Streamlining Your Nonprofit Grant Reporting Process

With staffing levels stretched to extremes, many nonprofit organizations are finding it increasingly difficult to keep up with administrative tasks like grant reporting. However, grant reporting remains vital to a nonprofit’s ongoing operations, as grants account for about 20% of an average nonprofit’s income.

Even in less challenging times, grant reporting has often been a daunting task for both grantees and grantmakers. Simplifying the grant reporting process can improve accuracy, keep grantmakers satisfied and connected with the nonprofit’s mission and assure future paths to funding. Grantmakers are increasingly viewing grant reporting as a strategic planning tool for fund allocation, while grantees recognize the need to simplify data collection and analysis for better outcomes.

 

Steps to Simplifying Grant Reporting

Many nonprofits are working with grantmakers to streamline grant reporting requirements. Most grantmakers have their own unique application and reporting processes, but with fewer staff members available at nonprofits, grantmakers now are more open to easing the burden for grantees. Some steps include:

• • Nonprofits that work with several grantmakers to fund specific programs are requesting that all grantmakers accept a common reporting format.
  • Nonprofits are requesting changes to reporting timetables that work better for their schedules and workloads.
  • Some grantmakers are accepting 990-PF forms instead of specialized reports.
  • Many grantmakers are handling interim reporting informally through Zoom or conference calls instead of requiring printed reports. Year-end or final reports usually remain in printed format.

Putting Financial Accounting Software to Its Best Use

There are several ways in which you can use your nonprofit’s accounting system software to simplify the grant reporting process:

• • Most grant writers agree that developing project budgets for grant applications are a headache. Accounting software can help ease the burden by streamlining the creation of budgets and enabling progress updates as needed in the future.
  • Some nonprofits rely on outdated software that makes data gathering difficult for reporting purposes and inhibits collaboration. Cloud-based software can enable multiple users to access data, share new information instantaneously, and update reports from any location, which is an added bonus for so many people working from home.
  • Nonprofits must separate donated funds by whether their use is restricted or unrestricted. Accounting software can help to ensure restricted funds are only used for the program indicated by the grant award.
  • Some accounting software programs include project management tools that make it easier to plan for reporting updates so deadlines are never missed.
  • Most accounting software enables users to generate professional reports for required periodic communications with grantmakers.

Grant Management Software Brings Added Benefits

Although you can use general business accounting software to track grants and how the funds are used, many nonprofits invest in add-on software to fulfill specialized grant management needs. The benefits include:

• • Data can be added and processed quickly to easily track progress on designated grant programs.
  • Year-end and interim grant reporting for financial statements is easier, as is the development of the nonprofit’s 990-PF, which some grantmakers request.
  • Collaboration tools enable faster communication among the staff involved in the grant, such as the grant writer, grant manager, program manager and chief fundraising executive.
  • Historic data of past grants received from each grantmaker is accessible to the grant writer and grant manager, making it easier to complete grant applications and anticipate reporting requirements.
  • Streamlining and organizing grants received according to filters in the software enables grant managers to obtain timely and detailed information for the nonprofit’s annual reporting or interim updates to the board.

Different types of grant management software integrate with nonprofit financial reporting software on the market. Contact us and we can help you decide the best fit your nonprofit’s needs and requirements.

Contributing author: Peggy J. Rowe, CPA, CFE, is an audit partner at Dannible & McKee, LLP.  Peggy has over 34 years of experience overseeing audit, accounting and consulting services, specializing in nonprofit organizations.  If you have questions about the financial reporting for your nonprofit organization, contact Peggy at prowe@dmcpas.com .