You Got the Grant. Now what? (Part One)

Nonprofits love to hear the phrase “you got the grant!” With this column we share suggestions for things to consider once you receive a grant. Some may appear self-evident, and others may not. What’s most important is that your good news doesn’t turn into a bad situation.

In most cases a grant notification includes a letter or document that you need to sign. This will typically lay out the terms and conditions of the grant. Read this carefully, as these are your obligations. Typically, the document will define what you can use the funds for, and what you can’t use them for. A “general operating” grant can usually be used to pay expenses related to operating your organization. A planning grant is often restricted to expenses related to planning for a program, event, or building. Program funding might be restricted to expenses directly related to your programs. The document will also include dates you need to be aware of. These could be the date you can start expending funds and the date by which you must have expended all the funds, as well dates for reports the funder may request.

Some grants are “matching grants.” This means that your nonprofit will be required to raise an amount that matches the amount of the grant in order for you to receive the grant. In many cases funding for a matching grant is made after the nonprofit raises the match and communicates that to the funder. Some grants are “reimbursable” which means your nonprofit will be reimbursed for expenses after you make the purchases. Check to see if this is the case. If it is, that means you have to have enough funds on hand to cover the costs that the grant will eventually pay for. This can be a difficult situation if you are a small nonprofit with limited cash flow or funds.

Reporting requirements vary from funder to funder. You may need to submit a financial report along with a description of how the funds were used and what was accomplished. Some funders will want to know what your future plans are. There’s the chance that the reporting could be very complex, even if the grant size was small. In all cases, look carefully to see what is required.

If this is your first grant, you need to take care to not “co-mingle funds.” This means making sure you have a bank account established in the name of the nonprofit and that all gifts and grants are deposited into this account. You should also set up your bookkeeping system to track the use of funds.

As you can see, there is a lot to keep track of when your nonprofit receives a grant. You will also want to make a timeline for how and when you will spend the funds. You should let your board know about the grant as well as those you serve. Most importantly, call the funder to say thank you and ask questions.


Copyright 2022 – Mel and Pearl Shaw of Saad&Shaw – Comprehensive Fund Development Services. Let us help you plan for 2022! Video and phone conferencing services are always available. Call us at (901) 522-8727. www.saadandshaw.com

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