The Impact Issue #57: How To Conduct Impactful Audits

Happy Tax Day! 

We know nonprofits have different filing requirements, but while you’re in the tax mindset, it’s a great time to consider conducting an audit. In this week’s edition, we’ll prove audits don’t have to be scary by guiding you through the process with expert tips, resources, templates, and more.

Welcome to The Impact.

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Pitfalls and Pointers

⚠️ Pitfall: Skipping Financial Audits Unless Required

If you’re not applying to grants that require audits, it can be easy to skip over them. You’re confident you know where your money is going, so you don’t want to waste time reviewing financials when there’s more important work to be done. 

Unfortunately, not conducting regular audits can lead to disastrous consequences, including misspent funds and a lack of grant compliance. This could reduce your credibility, cause you to miss out on funding opportunities, and potentially even lose your nonprofit status.

💡 Pointer: Schedule Regular Audits to Promote Financial Transparency

Regular financial audits to review your revenue and spending can help ensure your resources are being properly allocated. Unless required, you can conduct these internally, without spending a lot of money. 

Here’s how: 

• Look at your funding strategy to identify the ideal time for an audit. This could be after grant cycles to capture project spend, at the end of the fiscal year, or during downtimes to help with workload.
• Identify what you need to audit. This can include bank accounts, program spending, payroll, donations, and more.
• Engage with internal partners to lead your audit. Work with your colleagues to gather resources, engaging with project or functional leads. You do not need to compile all the resources by yourself.
• Set a deadline. While these are self-imposed, being clear on deadlines can help you complete your financial audit in a timely manner and address any concerns promptly.
• Review the resources. Reconcile the funds that are being spent and compare the expenses with the budget to identify any discrepancies. Take note of anything that seems abnormal to dig in deeper.
• Implement changes. You may uncover adjustments you need to make within your organization following your audit. Be sure to implement the changes and check in throughout the year to ensure they are being properly executed.

👉 Check out this step-by-step guide on how to audit small nonprofits!

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Tech You Should Know

What:

The Nonprofit Audit Guide is a checklist by the National Council of Nonprofits to help organizations prepare for and navigate the audit process. This is helpful whether you are conducting your own internal audit or engaging with external partners.

How Grant Writers Can Use It:

• Understand what documentation is needed for an audit. The guide outlines what documentation you should have available, including tax returns, receipts, invoices, and more.
• Create a centralized location for documentation. Once you pull together the information, keep it in a centralized location. Long after the audit is done, you can use it to help create a budget for grant applications.
• Inform your grant strategy. Your audit can inform your grant strategy, providing you with insight into areas you need more funding in, places you can reallocate resources, and more.

⭐ Review the Nonprofit Audit Guide to get a jump start on the audit process!

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Expert Perspectives

🏆 Rachel Werner and Patrice Davice on Federal Funding Changes

The federal funding landscape is shifting, with policies constantly changing how funding will be awarded and distributed to eligible nonprofits. 

Two federal grant and compliance experts—Rachel Werner, owner and CEO of RBW Strategy and Principal at MyFedTrainer, and Patrice Davis, founder of Grants Works and Grants Works Academy—offer guidance on how to weather the storm.

Here’s their expert advice:

• Assess your funding streams. If you rely significantly on federal grants, develop a contingency plan. Plan to explore other funding sources, including private and corporate grants.
• Review your compliance documentation. Some agencies have updated their indirect cost rates, so you need to understand if you are in compliance. If not, make the necessary adjustments to bring your nonprofit in line.
• Review funding priorities. Identify if there are any ways that you can align your funding priorities with the administration’s focus areas. For example, workforce management and infrastructure projects are less likely to experience funding delays or reductions than other areas.

🚨 Discover more about the federal funding landscape changes!

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Have You Seen This?

The Urban Institute recently released a report exploring “What Is the Financial Risk of Nonprofits Losing Government Grants?” 

Based on the most recent 990 filings, this report provides a state-by-state breakdown of the percentage of nonprofits that receive federal funding—and the accompanying risks should they lose it. Additionally, you can also drill down on a country, congressional district, size, and subsector level to see how you—and your state—may be impacted.

👉 Read on to dive deeper into the federal financial risks!

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Opportunities Spotlight

✨ Gupta Family Foundation Grant

Who It’s For: Nonprofits focused on empowering people and communities to become more self-reliant 

Next Deadline: August 31, 2025

Grant Amount: $5,000-$250,000

The Details:

• The Gupta Family Foundation strives to help everyone achieve their full potential through impactful community programming. It funds programs focused on intervention in the lives of disadvantaged people, including poverty, disability, and more. 

👉 Apply Here!

⚖️ JustPax Fund Grant

Who It’s For: Nonprofits focused on championing justice

Next Deadline: August 1, 2025

Grant Amount: Up to $25,000

The Details:

• The JustPax Fund grant focuses on nonprofits who want to affect change, championing gender justice, environmental justice, and/or economic justice through their programming. They place an emphasis on nonprofits with an innovative or novel approach to these challenges. 

👉 Apply Here!

🔍 That’s just the start—explore even more grant opportunities today!

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Networking Nook

💻 Webinar:  How to Fund Your Faith-Based Mission

April 17 | 1:00 p.m. CT

You may think your organization’s religious identity is a barrier to grant funding.

The truth? It can be one of your greatest assets—if you know where to look and how to position your mission.

Join grant writing expert Danette Fettig Halloran for a practical, results-driven session on strengthening grant programs for faith-based organizations. You’ll walk away knowing how to: 

• Find funders that support faith-based initiatives (even when they don’t explicitly say so)
• Use "Mission Mapping" to visually connect your work to funders’ priorities
• Strategically frame your proposals to emphasize impact beyond faith

Don’t Miss Out

✅ Register Now!

📅 Conference: GrantSummit 2025

October 29 - November 1 | Baltimore, MD or Virtual

Join your grant professional peers at this annual summit, where you’ll learn more about how you can fuel your grant success. This summit is appropriate for grant professionals of all levels and offers various workshops and masterclasses you can sign up for.

Hurry!

✅ Register Now!

To check out more recent and upcoming live events, go here.

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In Case You Missed It

📑 Article: 7 Best Practices to Master Nonprofit Financial Management

Financial management isn’t just for your finance team. Instead, learn more about how you can help do your part with these seven best practices to keep your nonprofit on track and avoid costly mistakes.

👉 Get the Full Story!

📼 Video: 3 Tips to Streamline Grant Document Management

Gone are the days spending hours trying to locate documentation! Learn how to better manage your grant documents with these three easy tips. 

👉 Watch a Quick Demo!

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Chart the Path to Financial Compliance 

Everyone plays a role in maintaining the financial health of their organization. Whether you’re looking to drive grant compliance or simply ensure your financials are in line, you can make a difference.

Instrumentl can help you keep your documents organized, understand grant requirements, pull reports, and so much more. We make the entire end-to-end grant management process easy.

✅ Try Instrumentl free for 14 days today to transform your workflow!