By Elizabeth Hartnett, CPA, and Ronald Matan, CPA
CPAs who want to serve as their nonprofit clients’ trusted advisors are committed to providing guidance and resources that go beyond conducting an audit or completing a Form 990. CPAs add significant value when they share ideas that enable their clients, including nonprofit leaders and volunteers, to efficiently address their greatest challenges as well as position themselves to leverage their greatest opportunities.
One area that is always at the top of the list is grant writing. Nonprofit organizations of all sizes often focus on grants. While there are many other methods for generating revenue, such as individual philanthropy, corporate donations, fundraising events and investment income, grant writing remains as an incredibly popular option.
Research and Selection
There is much to be considered when applying for a grant, from application through compliance. Before applying for a grant, every organization should research the key details. This means that the first step is to conduct meaningful research. This is necessary to identify those organizations that are most interested in funding a nonprofit with a similar philosophy and commitment. By doing this, the nonprofit can determine if their mission is aligned with the goals and unique conditions of the grantor.
After selecting the right funder, the nonprofit must take time to read the entire grant application to understand the expectations, constraints and deadlines. By doing so they will be prepared to answer the critical questions that address the grantor’s issues in a clear, concise manner. Chasing the money without being certain that the grantor is an appropriate funding source is a foolhardy decision. In fact, the more connections that exist between the vision of the funder and the nonprofit, the greater the opportunity for a positive decision.
When CPAs assist nonprofit leaders in the grant writing process, they have a range of responsibilities. This includes reminding the nonprofit that each funder has specific requirements that need to be considered. It is essential to know if the funder is seeking nonprofits within specific industry niches — for example, supporting those focused on vertical markets such as education, healthcare, families, religious organizations or the environment. It is most likely a waste of time for a nonprofit engaged in mental health services to seek funding from a grantor that only supports animal welfare associations.
Grantors offer strict guidelines regarding what information should be included in the application. Grant makers and foundations are looking for documentation that demonstrates and supports the current and future impact of the nonprofit, the future sustainability of its objectives, the strength of the leadership team, systems and infrastructure, its target audience, its demographic focus, its willingness to collaborate with other nonprofits (or for-profits) and a summary of how the funding will enable the nonprofit to continue working to achieve its purpose.
Ensuring compliance is mandatory. It falls to the CPAs to strongly remind nonprofit leaders to take their fiscal responsibilities seriously when they receive funding. If the nonprofit is awarded funds, it must uphold the promises made during the application process. In order to accomplish this, the organization must have a relevant record keeping system in place along with strong internal procedures to support a culture of compliance.
Having proper systems in place will help the nonprofit substantiate its claims that the funds are being disbursed as promised based on the budget provided, which is included to justify the numbers, at the time of the application. Since grant management can be tied to the audit, the nonprofit leaders and their CPAs must work together to provide proper oversight, tracking the use of the funds and confirming that the money is being used in accordance with the guidelines and requirements of the funder.
CPAs and others who are engaged in the grant writing process can increase the potential for success when they follow the rules and are attentive and respectful of the funders’ goals. The strategy for effective grant writing begins by limiting the initial outreach to the most suitable funders, continues with a detailed and authenticated application, is supported by the connection between the nonprofit’s mission and the funder’s mission, and must have the systems in place to ensure post-award compliance and proper spending as well.
Bridget Hartnett, CPA, PSA, is the member in charge of SobelCo’s Nonprofit and Social Services Practice.