

This is the first and most common sin of grant writing. Nonprofits have the wrong person writing their grants. If your organization is like almost every other small or mid-size nonprofit in the country, you do not have enough grant work to justify the cost of a full time grant writer. As a result, your grant opportunities get farmed out to the CEO or Director of Development.  These are people whose time is better served conducting donor visits, recruiting new board members, or launching a planned giving campaign. 

If you’re in the same boat as our imaginary CEO, just picture what your organization could accomplish if your Director of Development had an extra 150 hours (almost a whole month) a year to grow your fundraising department.

Solutions: Scale back your grant program or find someone, like a contractor or a part-time employee, who can write your grants for a fraction of what you would pay your CEO or Director of Development to do the same job, and who can produce much higher quality work than someone else on staff who lacks grant experience.

Sin #2: Poor Relationship Management with Grantors

Foundations are crucial mission supporters, but nonprofits often ignore them after a grant is awarded and the standard acknowledgment letter is sent. Sometimes nonprofits even forget to submit required reports. It’s pretty easy to predict how a foundation’s board and staff will respond to this treatment over time. 

Nonprofits treat foundations like this largely for two reasons. 

Reason 1: The wrong people are writing the grants. When people like CEO and Directors of Developments write grants, they barely have enough time to write the grants let alone spend the hours and hours it takes to successfully plan and implement a stewardship strategy. 

Reason 2: Nonprofits do not have the correct tools to manage these relationships. Don’t let anyone tell you otherwise, relationship management is a science. Yeah, it helps to have some people skills, but you also need a system or tool that will help you manage your foundation relationships effectively and efficiently. 

During key staff transitions, it is very possible to lose track of your organization’s relationship with your funders. It is critical to be prepared for this and ensure that you have the people and the tools necessary to manage and track relationships with your funders in the long term. 

Solutions: 1) Get the right people to write your grants; 2) Find a CRM (database) that has excellent built-in relationship management software so you and your team can seamlessly implement your stewardship plans and also retain relationship history during staff transitions.

Sin #3: Losing Track of Grant Opportunities

Every nonprofit leader has a story about the grant that got away. There are dozens of reasons why this happens, but more often than not, it is either because 1) Staff do not have enough time to write and submit the application, or 2) The development team simply loses track of the opportunity. Like Sin #2, this happens because the wrong (very busy) people are writing grants and the right management and tracking tools are not in place. 

Solutions: 1) Get the right people to write your grants; 2) Find a nonprofit CRM with excellent relationship management software to help with tracking grant opportunities and keeping them on your radar. 

Sin #4: Not Researching New Opportunities

Researching new grant opportunities is time-consuming and costly. Foundation Center’s online directory can cost $1,500 a year and GuideStar is $2,000 a year. A Google search is always an option, but that can only get you so far. Time and money are extremely limiting factors, so nonprofits end up applying to the same funders that everyone else in their community and their sector are applying to each year. This is an adequate strategy, but it doesn’t lead towards growth and makes it very difficult to identify new opportunities that come from funders who adjust their focus, or from entirely new foundations.

Solutions: Be willing to invest in the right tools at your organization. Consider working with a contractor who has access to essential search tools and the expertise to use them. Alternately, consider hiring a part-time employee and be willing to purchase a subscription to a service like Foundation Center’s online directory.  

This is, of course, not an exhaustive list of all the grant management sins to which we nonprofit professionals fall prey – but it is a list of some of the most common and the most solvable grant management issues. Nonprofit work is about trying to do the most good with the fewest resources. If there is a small or midsize nonprofit that has the perfect balance of the time, money, and tools they need to manage all of their fundraising efforts perfectly, then I congratulate them. But I’ve never met them. Taking a step like bringing in a contractor to manage some or all of your grant management process or purchasing a CRM that will provide you with the tools you need to manage relationships and not miss deadlines may require some boldness, but it has the potential to reinvigorate your organization’s approach to grants and provide you with new opportunities to grow your whole development program.