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Most nonprofits rely on grant funding to support their programs and services. In fact, 46 percent report that grants make up more than a quarter of their funding.
Given how critical grants are for many nonprofits, having good systems in place to manage the grant-writing process from beginning to end is incredibly important. Yet 75 percent of nonprofits use simple spreadsheets to manage what can amount to millions of dollars of grant funds.
While some nonprofits may think that the systems they've pieced together are working well enough, there is a significant cost to inefficient grants management — up to 13 cents for every grant dollar, according to the Center for Effective Philanthropy.
Here are five reasons that friends should not let friends use spreadsheets to manage grants:
The grant lifecycle involves researching and finding new grant opportunities, cultivating relationships with potential funders, writing compelling grant proposals to targeted grantmakers, and more. Spreadsheets are simply not designed to manage that whole process.
Most nonprofits that use Excel to manage their grants also use Word and Outlook (or Google Calendar) as well, making it necessary to check and update three separate tools, and leaving a lot of room for error. With an online grants management system, everything from the initial research to the final progress report can be managed in one centralized location.
Although Excel can be used to track deadlines (Excel handles dates quite well), that information is only useful if you happen to look at the spreadsheet at the right time before a deadline. Many nonprofits will track deadlines in a grants spreadsheet, then copy those deadlines to Outlook or Google Calendar as well.
Not only does that double the effort involved in managing deadlines, it also doesn't take advantage of a straightforward feature in online grants management software — reminders. Your organization's deadlines can be added to the software, which will send automatic email reminders prior to due dates.
There's more to managing funder relationships than just tracking contact information. If you have a conversation with a funder about a grant program or proposal, where are those notes stored in Excel? Do you add a column each time you interact with a funder in order to keep notes separate? What if you have 10 interactions with one funder and only 2 with another?
How easy is it to find the relevant notes quickly? How many extra columns end up getting added to the spreadsheet? And how do you share this information with other people in your organization so that efforts are not duplicated and not lost when someone leaves the organization?
The more grants your organization pursues and gets, the bigger and more unwieldy the spreadsheet becomes. I've seen grant spreadsheets that are color-coded, split into multiple different sheets, organized with acronyms, and a number of other creative (and unsustainable) ways to manage growing grant programs.
The dilemma is that organizations want their grant programs to grow. But as the program grows, the spreadsheet becomes increasingly unmanageable — and it's at precisely that point that you need to be able to have quick and easy access to the exact information that you need at a given moment. That's where online grants management software comes in. You can easily sort proposals, grants, and so on to get to exactly the information you need, when you need it, without sacrificing the depth or completeness of information about each funder, grant, and proposal.
Some people are Excel wizards. They can create spreadsheets that do things that seem impossible. They know all the shortcuts and can massage data in whatever way they want, whenever they want to. If you have one of those folks on staff, that's great for getting a robust tracking spreadsheet set up. But what happens if that individual leaves the organization? Will anyone else know how to find relevant information and keep the complex spreadsheet updated?
With online grants management software, the organization's complete grantseeking history is stored in an organized, easy-to-access and easy-to-use online location. If the development director leaves, her or his successor can easily pick up the mantle and see the whole history, which reports are due when, and what information was submitted in each proposal. And all of that information is available at a couple of button clicks rather than by poring through tons of documents and files, linked through a complex spreadsheet.
A much better option: Eligible nonprofits can request discounted access to PhilanTrack grants management software through TechSoup.
A version of this post originally appeared on the Rants About Grants blog.
Dahna Goldstein is director of philanthropy solutions at Altum, which offers PhilanTrack software to grantseekers and grantmakers.
Image: bleakstar / Shutterstock
I think point #4 is the heart of this blog. Most nonprofits are tiny, and don't have that many grants to manage - spreadsheets are just fine for their management of such data. But, indeed, the more grants a nonprofit pursues, and the more grants a nonprofit receives - particularly grants that require regularly reporting - the more they might want to consider budgeting for a database solution.
Great point. In speaking to Robert Weiner, our nonprofit database software expert, we're considering going back to a specific branch just on this topic. Thanks for the feedback.