Non-Profit Organisations (NPOs) across the world are doing great humanitarian work, implementing projects and programs that create solutions for the people. These projects and programs mostly align with the UN Sustainable Development Goals.
To implement these projects and programs, grant funding is required, which often come with stringent compliance and performance requirements. The expectation of the funder is that the NPOs would ensure prudent management of the grant funds by demonstrating transparency and accountability.
NPOs, generally, have had challenges in meeting these requirements. The following are some of the challenges that have been identified, either through audit findings or fiduciary risk assessments:
- Capacity to manage the grant.
- Knowledge of grant management laws, rules, regulations, policy statements.
- Knowledge of current trends in grants management e.g., Performance-based funding, indirect service funding, International Aid transparency Initiative, risk, and integrity assessment.
- Knowledge and practical application of key donor requirements regarding budgeting, forecasting, expenditure reporting, and exchange rate management.
- Developing, writing, and evaluating grant proposals before submission.
- Understanding of full lifecycle grants management and impact on grant administration.
- Knowledge of internal controls from pre-award, award, post-award, monitoring, and close-out of the grant.
How will NPOs overcome these challenges?
Understanding full lifecycle grants management will be a great starting point. This article is a five-part series that will consider (1) Grants Management- the Basics, (2) Pre-Award requirements of Grant Funding, (3) Award Requirements, (4) Post-Award requirements, and (5) Grant Close-Out.
- Grants Management- The Basics
Let us begin by looking at the funding instrument required before one puts in any application for funding., Is the funding instrument a Grant, a Co-operative Agreement, or a Contract? Each instrument is governed by legislation, and an understanding of the funding instrument will prevent violations or breaches.
The Federal Grant and Co-operative Agreement Act (1977) distinguishes between assistance and acquisition. Grants and Co-operative Agreement fall under assistance, while contract falls under acquisition.
What is a Grant?
A form of financial assistance intended to transfer something of value to the recipient to carry out a public purpose as authorized by law. There is no substantial involvement by the funding agency during project implementation.
What is a Co-operative Agreement?
A form of financial assistance intended to transfer something of value to the recipient to carry out a public purpose as authorized by law. Substantial involvement by the funding agency is required during project implementation. You must anticipate substantial involvement when the Notice of Funding Opportunity or Agreement indicates that the recipient can expect funding agency collaboration or participation in the management of the project.
What is a Contract?
The Federal Grant and Co-operative Agreement Act states that a contract is used when the funding agency wants to acquire something. It is usually used in procurement.
Therefore, when the funding agency is aiding, we use grants or co-operative agreements, but when it is acquiring a service or services, the term contract is used.
The Grant Funding Landscape
In the United States, the total amount of Federal spending on grants has grown from nearly $7b in the 1960s to $703b in 2018.
Source: Office of Management and Budget
The Federal government is expected to provide state and local governments about $750 billion in federal grants in FY2019, funding a wide range of public policies, such as health care, transportation, income security, education, job training, social services, community development, and environmental protection. (Source: Congressional Research Service, 2019)
The Foundation Centre in the US estimates the amount of grant funds from private foundations to be around $316 billion per year.
There are over $1 trillion in grant funds available in the US alone! The amount available is even greater when we consider funding from other countries.
We can find grants from Foundations, Government, and Corporate institutions. The following are some of the great sources to begin the journey to securing highly competitive grant funds:
- Funds for NGOS – https://www2.fundsforngos.org/
- Candid- https://candid.org/find-us
- Government grants-www.grants.gov
Are you grant ready?
There are a few questions to answer!
What is the geographic focus of your program?
Which area will the program have an impact?
Which of the Sustainable Development Goals does your program support?
What type of support is needed? (Organisational development? Equipment? Construction?)
How would you demonstrate accountability and transparency?
Are you able to demonstrate internal controls in your grant application?
There is so much information out there on grant funding!
There is money to support almost any project or program that seeks to benefit others, whose impact can be measured but we need to be ready to fulfill all compliance and performance requirements.
“People don’t want to fund your existence, they want to fund your impact.” – Beth Brodovsky