Money Matters

Post-award grant management best practices for nonprofits

Learn the essentials of post-award grant management for nonprofits, including a detailed checklist, best practices, and strategies for grant administration.

Managing grants is essential for nonprofits to achieve their mission and expand their impact.

But it involves more than just securing the initial funding.

Once a grant is awarded, the post-award administration phase begins. This is critical period where your nonprofit must manage funds carefully, track project progress, and ensure compliance with the grant’s terms.

In this article, we highlight best practices and actionable tips for nonprofit leaders and grant managers to navigate the post-award grant management process, from budget tracking and reporting to maintaining strong funder relationships.

Key takeaways

• Post-award grant management ensures nonprofits effectively use funds, meet goals, and maintain funder trust.
• Key components include budget tracking, compliance, and organized documentation.
• A grant management checklist can keep teams organized and compliant.
• Automation simplifies tracking, reporting, and real-time performance monitoring.
• Best practices such as strong donor relationships and key performance indicator (KPI) tracking build trust and support future funding.

Here’s what we cover:

• What is post-award grant management?
• Key components of post-award grant management
• Post-award grant management checklist
• 7 best practices for effective post-award grant management
• Challenges in post-award grant management
• Final thoughts on post-award grant management
• Post-award grant management FAQs

What is post-award grant management?

Post-award grant management is all about handling the practical side of a grant once funding is awarded.

This stage is crucial for nonprofits because it’s where you:

• Bring your project to life
• Ensure the funds are used wisely
• Keep your funders happy.

When you receive a grant, specific expectations and requirements are often tied to it.

Post-award management helps you stay on track with these. It includes keeping a close eye on spending, regularly checking in on project progress, and making sure you’re meeting all the terms agreed upon by the grantor.

Effective post-award grant management requires a combination of financial oversight, project management, and a clear understanding of compliance obligations to help your nonprofit deliver impact and stay financially healthy.

Key components of post-award grant management

A successful post-award grant management process keeps your project on track and ensures transparency and accountability to funders.

Let’s take a look at the core components every nonprofit should focus on.

Budget monitoring and financial oversight

Your nonprofit needs to track every dollar to ensure each expense aligns with project goals and funder requirements.

This can be challenging, especially with complex funding structures or multiple projects happening at once.

Start by mapping out the grant budget in detail, including categories such as personnel, supplies, and administrative costs. Make sure each item aligns with the grantor’s guidelines to prevent unintentional overspending.

Often, a nonprofit CFO, grant manager or program director could be responsible to oversee the budget.

This person should:

• Regularly review expenses
• Flag discrepancies
• Provide insights into financial performance.

Periodic budget review meetings with key stakeholders are also helpful, as they can catch potential issues early and allow your team to adjust spending if needed.

Nonprofit accounting software can make budget monitoring more effective as you can see real-time data on your financial position.

This software simplifies tracking by automating expense categorization, allowing you to easily compare actual spending to the budget.

Compliance with grant terms and conditions

Nonprofits must comply with all grant terms, conditions, and guidelines, from how funds can be used to required reporting schedules and audits.

If you don’t, your organization could face penalties and clawbacks from funders.

After you’re awarded a grant, go through the agreement line by line with your team to identify any specific requirements, such as restrictions on spending categories, deadlines, or specific reporting formats.

Then, develop a post-award grant management checklist (or use ours, see below) to help you stay organized.

Outline key tasks and deadlines, such as financial reporting dates, deliverables, and auditing requirements.

Keep this checklist updated to monitor compliance status at every project stage.

Like budget monitoring, it’s useful to assign a staff member to take ownership of compliance. They can track grant conditions, coordinate with other departments, liaise with funders to address questions, and ensure all requirements are met.

Record-keeping and documentation

Records that are organized and easy to access are a key component of effective post-award grant management.

Keeping detailed documentation helps your nonprofit track progress, stay audit-ready, and provide funders with the transparency they expect.

Start by creating a well-organized folder structure for your grant-related documents.

Consider categorizing folders by:

• Financial records
• Program reports
• Funder communications
• Project milestones.

Remember to use a consistent structure that works for your team to keep everything easy to find.

You’ll be thankful you did this when auditing season arrives.

Track project activities as they occur, capturing details such as staff time, participant numbers, and any outcomes achieved. Tracking as you go makes reporting accurate progress to funders and demonstrating your impact much easier.

It’s also worth establishing a document retention policy that states how long to keep grant-related documents. Some funders require records to be retained for several years after project completion, especially if they may be audited later.

Make sure your policy aligns with both funder requirements and your organization’s practices.

Reporting and deliverables

Reporting is a fundamental aspect of post-award grant management.

Regular updates and reports are your nonprofit’s opportunity to show funders how you’re progressing and the impact of their investment.

There are multiple reporting stages throughout the post-award grant management phase.

The first document is typically the setup report, which is required during the initial few months. It confirms how funds have been allocated and outlines the project’s plan.

Then, there are interim progress reports that track progress against milestones.

They include:

• Financial summaries
• Programmatic outcomes
• Any changes in project direction.

For multi-year grants, funders may request comprehensive annual reports covering financials, outcomes, and major milestones.

Once the project is completed, you must send funders a final report detailing the project’s overall impact, a final financial accounting, and lessons learned.

Final reports are often crucial for demonstrating success and fostering future funding opportunities.

Each grantor may have unique requirements for reporting schedules, types, and content. Review the grant agreement thoroughly to determine what’s needed, including any templates or formats they provide.

Some funders, for instance, may require quarterly program reports, while others request semi-annual financial updates.  

As many of these reports are financial, grant tracking and billing software can streamline your financial tracking and simplify report preparation, including:

• Generating grant-specific financial summaries
• Tracking expenses by category
• Monitoring budget versus actuals in real time.

Post-award grant management checklist

Navigating post-award grant management is easier with a clear checklist to guide your team through each essential step.

From initial setup to project closeout, the checklist will help you stay organized and meet funder expectations throughout the grant lifecycle.

Initial steps after award notification

• Review grant documents: go through the grant agreement and any attached conditions to understand funder expectations, spending guidelines, reporting requirements, and key deadlines. Assign a team member, such as a grant manager, to take ownership of monitoring these requirements.
• Create a project plan: develop a timeline with all key project milestones, deliverables, and reporting dates. Outline roles and responsibilities, including which team members will oversee budget tracking, compliance, and reporting.
• Schedule a kickoff meeting: host an internal meeting to discuss the project plan and answer any questions from team members. Use this opportunity to clarify responsibilities, establish communication protocols, and ensure everyone understands the project goals and funder requirements.
• Clarify compliance requirements: ensure the designated compliance lead understands the specific grant terms. This individual will track compliance and coordinate with other departments as needed, liaising with funders to address questions and making sure all requirements are met.

Administrative and financial setup         

• Set up financial tracking: use a dedicated nonprofit accounting and fianancial management system to track your finances. If you’re choosing new software, consider these tips for navigating fund accounting software selection. Configure the system with grant-specific expense categories and link it to reporting functions, if possible, so budget data is accessible and up to date.
• Implement time and effort reporting: many grants require tracking time spent by staff on grant-funded activities as a key part of post-award administration. Set up a time-tracking system or policy that captures this data, and ensure team members understand how to log their hours accurately. This might involve tracking within payroll software or using time and expense management software.
• Confirm policy compliance: review your organization’s financial, procurement, and program management policies to ensure they align with the funder’s requirements. Adjust or reinforce any necessary policies to meet grant guidelines and streamline processes.
• Prepare documentation storage: organize a cloud-based system where all grant documents, such as financial records, agreements, communications, and project reports, will be stored securely.

Ongoing monitoring and reporting          

• Track budget versus actuals: schedule monthly or quarterly budget reviews with your financial planning and budgeting software to check expenses against the grant budget. Stay updated on any nonprofit grant tracking changes that might impact reporting and compliance to ensure accurate tracking. Ensure the grant manager reviews any variances and makes adjustments as needed to stay within funder guidelines.
• Monitor and document program outcomes: regularly assess and document the project’s progress toward milestones. This should include collecting data on participant reach, program impact, and other relevant metrics to support progress and impact reporting.
• Submit reports on time: use a reporting calendar to organize report deadlines, including setup, interim, and final reports. Set internal reminders for team members responsible for preparing the reports, ensuring data is accurate, and each report reflects the project’s progress.
• Provide the compliance lead with ongoing support: check in regularly with the designated compliance lead to ensure they have what they need to fulfill grant requirements, coordinate with other departments, and prepare for audits as needed.            

Grant closeout          

• Conduct a final financial review: at the end of the grant period, perform a thorough financial review to ensure all expenses align with the approved budget. Address any outstanding transactions and resolve discrepancies to ensure a smooth closeout.
• Confirm program completion: ensure all project activities and deliverables have been completed as outlined in the grant agreement. Document the project’s outcomes and impact, preparing a summary for internal records and future funder communications.
• Prepare for audits: organize all grant-related documentation, including financial records, time tracking logs, program results, and compliance reports. Having these documents in order can facilitate future audits and support transparency.
• Submit final reports: complete and submit any final financial and program reports required by the funder. The final report is often critical to securing future funding, so ensure it’s thorough, accurate, and showcases the project’s success and impact.

7 best practices for effective post-award grant management

Following post-award grant management best practices can strengthen funder relationships, increase transparency, and support your nonprofit’s long-term success.

Here are seven essential strategies to guide your team.

1. Build positive relationships with donors

Building strong, transparent relationships with grantors increases your chances of securing renewals and extensions.

Trust, accountability, and clear communication are essential.

Keep funders informed with project updates, including progress snapshots, challenges, and success stories.

Solid grant management processes, supported by nonprofit financial management software, demonstrate fiscal responsibility and make it easier for funders to continue their support.

By fostering trust and showing impact, your organization creates a strong foundation for future funding.

2. Manage restricted funds carefully

Most large grants carry restrictions, meaning your organization has specific obligations and instructions about how the grant money can be used.

Properly managing restricted funds is crucial as failure to comply can undermine trust and impact your opportunities for a grant renewal.

There are different types of restricted funds to bear in mind:

• Temporarily restricted: funds given for a specific project or purpose to be used within a certain period.
• Permanently restricted: the original amount is permanently set aside and remains untouched. Only income generated by investing these funds can be spent on specific purposes or projects according to the instructions of the donors.

Set up a dedicated tracking system to monitor the use of restricted funds, keeping them separate from unrestricted donations.  

Align your spending closely with the grant budget and review expenses regularly to confirm they comply with funder guidelines.

Accurate tracking reduces the risk of overspending and supports transparency, giving funders confidence in your financial stewardship.

3. Monitor revenue, spending, and budget

Effective grant management requires staying on top of your budget, spending, and cash flow, especially if your grant funds are reimbursed rather than paid upfront.

Familiarize yourself with the grant’s terms to ensure all expenditures qualify for reimbursement, as this will help avoid cash flow issues.

To predict financial performance accurately, maintain real-time visibility into your spending and budget-to-actual variance. This level of tracking allows you to make adjustments as needed, helping prevent overspending and ensuring there’s always sufficient funding to cover project costs.

4. Capture your costs

Accurately billing grantors requires a solid process for capturing direct and indirect costs.

Ensure expenses are marked as reimbursable within your accounting system and linked to the relevant grants.

Using tools for nonprofit revenue recognition automation reduces billing errors and helps avoid missed charges or overstated amounts.

By shortening the billing cycle, your organization can improve cash flow and maintain financial accuracy.

5. Automate grantor reporting

Grantor reporting is more than a requirement. It’s an opportunity to build relationships by showcasing your organization’s impact.

With automated financial reporting, you can easily customize reports to meet funders’ needs, offering transparency and accountability without the manual workload.

Take reporting further by using automation to highlight results through data visualizations, such as charts and graphs, and share meaningful insights, outcomes, and stories of impact.

Use this opportunity to demonstrate the difference their support is making, fostering a collaborative, mission-driven relationship with funders.

6. Track key performance indicators (KPIs)

Grantors want assurances that their funding is used effectively and supports meaningful impact.

Tracking KPIs for nonprofits provides a clear way to demonstrate your organization’s financial responsibility and program success.

KPIs can measure both financial performance and program outcomes.

Outcome metrics, for example, highlight the real-world impact of funded activities, offering critical accountability to funders. Examples might include participant reach, cost per outcome, or efficiency improvements.

With the right nonprofit accounting software, tracking KPIs can be seamless, giving your team real-time insights through automated dashboards and simplifying the reporting process.

7. Build confidence with a clean audit

Many grantors require audits. And even those who don’t appreciate seeing one.

A clean audit gives funders confidence in your organization’s ethics, financial management, and stewardship.

A well-organized, automated accounting system makes audits simpler and more efficient. A centralized financial management system allows you to quickly access reports and provide auditors with the necessary information, saving time and potentially lowering audit costs.

Demonstrating this level of transparency strengthens trust with current and prospective funders.

Challenges in post-award grant management

Managing a grant post-award comes with several challenges that nonprofits must navigate to ensure success:

• Navigating complex compliance requirements: each grant has its own set of rules and reporting needs, which can feel overwhelming when managing multiple grants. Missing a compliance requirement can jeopardize future funding, so keeping everything organized and up to date is important.
• Managing budget and cash flow: many grants only reimburse expenses after they’re incurred, which can create cash flow issues if funds aren’t carefully managed. Staying on top of your budget and spending is key to ensuring you don’t run into funding gaps.
• Tracking and reporting data: collecting and organizing the right data for funders can be time-consuming. Many grants require specific metrics. Without a clear process, it’s easy for reports to get delayed or contain errors, which can affect funder relationships.
• Working with limited resources: many nonprofits face resource constraints, making it difficult to dedicate the time needed for compliance, reporting, and budget tracking. Balancing these tasks with daily program responsibilities can strain teams and lead to missed requirements.

Often, growing organizations need a nonprofit accounting and grant management software such as Sage Intacct to tackle the challenges of financial complexities and achieve the best level of accuracy.

Vitamin Angels, for example, is a nonprofit that uses Sage Intacct to boost its financial management.

With Sage, the organisation:

• Unlocked $14 million in restricted funds over three years
• Gained 60% improvement in accounts payable efficiency
• Freed $200,000 in logistic costs for programs.

This demonstrates how the right software can transform financial management, driving efficiency and creating new opportunities for growth and impact.

Final thoughts on post-award grant management

The post-award grant management is an important part of the funding process. 

You need to ensure that you’re managing funds in the right way and tracking your projects, while also  meeting the requirements of the grant.

Using the checklist above and following the best practice steps we’ve highlighted will help you stay on the right track.

And using nonprofit accounting and grant management software can help you save time and work effectively.

Post-award grant management FAQs

How can nonprofits streamline their grant management process?

Nonprofits can simplify grant management by using dedicated software to automate budgeting, reporting, and compliance tracking.

Establishing clear roles, using checklists, and setting regular progress reviews can also keep teams organized and reduce administrative load.

What is the role of financial audits in post-award grant management?

Financial audits help ensure that grant funds are used correctly and in line with funder requirements.

A clean audit opinion provides funders with assurance of responsible financial management, supports transparency, and can improve the likelihood of future funding.

How can nonprofits monitor grant performance in real time?

Real-time monitoring is possible with nonprofit accounting and grant management software, which can track expenses, outcomes, and nonprofit KPIs as they happen.

Dashboards and automated reporting make it easy to view progress, allowing nonprofits to identify issues and make adjustments quickly.