Making Grant Management Practical

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Making Grant Management Practical with Grant and Contract Management Expert Ansley Fender

Grant management costs an average of 20% of grant funding, which means that a pretty significant amount of funding is going to overhead rather than programs and services. A lot of nonprofits end up having to hire more people just to manage their grants, which further cuts into the funding. This is crazy considering how much of a public good nonprofits provide to society. COVID, for example, highlighted the fact that when the private sector is shutting down and the public sector can’t move fast enough, the nonprofit sector steps it up. Because grant management software like Blackbaud is so expensive, a lot of grant managers have tried to force accounting software like Quickbooks to do grant management, which it was never intended to do. The result is messy books that are moderately ok for grant management but terrible for internal and Board management. The other option is spreadsheets, which require so much additional work and are shockingly easy to break. Atlas’ mission is to support the mission of grant-funded and grant-seeking nonprofits by streamlining and automating their grant management so they can recapture the 20% lost to traditional grant management. We exist because they do.

Ansley Fender

Ansley Fender

Ansley Fender’s entrepreneurial journey began when she was pregnant with her second child. Despite being at a critical juncture in her life, she took a leap of faith and quit her job to start her own business. The concept for Atlas was born while Ansley was doing bookkeeping for nonprofits. She saw that as much as 30% of grant funding was going into administrative costs. Not only that, but the assistants handling those duties were being overworked. Atlas’ software helps lighten the load by scouring databases to match funders with funding recipients. On the days that being a startup founder is especially difficult, Ansley gets inspiration from her two fearless little girls.

More about Ansley’s work at https://www.getatlassolutions.com/

 

 

 

 

Read the Interview Transcript

Hugh Ballou: Greetings, everyone. This is Hugh Ballou with The Nonprofit Exchange. For seven years, we have been interviewing interesting people that are very qualified to tell a story, to tell you about their expertise, and to share some sound business principles that we in the for-purpose industry—it’s not for-profit, it’s for purpose. We have to generate revenue to do our work. It’s important to install systems into our organization so we can be more effective and more efficient, so more of the bottom-line revenue goes to the impact that we want to create. The love of humankind, philanthropy, is what we’re all about.

We have a special guest today, Ansley Fender. We are going to talk about how to track grants. Sit down, get your notepad, put your seatbelt on. We’re going to have a good time. Ansley, welcome to The Nonprofit Exchange. Tell people a little bit about you.

Ansley Fender: Thanks so much for having me. I have a very interesting and varied background. I spent most of my early life in the arts and in arts nonprofits. I got really used to, “Hey, we’re going to do a fundraiser, and you’re going to be performing.” How it ran internally and how money was raised through donations and grants.

I went to college for music, and it didn’t work out for a number of reasons, from injury to it being super stressful. I decided to switch my major to nonprofit management, thinking that would be less stressful. Totally not. I then went on to do a master’s in public finance. Basically, I had no idea what I wanted to do, but I knew I enjoyed finance and nonprofits.

In the middle of grad school, I ended up having my oldest child and staying home with her for a while. Through happenstance, I ended up doing bookkeeping and financial consulting for nonprofits in my hometown. It really quickly exploded because I didn’t realize there was this huge gap in financial services for the nonprofit industry: CPAs, grant managers, all these other financial professionals were really geared toward the for-profit industry, which is completely different.

In a couple years, I had become an accidental entrepreneur and had this business going. That put me in front of a ton of grants. I knew this industry existed, but I didn’t really know what it was all about. Coming from a more for-profit, municipal finance background, I had a preconceived idea of how this funding was going to be managed. I was very shocked that it was like just spreadsheets and manual. This was maybe seven years ago. I started looking for ways to make it easier. There had to be a way to make it less expensive, faster, and there really wasn’t.

One night, I was fed up with it. I said I’m going to build software. That’s probably not hard. It is. I basically took everything I had learned and the clients I had and other people I had listened to talking about how difficult grant management is and built software based on their specifications. That’s how we got to here.

Hugh: That is a great story. There are many gaps in our industry. When I was in graduate school for conducting, I stayed with music even though I realized it wasn’t going to be financially beneficial. But I did have a business and music at the same time. Half of my lab chorus for choral conducting were computer programmers. I said, “This doesn’t make sense.” They said, “Sure it does. We have an unforgiving system, very mathematical, very precise. You have to be creative without violating that system.” That’s the right/left brain. Our methodology in SynerVision is you have to have a system in order to be creative. That is the container for your creativity.

This whole world of grant writing is a mystery: how to get grants, how to be attractive to grant makers, how to track it. There is a lot of moving parts here. We must have some discipline with finance. Many nonprofit leaders think money is a dirty word when we really need to put gas in this car so it runs.

Talk a little bit about grant management. You get a grant, and then there is a reporting requirement for that grant. That is sometimes very difficult, but you’re trying to make it more manageable. Talk about that process and how we spend so much time and money doing that part to report because that is mandatory.

Ansley: Grants are very similar and very varied. Typically, it’s money with a contract attached to it, even from a very high government level down to the smallest community foundation grant, which is nice. At least you know what you’re getting yourself into.

The problem comes in with the nuance of the requirements. There are about $3 trillion of grants going out every year. You can get everything from, “Let me know what happened when you spent our $5,000,” up to, “You need to report every month in order to get a reimbursement for funds already spent.”

Regardless of what the reporting cadence is, you have to keep track of what you did with the money. You have to compare it typically to the budget that you set out in your grant proposal. They want to know that you had an idea for how you’re going to use this money, and you weren’t making it up on the fly. You actually did what you said you were going to do. Or if you had to do something different, why. In the case of COVID, lots of people had to use their grant funds very differently. Those grantors weren’t taking the money back. “If you still want to use this, that’s fine. You just need to do it toward your mission, and you have to tell us what you did. How did you pivot?”

All of this grant money is either tax money, taxpayer dollars, or it’s philanthropic dollars. People want to know that you are the best place to put their money because they have to report to someone else, too. If it’s from a municipality or the federal government, they’re reporting to the taxpayers. If it’s from a community foundation or a business with a philanthropic arm, they are reporting to the people who gave them that money. They’re just trying to make sure that everything is on the up-and-up.

Hugh: It occurs to me that that ought to be the stewardship that is embedded in all of our finance, isn’t it?

Ansley: Should be.

Hugh: We’re stewards of other people’s money. What it’s all about is the impact, the results. If you go from impact forward, that’s what attracts the dollars, isn’t it?

Ansley: That’s where nonprofit leaders think of money as a bad thing. They think of it through this very for-profit lens of we’re trying to maximize something or minimize something else. That’s really not what you’re trying to do in a nonprofit obviously. You’re trying to prove impact. You’re not maximizing or minimizing widgets or profit. You are maximizing your potential to achieve your mission. How are you doing that? Money is just the tool you’re using to help the people that you help. It shouldn’t feel like accounting-ish, or like you’re a CPA. You’re just proving what you did. As long as you can tell a story, you can get grant funding.

Hugh: Really?

Ansley: I mean, in a perfect world, sure.

Hugh: It’s pretty competitive. Even though there is a lot of money given away, there is money that is not given away. I have a lot of questions here. Let’s go the reverse part of this. If you’ve got a system in place, and I want to talk about the specifics of the system in a minute, you have a system of accountability in place. Does that make you more attractive to a funder?

Ansley: Absolutely. It depends on the system that you have in place. If you think about who’s giving you money, this is where you really have to put yourself in their shoes. If you’re asking for money from a government entity, think about how much bureaucracy and red tape they are dealing with. You need to appeal to that. That’s hard to do. If you’re trying to get it from a community foundation, they are typically a little bit more lax on the bureaucratic side if they are smaller. They may not care quite as much.

Really, they want to see that you have checks and balances in place. If the person entering the information into your accounting system is also auditing you, also writing your grant funds, also taking money to the bank to be deposited? That is scary. That is where you’re setting yourself up for someone to do something that is illegal or just unethical. They want to see that you have a division of financial labor, there are checks and balances in place, and you are going to be a good steward of the money that they gave you.

Hugh: Especially for philanthropists, they’ve really worked hard to earn that money. They’ve learned how to attract it. It’s important to them. When they reassign that money to you, they want to know that you’ve got that discipline in place. It costs money to administer grants. We normally write that cost into the grant, the part of reporting, the administrative part. It occurs to me that we could do better. What are some ways we could do better? We try to do all of the reporting through a spreadsheet or QuickBooks. What are ways we could do better there?

Ansley: A lot. Right now, it costs about 20% of grant funding to just administer the grant, which is a lot. It’s so manual. I’ve done it so many different ways. I’ve done it through spreadsheet, QuickBooks, etc. You just want to make sure you are automating as much as possible.

I wouldn’t start with a spreadsheet. I would start with your accounting software and take things out of there and dump it into a spreadsheet. If you know how to use some IF function and other Excel functions, that’s your best friend. The problem you get into in a spreadsheet is that there is so much potential for human error that you have entered into the equation. That is where the time-consuming part comes in. You’re having to check yourself so many times.

From the QuickBooks side, there is so many different ways you can do grant management. I have tried to invent different ways for clients. I’d say the least successful way is building it into your chart of accounts. Having a separate income account for every grant and separate expense accounts for each grant. You’re just making your profit & loss statement or your statement of income look massive.

Your board has to understand what’s going on, too. So do your donors. If they can’t understand it, you’re hurting yourself in other ways. The easiest way is with classes and sub-classes. Have a main class for the grant. You can then have sub-classes for the grant budget line items. For a number of reasons, it’s not super sustainable to do it that way either though.

The hard part with doing this with accounting software or a spreadsheet is that you’re trying to make the IRS happy and your donors happy and yourself happy and the grant funders happy and your board happy. You cannot make them all happy by altering your accounting system. That’s where the time-consuming part comes in.  

Hugh: There is an integrity to your accounting software that is important. You did point out some of the deficits where there is not compliance on who requests the check and who writes the check and who deposits the money. We really need some systems in place where there is integrity in that.

Also, having interfaced with many boards, there are many boards that don’t understand the financials. We really need to keep it as accurate and straightforward as possible so that they can do their job of approving our financials.

You got to a place where you knew you needed something better. When we go to your website, GetAtlasSolutions.com, what will we see? What is the benefit of having a separate software to do this?

Ansley: You’ll get a high-level overview of what this software does with some screenshots. We will actually be rolling out a new website pretty soon that will have a lot more in-depth information.

But the reason that I finally came to the conclusion that a separate piece of software was needed was exactly what you were just saying: the integrity of your books. Finances have to be done a certain way for the IRS to be happy, especially when you’re trying to prove to them that you should be able to maintain your exempt status as a nonprofit. But the way the IRS wants to see your finances is not necessarily the best way for you to see your finances or for your grant funders to see your finances. Being able to take financial information out of your accounting software and manipulate it differently is really what needs to happen. That’s what so many organizations are doing with spreadsheets and things right now; it just creates so much extra time.

Essentially, what we did is sit down with a bunch of organizations and ask, “What do you have to do for your grants?” We talked to grant funders as well. “What do you want from people?” We came up with the most basic feature set that would appeal to both sides and would check all those boxes. You can sync your accounting software with Atlas, and it pulls in all your transactions. You don’t have to export them to a spreadsheet or manually enter anything. Everything’s coming in. You’re tagging all of your transactions with the corresponding funding source and funding source budget line item.

From a very basic level, it functions similarly to QuickBooks Classes. The difference is that if you want to split a transaction differently, you can do that. It’s not going to sync back to QuickBooks, so you’re not altering your accounting software. You can do whatever you need to do to make it make sense to you and your grant funders. You also don’t have that issue of really weird, long P&L by class reports that you get in QuickBooks that are unreadable.

That was the biggest starting off point: How do we take what people are doing in a spreadsheet and automate it with the click of a button?

Hugh: Tracking the dollars is really important. We’re also going to track the impact of the work. Depending on what the grant is. Is there a way to build in this reporting in the work itself so that the reporting is a byproduct of performing whatever you’re doing with the grant?

Ansley: There is a big push in the for-profit sector, especially in the start-up sector, to track KPIs, or key performance indicators. In the nonprofit sector, they call them performance or program metrics. Especially this wave of COVID funding, that is built into the grant that you have to be very specific about the numbers of people that you helped do XYZ function. I’m a huge fan, and I think everyone should do that. That’s been hard for nonprofits to do because a lot of it is self-reported or it’s through paper surveys. How do you digitize 1,000 paper surveys in a way that doesn’t take forever and you can actually get meaningful information out of them?

We are in the process of building a feature that is not out yet. It will allow organizations or grant recipients to track these performance metrics in real time. You set up what it is you are trying to track. You can actually create a survey that then when people answer it, it will collect that data. If you have used Google Forms or AirTable, it will pull that information in. You can run analytics on that information. You can see how many people did we help? Was it successful? What did they say about this? What was the impact? You can really get to the bottom of this data.

The other thing is you can also take that data and put it on a grant report. It’s all in one place. That problem of some of it is in Google Drive or OneDrive or on my desktop or on a piece of paper or in Sally’s office down the hallway, that’s not an issue anymore. Everyone has access to the same information in the same cloud-based system.

Hugh: I work with lots of nonprofits, and they have excuses for not doing things, especially accounting. I don’t care if you’re in a religious organization or cause-based charity or membership organization. There is some pretty consistent patterns. It’s not really busy work; it’s really your accountability piece. It’s the integrity of everything. We’re basically managing other people’s money.

Ansley: Exactly. It does feel like busywork though when it’s all paper-based. I can see how that reasoning comes about. I have 100 of these surveys. It’s busywork to enter this into a spreadsheet. You’re right. That is busywork, especially when technology exists for you to scan all of that and dump it into a spreadsheet, and you can immediately run analytics. Bringing that industry into technology that exists in other industries but has been severely under-utilized in the nonprofit industry.

Hugh: Welcome to our world.

Ansley: Absolutely.

Hugh: Is there software that they could not use paper and get that kind of input that is digital to begin with?

Ansley: Yeah. There are apps where you can literally take pictures of paper, and it will dump it into a spreadsheet. There is so much technology out there already that if you just put the pieces together, you have really incredible software. You can run it through a scanner and do 100 in a minute.

I’ve had a lot of conversations with nonprofits where they’re like, “It just feels like we got left behind.” You did. It’s hard to explain to people that have not been in the nonprofit industry that there is money to be made there if you’re a tech company. People really do need help. Nonprofit doesn’t mean no profit. There is plenty of income going to nonprofits. They need help because they’re understaffed and underfunded. If you can offer them a solution that cuts out a huge chunk of that 20% loss on grant funding, they’ll take it. The technology already exists. You just need to give it to them in a way that they can use it.

Hugh: That’s fascinating. What are some of the classic mistakes that nonprofit leaders make in doing the accounting and reporting and tracking of the results from the grant?

Ansley: Reporting only on what you care about. Funders care about different things than people in the organization care about. Do I care about how many shoes you gave out? I really don’t. I care about the impact of the shoes that you gave out. Thinking a couple of steps down the line. Shoes in and of themselves mean absolutely nothing. Do those people already have shoes? Were they homeless? Were they foster children? What was the actual impact of you doing what you did? Is there another organization that does it better? Are you efficient? When you ask why a few times. Why do you exist? Well, we give out shoes. But why? People are homeless and cold. Why? That is when you really start to get into the impact.

One of the things that I think nonprofits are starting to understand but historically have struggled with is how you make the case that you are important in your community. My town has three homeless shelters. There is one really big one, and there are others that are more niche, like a battered women’s shelter. Is one better than the other? I don’t know. Should one get more funding than the other? It’s conceivable. But how do you prove to the city that you should be funded? If you can make that argument, you will be the one funded.

Understanding how you fit into the larger picture and what other people care about is really the key to telling an effective story to make a good case for why you should get the funding over someone else.

Hugh: Folks, there is lots of really good sound bites here. Lots of things to write down and take to your board because you need to be doing this. The board doesn’t understand how to be the board on many occasions. The board is responsible for all of this ultimately. Anything financial, the responsibility rests on the board. Governance and finance. It’s so critical that we do this for many reasons.

We get really busy doing stuff that is not really productive. It sounds like what you’ve done in this area, wish you could do in a lot of other areas. How do we then take all this stuff and put it into a manageable system? We’re not just chasing a lot of busywork around and frustrating volunteers or spending staff money when we really need the staff to be doing other things. It’s not saying this isn’t important; it’s just a better way to do it.

What are some other things we haven’t talked about in this whole grant management? You mentioned contract management somewhere. It’s about grant management, but you also have a contract to do something else. You have to report on the terms of what the agreement was. To your point earlier, doesn’t matter what you care about. It’s what the funder wants to see happen. What are some of the things that people need to know about this?

Ansley: This is an industry that has been mostly unchanged for a long time. Grants are given out all over the world. It’s way behind technologically all over the world. There are a lot of tech companies that are coming out now that are doing different things for nonprofits. My fear honestly is that they are going to create a high-tech version of the problem. They still are going to silo data. Everything will be segregated. You are still going to have to go to 10 different systems to find the information that you need. Okay, that’s not any better than what we’re dealing with right now. I can open 10 different spreadsheets, and that’s free instead of paying tens of thousands of dollars for 10 different pieces of software.

One of the things I think is important is taking a holistic, high-level view of what information needs to communicate with what other information? What is the big thing that we’re doing? How does this all fit together?

From a grant management perspective, and a financial perspective, what do things look like three years from now? What kind of funding do we need? What kind of story do we need to tell? How do we need to potentially pivot? If we’d been having this conversation two years ago before anyone had any idea what COVID was, it might have less impact. I sincerely hope COVID never happens again and that it ends soon. If something like that were to happen again, and things like that happen in nonprofits all the time, like economic downturn or something random happens, how do you adjust? How does that affect the funding that you need and the way your organization functions? The bush I’m beating around is how do you act more like a for-profit company that is constantly thinking about these things? That lives and dies by the bottom line? That is super important for a nonprofit.

Hugh: I want people to realize I didn’t prompt that comment. We tell people you’re running a for-purpose tax-exempt business. You’re not creating profit; you’re creating proceeds for good. We paralyze ourselves, Ansley, when we use the word “nonprofit” because we go into scarcity thinking for money and everything else.

You talk about the syncing to the funders’ calendars. How do you research grants? For recipients, it automates grant searching. You have the seamless collaborative integration of outside software we talked about already. Intraorganizational collaboration tools. It’s easy to print reports. Talk about that grant research process.

Ansley: We are in the process of testing an AI feature. I know AI is the weird stepchild of tech that no one really wants to touch. It’s really incredible. I think it’s going to be game-changing for the grant management sector, or grant sector in general.

I had a hypothesis that we could get rid of manual grant searching. Is that possible? Get rid of being subscribed to 100 different listservs that are constantly spamming you with every grant application that you don’t qualify for. What we’re doing is saying, “Ok, if I know about your organization, if I know what you do, where you are, all that demographic information that everyone cares about in a grant application, then I should be able to predict the likelihood that you qualify for something.”

The other thing that takes a ton of time in searching for grants is reading these RFPs. Some of them are 20 pages long. You get halfway through page 19, and you realize you don’t qualify for it because of some random clause buried in paragraph five. That is so frustrating. You just burned probably four hours at this point looking for it and then reading it. Thanks to the magic of AI, computers can read those RFPs in a matter of seconds.

We’re building a grant database crawler. The first thing we do is we crawl these grant databases: public, private, community foundations, and more. Then we rapidly read these RFPs. We then take the information about the organization that is our customer, and we send them an email saying, “Hey, we looked through this grant RFP. We think there is an 80% chance you qualify.” The organization that receives that email can decide, “80%. Do I want to try that out?” They can go look themselves.

The nice thing is the more users we get on the platform, the system aggregates data on where you are getting your funding. Are you getting it mostly from the federal government? Do you have a 0% success rate with the federal government? Taking all this data, we can say, “We have this $1 million federal grant that you do qualify for, but you’ve never gotten a federal grant before, even though you have applied for 10 of them. Should you even apply for this one?” That cost/benefit analysis of it’s worth this much money, but it will take this much time to apply, and we have this percent chance of getting it, we are trying to automate that information. You can know immediately, “Yes, we should apply,” or “No, we shouldn’t,” to save that time. There is not a guarantee that you will get everything you apply for.

That is the kind of work we’re doing with that feature you just referred to. From a long view perspective, I’m basically saying, “Let’s question everything. Let’s question the way we find grants. Let’s question the way we apply for grants.” For instance, could there be a universal grant application? I don’t know. There’s one for college applications. Could there be? All of these things that nonprofits have had to get used to, should they have to get used to them? I don’t think so. That is the direction we’re pushing. How much can we revolutionize this industry to make it as easy as possible for organizations that are doing good work in an efficient and effective way to get more funding?

Hugh: This is all so great. Ansley Fender, this time has just gone whoosh. I want to encourage people to go to GetAtlasSolutions.com. Check it out. There is so much good stuff here. We don’t know how to do at this level of efficiency because we think it’s really hard. Actually, we make it a lot harder than it ought to be. Ansley, you’ve done a great service by doing this. You are so articulate about sharing the value of it. Thank you for being our guest today.

As we wrap up this really informative session, what is a thought or tip or idea that you’d like to leave people with today?

Ansley: The biggest thing is grant funding in 2022 and moving forward is going to be based on economic development. That is a big push that has been happening, especially in municipal governments. If you can prove that you are important for your local economic development initiatives, that is where the funding is at. Go to your city. Find out how to be essential. You will be written into their grants if you can make a good case for that. That is where grant funding is going to come from next year.

Hugh: You heard it right here. Thank you so much for being our guest.

Ansley: Thank you.

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