When it comes to municipality funding, relying on just one source could mean an inability to deliver on constituent services if that source goes away.
For example, when the sequestration hit in 2013 and the federal government cut spending universally, municipalities that relied too heavily on federal grants were left without the resources needed to deliver services.
Without a healthy portfolio balance, funding losses or cutbacks from individual sources could cripple local programs and initiatives. Below are best practices to stabilize your portfolio and ensure proper fund management.
Audit Existing Portfolio Stability and Diversity
To ensure diversification of funding sources, first audit your current portfolio. Where does the majority of money come from today (i.e. sales and property taxes, permit fees, federal, state and private grants, etc.)? How stable are those revenue streams?
Next, uncover risks and liabilities—funding that has been unreliable in the past or could be in the future. Map out what funding scenarios would look like, and the overall impact on programs, if these sources were to disappear.
Finally, look for gaps or opportunities to diversify funding. Should a certain source type make up a larger or smaller percentage of overall municipality funding? Create a plan to transition to your desired future state. This may involve applying for different types or quantities of grants, evaluating tax structures or researching nontraditional sources.
Properly Manage Multiple Grant Funds
As part of your fund diversification plan, you may uncover opportunities to expand the types of grants received. However, the more grants you manage, the more difficult it is to track cash coming from and going to your city. From managing projects expensed from multiple grants to ensuring timelines, results and reporting requirements are met across funding sources, organization is key.
Grant management software can help streamline processes across internal stakeholders and sub-recipients, and ensure compliance with funder requirements:
- Store information, such as budgets, project plans and goals, for multiple grants in a secure, centralized location.
- Differentiate activities and spend by source.
- Seamlessly integrate with existing ERP and accounting systems.
- Automate reporting, deadlines and reminders for multiple grants.
Interested in improving municipality fund management? Download our ebook, “Municipalities and Counties: A Guide to Winning and Managing Grant Programs.”
Image Source: geralt