The ping of an email notification comes across your screen. You drop whatever you’re doing. You’ve been waiting for this email for weeks.
Quickly scanning the email, the excitement in you wells up. You did it!
Yes. You got the grant.
You invested the time, showed the diligence, pursued the follow-ups—it paid off.
But, the excitement is quickly replaced by dread. How are you going to make sure it’s spent correctly?
A Tale of Two Departments: Finance and Development
In too many nonprofit organizations today, there are high siloes between finance and grant teams.
Finance teams have different goals, different systems and ways of doing things. There are often communication barriers which leads to a lack of transparency and very little joint planning.
This has serious consequences.
Matt Hugg, the founder of Nonprofit.Courses, offers training for nonprofit professionals.
When telling us about how he advises nonprofits to manage their grant budgets, he highlighted a major mistake for grant teams.
After nonprofits collect the award funding, too many teams get to work without setting clear expectations for how the money will be spent.
He shares that for grant teams, the biggest challenge is getting accurate spending information from those tasked with running the funded program:
“In their enthusiasm for running the program, they misunderstand the parameters of the grant, don't bother keeping receipts, and forget about reporting deadlines. Often, they don't have the relationship with the funder that the grant writer or executive director does, so they don't connect the need for good record-keeping with a person who wants it.”
Misspending awarded funds can lead to:
- Having to return the unspent funds to the funder.
- Damage to your organization's reputation.
- Jeopardizing future funding opportunities.
- Legal issues or audits.
- Finger-pointing internally, mistrust, and conflict among teams in managing finances and program delivery.
All this leads to inefficiencies and undermines program delivery.
In Search of a Better Way To Track Grant Expenses
In a climate like this, how do grant managers like you make sure grants are spent the way they’re supposed to? More specifically:
- How do you map expenses back to the budget summary?
- How do you manage multiple grants, avoiding 'double dipping' – charging the same expense to multiple grants?
You may stoically roll up your sleeves and track everything manually. It’s not perfect, but at least this way, you’ll know it’s done right.
You’ll email accounting back and forth, getting a list of any and every expense and matching that with the different proposal budgets.
But manually checking every expense keeps you tied to your desk, eating away at time for your other responsibilities—not to mention missed dinners, family time, and genuine rest.
Nonprofits that rely on manually tracking expenses suffer from cumbersome data entry that’s prone to error. This is inefficient and will inevitably lead to inaccurate financial reporting.
Jeannette Archer-Simons is the National Development Director for Health360, a nonprofit promoting health equity in underserved communities.
She emphasizes that reporting is too often overlooked. Despite its importance, many nonprofits don’t proactively collect expenses for reports.
“Often, a nonprofit is so excited about receiving a grant or funding that they just start running. When the funding is accepted, take a breath. Look at what the reporting requirements are. Have a quick sit down or virtual meeting to outline who will be responsible for what elements of reporting and set the deadline for receiving the information.”
Likewise, the lack of real-time data exacerbates the problem, leaving you and your team in the dark about your organization’s financial status.
If you’re strapped to your desk working late to manually check expenses, you’ll know there needs to be a better solution.
At Instrumentl, we’ve spent years building tools to help grant teams find grants faster, collaborate more efficiently, and ultimately–secure more funding.
Over time we kept hearing from grant professionals across the U.S. about their challenges managing awarded grants.
Instrumentl’s Lead Product Designer, Hope, has led many customer interviews. She echoed the challenges nonprofits faced,
“When chatting with customers, they’d tell me again and again that they lacked a unified grant financial tracking tool. They had to create spreadsheets to keep track of everything. But they described it as chaotic. It delayed reporting and hindered their ability to monitor spending effectively.”
We couldn’t ignore the problem.
So, we set out to create a way to successfully track real-time expenditures against budgeted amounts in our customers’ grant summaries.
After hours of interviews, team meetings, and development, we’re excited to release Spenddown Tracking.
Spenddown Tracking lets you track expenses in real-time. With access, your accounting team can upload expenses directly into Instrumentl.
Hope shares,
“We're building the capability to effectively track the spenddown of all grants, providing an easy way for grant teams (and the broader organization) to monitor whether actual expenditures are consistent with the planned budget.”
With Instrumentl’s Spenddown Tracking, you’ll get a high-level view of your spending across all your grants.
At any time and at a glance, you can see how you’re trending.
You’ll also be able to go deeper. Maybe you want to see how much of each grant is spent and if you’re moving faster or slower than expected.
This will make it easier to spot early on if you’re going over budget.
With your grant summary in hand, you can also create spending goals for each category. This gives you a clear view of how your program teams are using each grant budget.
With always up-to-date spending, you can keep funders informed.
Matt Hugg says it's critical to keep funders in the loop early. If your spending is higher than expected, you don’t want to ask for more money out of the blue.
On this point, Matt said,
“Not keeping up a line of communication with the funder about how the money is spent, and whether it is consistent with what you predicted in your proposal is a big mistake. Funders will be understanding of changes, IF you keep them informed about why they need to occur.”
Lastly, when you use Spenddown Tracking, you can zoom in and out. Get a high level of all grant spending, but dig into each line item for each category to make sure that there are no red flags.
It’s all there and clearly identified within Instrumentl.
The Spenddown feature streamlines communication between Finance and Program teams, enhancing efficiency and reducing errors.
Now, you and your teammates can navigate grant management confidently.
Get Started With The Future of Grant Financial Management
Too often, nonprofits rely on outdated methods to track their expenses and align with the finance teams.
Now, there’s a better way.
Thousands of nonprofits have started tracking their finances in a single platform, in the same place where you and your team already collaborate on grant work.
Join them by getting started with an Instrumentl free trial. It’s free for 14 days. No credit card required.
As Hamna Khuld, Grant Writer at Oasis, a New Jersey-based nonprofit that helps women and children in poverty, says,
“I tried other grant tools, but there wasn’t really anything that kept me going. With Instrumentl, I’m able to take a deeper dive into the data. That makes a huge difference for us as an organization and makes my work much easier.”
Experience the future of grant financial management with Instrumentl’s Spenddown Tracking.
