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Understanding and Protecting Donor Intention and Grants

October 8th, 2014 No comments

Nonprofits and NGOs are in a delicate position because they depend on donors to uphold and support their cause and grants to fund their mission. At the same time, their donor counterparts and grantors are passionate and excited about imagesthe mission, and nonprofits need to respect the intent of the charitable donation or grant.

If donors were to find out their money was spent in a way contrary to their desire, future funding could be in jeopardy, not to mention the potential for a PR crisis. This is why clear communication with donors is extremely important for nonprofits and NGOs of any size. Adhering to donor intention doesn’t just protect your relationship with one particular donor or grantor; it also protects the overall mission of your nonprofit.

Understanding Donor Intention and Grant Restrictions

There are many layers of donor intent and three specific grant restrictions. Before setting up a grant or making a direct donation, philanthropists may have broad or very specific guidelines on how the funds should be spent. Terms and conditions of a grant or donation may include:

  • Unrestricted: without a designated use
  • Temporarily restricted: contains specific guidelines on how it will be used
  • Permanently restricted: must be held indefinitely (often with the intent to generate interest)

Even if a grant or donation is unrestricted, special care should be made to address the donor’s intent. This helps develop a relationship of trust that will hopefully extend far into the future.

How to Protect Donor Intent

The first step to protecting donor intent is to have a clear cut mission statement. You mission statement will not only help attract donors, it will help attract the right kind of donors—ones who are passionate about your cause. When you share the same goals, then most of the time donor intent will align itself naturally with your everyday processes.Capture

Along with a clear mission statement, your nonprofit or NGO should have a strong commitment to ethical behavior on all levels of the organization. Perhaps this goes without saying, but even the slightest deviation from honest business practices (intentional or not) undermines your entire organization. Even in cases where donor intent isn’t clearly defined, all funds should be allocated with complete transparency and a commitment to spend it according to your donor’s wishes.

Finally, your nonprofit or NGO needs the right accounting and reporting tools so you can actually show your donors that you’re spending their funds as intended. In Geni Whitehouse’s whitepaper for Serenic Software, Grant vs. Grantt, she states, “Grant managers have strict accountability and tracking requirements, specialized reporting and measurement needs, and complex revision tracking requirements. It should be no surprise, then, that grant managers need special tools to support them.”

Selecting the Right Grant Management Software

Haphazard grant management increases the chances of mistakes and misallocation of funds. To ensure that your nonprofit or NGO is compliant with all fund restrictions, you need dedicated grant management software that integrates with your nonprofit accounting software.

Your organization’s mission is best supported with grant managing software designed specifically for nonprofits and NGOs; learn more about Serenic Software’s grants management solution, AwardVision

Gantt vs. Grant: Summary of Choosing the Right Nonprofit Software

April 4th, 2011 No comments

Once you take a closer look at projects and grants, it becomes clear that the two disciplines are very different. From the purpose of their role, to the stakeholders they serve, to the process of bidding and receiving an award, grant managers have some unique requirements to meet. What’s more, grant managers have strict tracking requirements, specialized reporting and measurement needs, and complex revision tracking requirements. It should be no surprise, then, that grant managers need special tools to support them.

Grant managers need tools that are fully customized to meet their specific needs. It is crucial for grant managers to have access to solutions that can simplify reporting and compliance so they have more time to facilitate solutions in support of a cause.

Thanks for following this blog post series on selecting the right nonprofit software.

Want the full PDF? Download the full whitepaper on Gantt vs. Grant: A Grant Manager’s Guide to Selecting the Right Software—and you’ll be a few steps closer to choosing the right software for your nonprofit organization!

Differences between Nonprofit Grant and Project Management: External Reporting and Revisions

March 23rd, 2011 No comments

 

 

External Reporting

What information needs to be shared?

Flexible reporting across a number of different time-periods is a key requirement for any successful grant manager.


 

Revisions

How are changes handled?

The grant manager needs to be able to track expenditures against both the original grant and any subsequent revisions.

 

 

Next week, we’ll sum up the differences between grant and project management, helping you choose the right nonprofit software for your organization.

Stay up to speed on all of our Gantt vs. Grant posts here: Gantt vs. Grant: A Grant Manager’s Guide to Selecting the Right Software


 

Differences between Nonprofit Grant and Project Management: Restrictions and Revenue

March 17th, 2011 No comments

Please refer to Parts 1-6 on the various problems grant managers face in selecting the right software, and the differences between role, stakeholders, pre-award, award, funding, tracking costs, sources, internal reporting and progress indicators.

Restrictions

How are funds restricted or allocated?

The grant manager needs to be able to quickly associate grant funds with detailed award line items as well as individual field locations and discrete projects. He also needs to view totals for award estimates, obligations, and amounts by line item.

Revenue

How is revenue recognized by each function?

Accurate tracking of costs in conformity with budget is crucial to the grant manager’s ability to receive timely reimbursement. At the same time, the manager needs to stay on top of outstanding funds via rules that he can use to generate invoices that are tracked in a receivables system.

 

Next week, we’ll touch on external reporting and revisions.

Stay up to speed on all of our Gantt vs. Grant posts here: “Gantt vs. Grant: A Grant Manager’s Guide to Selecting the Right Software”

Differences between Nonprofit Grant and Project Management: Sources, Internal Reporting, and Progress Indicators

February 28th, 2011 No comments

Sources

How are awards from multiple sources managed?

The grant manager needs a solution that not only supports both detailed tracking of individual expenditures, but also helps him associate matching funds and in-kind awards with a given project.

Internal Reporting

What reports does the manager need?

The grant manager needs flexible, timely reporting that allows him to go from detailed line items to summary information as needed. In addition, he needs to be able to show evidence of compliance with all applicable rules and regulations, in conformity with all audit standards including Federal A-133 requirements.

Progress Indicators

What are interim indicators of success?

The grant manager must show evidence of compliance with a grantors terms and conditions via interim reporting and on-going communication.

Next week, we’ll touch on fund restrictions and recognizing revenues.

Stay up to speed on all of our Gantt vs. Grant posts here: Gantt vs. Grant: A Grant Manager’s Guide to Selecting the Right Software

Differences between Nonprofit Grant and Project Management: Funding and Tracking Costs

February 22nd, 2011 No comments

Funding

How are the funds disbursed over time?

For the grant manager, flexibility in allocations and alignment with the original award document is crucial for timely reimbursement.

Tracking Costs

How are expenditures monitored?

The grant manager needs a solution that provides nearly unlimited coding options plus the ability to allocate costs across line items, funds, and grants.

Next week, we’ll touch on multiple source management, internal reporting, and progress indicators.

Stay up to speed on all of our Gantt vs. Grant posts here: Gantt vs. Grant: A Grant Manager’s Guide to Selecting the Right Software

Differences between Nonprofit Grant and Project Management: Pre-Award and Award

February 14th, 2011 No comments

Please refer to Part 1-3 on the various problems grant managers face in selecting the right software, and the differences between role and stakeholders.

 

Pre-Award

How is a project or grant initiated?

The grant manager needs a detailed budgeting solution with a flexible account structure that can exist outside of the general ledger.

 

Award

How is a project or grant awarded?

The grant manager needs to keep a close eye on cash flow, manage multiple funding sources, and get funds to field offices in their native currency.

Next week, we’ll touch on funding and tracking those costs.

Stay up to speed on all of our Gantt vs. Grant posts here: Gantt vs. Grant: A Grant Manager’s Guide to Selecting the Right Software

Differences between Nonprofit Grant and Project Management: Role and Stakeholder

February 7th, 2011 No comments

Please refer to Part 1 &2 on the various problems grant managers face in selecting the right software, and the differences between grant management and project management.

Role

What is the primary responsibility of the manager in each of these functions?

Stakeholders

Other than the manager, who else is interested in the outcome of the activities being monitored?

For grant managers, software should provide real-time information regarding the use of the funds for specified purposes, including timely updates from the field. The system should capture statistical data so that detailed reports can be given for constituents served. Information needs to be secure but easily accessible based on roles and the rights assigned to individual stakeholders. Account structures need to be flexible, not rigid or hard-coded so that managers can comply with the diverse requirements of individual grantors. Not-for-profit software must be able to meet the tracking and reporting needs of both grantor organizations and grantees.

Next week, we’ll touch on how projects and grants are initiated and awarded.

Stay up to speed on all of our Gantt vs. Grant posts here: Gantt vs. Grant: A Grant Manager’s Guide to Selecting the Right Software

Gantt vs. Grant: The Solution

February 1st, 2011 No comments

Unfortunately, these two similarities have been enough to lead many not-for-profit software vendors to address the needs of both camps with what is essentially the same shovel. In many cases, this decision was made because they had no other choice; historical limitations of their software design forced them to handle both functions in a single application. But we’re not in the Dark Ages anymore. Software has evolved to meet the unique requirements of nonprofit organizations and their grant managers, making the frustration of trying to manage grants with project management software a thing of the past.

However, before you can determine which software best meets your needs as a grant manager, it is important to understand the critical differences between grant management and project management. We’ve already discussed the similarities; now it’s time to concentrate on the differences so you can be sure you’re making the best choice in a nonprofit solution. In this blog post series, we will compare these two functions across each of the following areas:

  • Role
  • Stakeholders
  • Pre-Award
  • Award
  • Funding
  • Tracking Costs
  • Sources
  • Internal Reporting
  • Progress Indicators
  • Restrictions
  • Revenue
  • External Reporting
  • Revisions

Next week we’ll get into the role and stakeholders’ responsibilities, so stay tuned!

Gantt vs. Grant: The Problem

January 24th, 2011 No comments

Abraham Maslow said, “I suppose it is tempting, if the only tool you have is a hammer, to treat everything as if it were a nail.” Apparently, many software companies are easily tempted.

No one would dream of using the same shovel to clear land on a construction site and serve up meals at a soup kitchen. Rather, they would use one piece of equipment for the construction project and different equipment to accomplish their charitable objectives. So why is it that project managers and grant managers have historically been expected to share the same software to meet the needs of their very different stakeholders?

The answer might lie in the fact that projects and grants share two unique operational requirements.

First, both projects and grants require the creation of separate fiefdoms within their respective organizations. In the case of projects, separately identifiable buckets allow the project manager to associate the costs of completing a project with the price of the job. Information gleaned from a single project is used to determine profitability but is also used to determine the bid price of the next job. For grant managers, separate buckets by grant allow the manager to monitor the funds expended in fulfillment of grant objectives. Individual grant expenditures information is shared with the grantor organization and others who have strict requirements for how those funds can be used.

Associating costs with a discrete number of activities is a common headache shared by both project and grant managers.

Secondly, both projects and grants have a tendency to cross over multiple fiscal years, which can play havoc with many systems. A project is designed to run over a discrete period of time with a defined beginning and end. Projects, therefore, require their own system of tracking that allows costs to be associated with the organization’s reporting periods. Grants begin on the date of an award and end based on agreement with the grantor. They may last for a specified time period or end when a result-based milestone is reached. Grants also cross fiscal years and must provide reporting across the individual grant time period, the fiscal period of the recipient’s organization, and the fiscal period of the grantor organization. The ability to report across different time periods is a necessity for both project and grant managers.

Next week, we’ll touch on the solution to choosing the right nonprofit accounting software, by covering the range of differences between grant management and project management.

Stay up to speed on all of our Gantt vs. Grant posts here: Gantt vs. Grant: A Grant Manager’s Guide to Selecting the Right Software