A comprehensive guide to enterprise grant management

Full grant lifecycle full-grant-lifecycle

Overseeing the Full Grant Management Lifecycle

The full grant management lifecycle is composed of numerous stakeholders and stages—creating a complex ecosystem that can be difficult to manage without the right processes and tools in place. Luckily, we’re here to help you navigate it.

Full Grant Management Lifecycle

Grantor Management

Grantors are federal agencies, state and local entities, foundations and other organizations that provide grant funding to recipients. They are responsible for award management (the evaluation and selection of funding recipients)—either in a competitive fashion or not, as well as post-award performance and monitoring (ensuring grantees are adhering to grant agreement budget and performance goals).

Grantee Management

Grantees are recipients of funds and responsible for managing the award. Their role in the grant management lifecycle encompasses several key components:

Grantor and Grantee Management

It is quite common for organizations to function as both a grantor and a grantee, in that they are a lead grant recipient who distributes part of their grant funding to sub-recipients.

In this role, the full grant lifecycle—from award management and selection to post-award reporting—is managed within the organization.

Optimizing Your Role in the Grant Process

If you’re involved in enterprise grant management as either a grantor or grantee—at any position level (grant coordinator, program manager or executive), this page is your guide on how to prepare your organization in a time of transformation.

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A Period of Change for Government Grant Management

Beyond the inherent complexities of the grants ecosystem, the industry is undergoing a period of transformation, driven by key legislative changes at the federal level.

Government Grant Management Legislation Timeline

  • Uniform Grant Guidance (UGG). Released by the Office of Management and Budget (OMB), UGG updated financial management requirements for federal awards. Grantees are now audited on performance management systems, in addition to grant performance itself. The guidance also requires standardized internal business processes and data, and cost-management consistency.
  • Digital Accountability and Transparency (DATA) Act. Signed into law in 2014, the DATA Act standardized the spend data reported by federal agencies to the Treasury, Office of Management and Budget (OMB) and General Services Administration (GSA). It also required that this data be published online in an effort to increase spending transparency, and reduce waste and fraud.
  • “Treasury Do Not Pay” Initiative. Designed to reduce improper government payments, the initiative aims to determine grantee eligibility prior to releasing federal funds. It also allows federal agencies to stop payments if a recipient is noncompliant with award requirements.
  • Open, Public, Electronic, and Necessary (OPEN) Government Data Act. Introduced in Congress in March 2017, the act would require all public federal data sets to be published in an open, machine-readable format for easy access by the public and private entities.
  • Financial Transparency Act. Also introduced in March 2017, the act would standardize securities, commodities and banking law information, and mandate its publishing in a machine-readable format (similar to how the DATA Act modernized federal spend reporting).
  • Grant Reporting Efficiency and Assistance Transparency (GREAT) Act. Introduced in Congress in January 2018, the GREAT Act looks to extend DATA Act standardization efforts to the information grant recipients submit to agencies. If enacted, a common taxonomy would be in place for both grantee and agency reporting.

Collectively, these initiatives are pushing for a more transparent environment, in which grantees, grantors, watchdog groups and the public can more clearly see how government money is spent—reducing waste, fraud and abuse. As a tangible example of how this could work in practice, Christina Ho, CEO of PolicyInsights Inc. and former deputy assistant secretary for Treasury’s Office of Accounting Policy and Financial Transparency recently used data on beta.usaspending.gov to uncover more than five billion dollars in unspent federal money sitting in closed accounts.

The possibilities are endless. If government data sets are in an open format, predictive analytics tools can be used to assess and identify risk, forecast outcomes and unearth opportunities for better use of resources.

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Maintaining Grant Management Compliance in a New Era

In order to ensure compliance and accountability, grant-reliant organizations will need to update their business processes to align with new legislation. Below are some of the biggest resulting trends:

Standardization Is the New Norm

Standardized data fields and formats can eliminate duplicative and unnecessary reporting across the grant ecosystem. Historically, each federal agency asked for information in its own way—often in varying formats and using unique, agency-specific identification names for form fields. For grant recipients, this meant that the same information could be submitted in different ways depending on the funding agency. Information couldn’t be easily shared between agencies.

Data standardization would allow for information to be consolidated across federal agencies and departments. This makes it possible to aggregate recipient data governmentwide, compare information submitted in an apples-to-apples format, and publicly publish the data in a useful manner.

Standardization is mainly driven by the DATA Act, which required federal agencies to start reporting via a standardized data structure as of May 9, 2017. The DATA Act Broker, a new, government-wide data structure outlined in the DATA Act Information Model Schema (DAIMS), was created as a collaborative effort between industry stakeholders, and is the official taxonomy for agency grant reporting.

The DATA Act pilot program also introduced the Common Data Element Repository (CDER), which standardizes more than 11,000 federal grant data elements from HHS forms, HHS’ payment management system, DAIMS, U.S. Department of Agriculture (USDA) and National Institute of Food and Agriculture (NIFA) forms, and standardized UGG definitions. Though grantee-level reporting to agencies is currently not mandated, the CDER could serve as a model should the GREAT Act or related legislation pass.

Data Must Be Machine-Readable

In addition to collecting data under standard names, information should be machine-readable. Machine-readable data is written in a format that can be read easily via a computer or web browser [e.g. Extensible Markup Language (XML), JavaScript Object Notation (JSON) and comma separated values (CSV)]. It is a shift away from portable document format (PDFs), word processing documents and the likes, which trap information in the document itself.

Open, machine-readable data is a top priority of the U.S. government and a core component in many new legislative initiatives. Housing data in this way can greatly reduce the administrative burden associated with compliance reporting for both grantors and grantees, as information can be easily reported, aggregated across agencies and published.

Performance Becomes a Focal Point

Another major trend is the growing focus on performance-based reporting. UGG guidelines now require organizations demonstrate that funds are used appropriately. The “Treasury Do Not Pay” initiative makes it possible for organizations to lose money if noncompliant with grant agreements. And the DATA Act makes it easier to uncover grantees that may be misusing or inefficiently spending funds.

Today, it’s not enough for grantees to claim success via subjective feedback or vague key performance indicators (KPIs). Organizations must be able to clearly tie spend and activities to measurable results. This requires a strong performance management system that effectively aggregates financial and programmatic performance data from recipients and sub-recipients. It also requires organizations to keep a better pulse on spending and results internally throughout the grant lifecycle to ensure goals and performance milestones are hit in a cost-effective manner.

Plan for Compliance

In response to these trends, grant-reliant organizations need to proactively prepare for compliance with a data-driven management strategy. Specifically, grantees must:

The above can be challenging without the proper technology and systems in place.

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Grant Management Software is Mission Critical

Almost half of nonprofits and public sector entities (49%) use ad-hoc systems to manage grants—spreadsheets, email and word processing documents. These tools come with inherent management and reporting challenges. Information is often decentralized among different platforms and parties, making it difficult to tie spend to specific programs and grants, and to track financials to programmatic performance. Manual input also opens the door for error.

The prevalent use of ad-hoc systems may be one of the key reasons that so many grant-reliant organizations are struggling to adapt to new federal open data requirements. Our 2017 State of Grant Management Report uncovered that: “Of those who receive federal funding, 60% believe new federal funding requirements are creating more work for their organization.”

There’s A Better Way

If grant software is used throughout the full grant ecosystem, data capture, transfer and reporting can be automated between grantor, grantee and sub-recipients, streamlining compliance.

According to the Market Guide for U.S. State and Local Grant Management Solutions report issued by Gartner, “the SaaS model for grant management will become the prevalent approach for grant administration in the coming years.” This is mainly due to the flexibility and scalability built into SaaS solutions that is lacking in on-premise alternatives, as well as the government’s “cloud-first” initiative.

As former Office of Management and Budget Controller Dave Mader told FCW, “If I were in government, I’d be saying, one of the first projects I’d be bringing to [the MGT Act] is moving to software as a service for enterprise grant systems.” In Mader’s view, too many flaws exist in current models that “bring in disparate data from disparate systems.”

SaaS grant management software centralizes financial and performance data in one online portal for easy access by key stakeholders. This has several key benefits for grant management:

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Configurable End-to-End Grant Management Solutions Outperform Custom

Though the benefits of software are well documented, not all grant management software solutions are the same. The two most common are purpose-built end-to-end systems and heavily customized solutions. Purpose-built solutions are designed specifically to manage the end-to-end grant management lifecycle and are configured to meet the needs of the organization. The alternative heavily customized solution is often constructed using customer relationship management (CRM), business process management (BPM) or enterprise resource planning (ERP) platforms. In those cases, the software was built for other business purposes first and then customized to support grant activities.

Purpose-built vs. heavily customized

As federal grant reporting requirements become more complex, it is often easier to work within tools thoughtfully designed for grant management versus customizing modules within other systems.

The main reason for this is that purpose-built solutions were created to align with DATA Act, UGG, and other federal regulations. Updates can also be pushed out to all users as new regulations are rolled out at the federal level. This ensures end-user compliance without added maintenance costs to customize their individual solutions. Customizing existing CRM, BPM or ERP platforms to remain compliant with evolving grant management requirements, on the other hand, is a major undertaking—requiring significant personnel and development resources both upfront and ongoing.

In addition, purpose-built solutions house the majority of necessary grant functionality out-of-the-box, yet are flexible enough to adapt to an organization's individual needs. Templated, pre-assembled workflows, and process best practices significantly shorten the implementation timeline without sacrificing quality and usability. An open architecture also allows for easy integration with payment processing, accounting, payroll, human resource and other software already in use at an organization.

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Purchasing Your Grant Management System

When evaluating software vendors and writing your grant software RFP, start by auditing existing grant management processes—including workflows, stakeholders, systems in use and fixed points. Also look at what functionality is required to meet federal compliance requirements. Often, organizations will get caught up in shiny, new features or what they think they need, without first assessing what’s currently in place at their organization. Use information obtained from the audit to outline your ideal future state, and the software features that will be necessary for your organization.

If it becomes apparent that requirements are sparse and gaps in the grant management lifecycle exist, Gartner conducted research that summarizes functional requirements for both grantor and grantee processes.

Next, consolidate required features and functionality, your desired implementation timeline, scoring criteria and budget details into an RFP for vendors. The more information provided upfront about grant processes and needs, the easier it will be for vendors to scope services that align.

Unsure how to structure your RFP? Our template, derived from hundreds of grant software RFPs for organizations of all sizes, offers a good starting point.

Download the RFP template to get started!