Common Challenges and Pitfalls in Grant Management

If you’ve ever found yourself overwhelmed by the complexities of grant management, know that you are not alone. Many nonprofits struggle with the same grant management challenges when trying to secure funding for their organizations.

This article will provide you with a helpful guide for overcoming these common challenges and pitfalls encountered in grant management.

Keep reading to get practical solutions that you can begin implementing into your fundraising strategy today!

Let’s begin by going over the ten most common grant management challenges nonprofits typically face and solutions to overcome them.

Competition for Grants

It is easy to be sucked into the insular world of your nonprofit, and sometimes it’s only when you start looking for grants that you realize how crowded the field you’re playing in truly is.

Competition for grants is one of the top challenges nonprofits face when trying to raise money for their missions. However, while it is true all of you are vying for limited funding, there are ways in which even the smallest nonprofits can stand out.

Solution: Grant discovery platforms such as Instrumentl can help you find grant funders that align closely with your mission and funding needs—increasing your chances of success. And for tips on how to make your organization stand out in your proposals, check out this webinar we hosted with Margit Brazda Poirier.

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Grant Cycle Timing

Applying for grants takes time. It isn’t uncommon for nonprofits to struggle with aligning their already busy fundraising efforts with grant cycles. And while having a good team can certainly be helpful, trying to get everyone on the same page can further complicate this common obstacle in grant funding.

Solution: Breaking down your grant application timeline ahead of time and outlining your tasks can help you overcome this grant management problem. From initial prospect research to post award management, by splitting everything into its most basic steps and laying it out in a detailed grant calendar you can better equip yourself and your team for success.

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To learn more about optimizing team collaboration within the grant cycle, check out this post on our blog.

Diversifying Funding Sources

Relying too heavily on a single funding source can be risky. After all, what would happen to your nonprofit should one of those streams temporarily dry up?

Solution: Nonprofits can pursue different kinds of fundraising streams, such as crowdfunding, sponsorships, or even different types of grants. Diversifying fundraising strategies allows for healthier, long-term sustainability.

Strategic Alignment

One of the most common grant management problems you might encounter relates to aligning your project with the funder’s strategic goals and mission. It can be challenging to determine whether your proposed project fits within a funder’s giving priorities.

Solution: To ensure a funder is the right match for your nonprofit, make sure to do extensive research. Look beyond their stated goals and see what kind of projects they’ve funded in the past, where they’ve awarded grants geographically, and more.

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Instrumentl offers helpful 990 insights for thousands of funders, saving you time and allowing you to better vet which grants are a best match for you.

Capacity Constraints

Perhaps one of the biggest issues in managing grants relates to capacity constraints. Small or emerging nonprofits might lack the staff and expertise needed for effective grant management.

Solution: If you’ve ever found yourself in this position, hiring a grant consultant might be something worth considering, as well as investing in grant management software. We’ve put together a list of eight grant consulting firms and a grant management platform comparison guide that can help you see if these options are right for you and your nonprofit.

Grant Compliance Monitoring

Ensuring that your staff and partners adhere to grant compliance requirements can be a significant challenge. This is especially true when it comes to larger or more complex projects, or for more well-established funders who have strict reporting requirements.

Solution: Make sure everyone on your team is well aware of all of the requirements they must follow and who is responsible for what. Setting up your own protocols ahead of time can also expedite and facilitate the process. For more tips on how to maintain grant compliance after funding, check out this post on our blog.

Grant Writer Turnover

A change in staff is always a cause for disruption. In terms of grant management, turnover or changes in grant writing staff can lead to a myriad of difficulties in grant administration, impacting your organization’s chances of securing funding.

Solution: Just as you do not want to be reliant on only one form of income, you do not want one person to be responsible for an entire part of your fundraising strategy. With the right collaboration tools, your whole team can have access to your entire grant management process. It’s also important to ensure everyone on your staff is receiving proper training so that they feel supported and are less likely to be overwhelmed.

Maintaining Donor Relationships

As if managing grants wasn’t complicated enough, it is also important for nonprofits to cultivate and maintain relationships with individual donors, major donors, and other funding sources if they want to thrive.

Solution: Developing a strategic stewardship program can help you better communicate and maintain relationships with your donors. You can also check out this guide for donor cultivation tips and best practices.

Managing Expectations

Managing expectations can be one of the most difficult grant management challenges you’ll encounter. The harsh reality is that it’s almost impossible to win every grant you apply for. While the rejection will hurt, it is important to not let it defeat you, and to have a plan in place for when it happens.

Solution: If possible, try to turn each grant rejection into a learning opportunity. If possible, ask the funder for feedback. Any useful advice they provide can be implemented into your future applications, increasing your chances of winning other grants.

Sustainability Planning

The last grant management challenge we’ll discuss comes after the grant period ends.

Developing a sustainability strategy is often a neglected aspect of grant management. However, it’s important to have a plan in place for sustaining your funded projects and programs for years to come.

Solution: The key to sustainability lies in having a long-term plan and vision in place. While creating your nonprofit business plan, you should always be considering how your current resources can be of use in the months and years to come—even after grant funding has ended.

Now that we’ve explored ten of the most common grant management obstacles you might face, it’s time to share best practices you can adopt to avoid these pitfalls.

Having Effective Grant Management Systems in Place

Setting up an effective grant management system is the best way to avoid most—if not all—of these common obstacles.

An effective grant management system should provide a blueprint for you and your team to follow whenever you are applying for funding.

For example, Instrumentl’s grant tracker feature makes it easy to see which stage your different grants are in, what tasks still need to be completed, when they are due, and more.

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For more tips on how to optimize your grant management efforts, check out this webinar we hosted with Teresa Huff.

Effectively Managing Your Team

Managing grants well requires effective collaboration.

When working with your team, it is important that everyone stays on the same page and is aware of their own duties and deadlines.

Thankfully, grant management tools like Instrumentl were designed with collaboration in mind. Within Instrumentl’s platform, your entire team can have access to a shared grants calendar, document library, tracking system, and more.

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Make sure to also foster an environment where anyone on your team would feel comfortable asking questions or sharing their opinions on what could be improved. Make them feel like they are not only valued, but respected and are a key part of your organization’s fundraising success.

Managing Upwards to Maintain Trust and Transparency

Finally, going along with the two points above, another way you can overcome obstacles in grant management is by managing upwards to maintain trust and transparency.

As culture amp explains, managing upwards is all about being proactive in your work. Whether with your Board of Directors or grant funders, you should be open about any challenges you foresee or obstacles you might face so that you can proactively overcome them together.

Grants are a great avenue for raising funds for your nonprofits. With that being said, they can be intimidating, and there are many challenges you might face along the way.

By applying the strategies and solutions we shared, you should be well prepared for the long and rewarding journey ahead. And don’t forget to sign up for Instrumentl free for 14 days to try out its grant management tools yourself.