What Is Grant Management? The Ultimate Guide for Grantmakers

As a grantmaker, you know how essential grants are for helping mission-driven organizations and individuals fulfill their goals. However, your role goes far beyond combing through your applications and deciding which organizations to disburse grants to.

The process that follows—managing your disbursement, tracking how the funds are used, and analyzing the impact of the funds—ensures your foundation, association, or higher education institution’s efforts yield meaningful results. This guide will walk you through grant management from the perspective of grantmaking organizations by covering the following topics:

• Grant Management FAQs
• The Grant Management Lifecycle for Grantmakers
• How Software Can Help Grantmakers Manage Grants

When your team handles grant management responsibly and effectively, grantees also benefit from more timely payments, streamlined reporting, and a stronger bond with your organization. Let’s start by answering a few frequently asked questions about grant management.

Grant Management FAQs

What is grant management?

Grant management refers to the process by which grantmaking organizations oversee all activities related to a grant. It encompasses all tasks required to ensure that funds are distributed responsibly and effectively to grantees, enabling them to make a greater impact on their communities.

The grant management process is typically broken into three stages: pre-award, award, and post-award. Activities that occur during these phases include creating and promoting grant applications, reviewing submissions, disbursing grant funds, and analyzing the impact of funding.

How is grant management different from awards management?

Grant management and awards management are often confused, but while they share many overlapping processes, they refer to two different concepts:

• Grants support a specific mission, project, or goal of the grantee.
• Awards recognize outstanding achievers or honor excellence in academic, professional, and community contributions.

In short, some grants or grant funds are also awards, but this is not always the case. Grant management concerns philanthropic investments aimed at advancing an ongoing mission or future project, whereas awards management involves administering and overseeing awards as recognition for past achievements.

How is grant management different for grantmakers vs. grant recipients?

While grantmakers and grant recipients must both go through the grant management process, it looks different for both. Here is what each stage looks like for these groups:

Grantmakers and grant recipients may also require different software solutions to support them throughout the process, as most tools are made for one group or the other. Before investing in a grant management tool for your organization, ensure it’s designed for grantmakers, not grantees.

How does grant management benefit grantmaking organizations?

Generally, grant management benefits grantmaking organizations by:

• Increasing operational efficiency and time savings
• Enhancing data and providing a better understanding of grant recipients
• Mitigating risks and ensuring funds are used for their intended purpose
• Streamlining impact analysis and understanding specific outcomes
• Boosting the organization’s reputation as a well-respected grantmaker

Grant management also comes with specific positive outcomes for certain types of grantmaking organizations:

• Associations: With streamlined grant management, associations can support member projects that advance their industry and provide better outcomes for all members.
• Higher education institutions: Colleges and universities can provide funding and a solid framework for research for faculty and students alike, thereby increasing the prestige of both the individuals and the institution.
• Foundations: Foundations support their own objectives by assisting mission-driven organizations that align with their values, thereby achieving a greater positive impact on their communities.

Applicants also benefit across the board when the grant management process is streamlined, as they’ll be working with a more knowledgeable and organized grantmaker who can provide them with the necessary structure  to demonstrate how grant funding has been used. In turn, more grant seekers will want to work with that specific grantmaker, which increases the popularity of their grant opportunities.

What are some common funder pain points in grant management?

Although grant management is an essential process of grantmaking, that doesn’t mean that it’s without challenges. Here are the most common funder pain points in grant management:

• Operational friction: If staff members have to use multiple tools or resources to handle grant management tasks, the process becomes much more challenging. For example, if you review applications in one portal, submit acceptances through email, and track budgets in Excel, then employees have to constantly jump from tool to tool, which can cause frustration.
• Strategy blind spots: When grantmakers lack an efficient process for managing their existing data, it makes it difficult for them to assess the overall impact of their grant program. It can also lead to errors like funding projects that were previously funded and failed, and only catching that a project is struggling or on the verge of failing months into the process.
• Compliance issues: Grantmakers need to do their due diligence on the organizations they consider funding. If steps aren’t taken to verify a grantee’s IRS status, governance strength, or financial status, it can result in failed projects that expose grantmaking organizations to reputational damage or even legal liability.
• Lack of transparency: One of the primary complaints of grant recipients is going through opaque grant application and management processes. When grantees don’t understand why you’re asking for certain documents or information, they may feel that you’re asking them to jump through unnecessary hoops, which can lead them to withdraw their application. High-quality applicants may even choose not to apply at all.
• Process overcomplication: This generally happens because of good intentions. Funders want to create a process that facilitates transparency and easy reporting, but they go overboard, requiring more oversight, documentation, and data than a project needs. This leads to rigid workflows, unnecessary data collection, and overwhelmed grantees.

Fortunately, there are ways to mitigate these pain points. One of the best ways is by investing in grant management software that makes it easy to manage funding opportunities with streamlined applications, user-friendly review portals, and other key features.

The Grant Management Lifecycle for Grantmakers

Grant management is a continuous process that starts the moment you decide to create a grant opportunity and ends once your grant recipient has accomplished what they’ve laid out in your proposal. Here are the different stages of the grant management lifecycle for grantmakers:

1. Create & Promote Grant Applications

Grant application forms are among the main documents grantmakers like you evaluate to determine whether an organization or individual should receive your grant funds. Ensure that you get the information you need from these forms by asking applicants to provide you with the following details:

• Organization’s legal name or individual’s full name
• Tax ID—Employer Identification Number (EIN) for an organization or Social Security Number (SSN) for an individual
• Primary contact information
• Executive summary of the request
• The specific issue they’re trying to address
• Who or what benefits from the issue being addressed
• How they will use grant funds to address the issue
• Logistic details of the project, including timeline, key staff members, and any partnerships
• Financial details, including total project budget, amount requested, and other funding sources
• Impact measurement plans, including key outputs and measurement tools

You may also want to request additional documents verifying the organization’s tax-exempt status, listing the board of directors, and providing its most recent financial statements.

Once you’ve finalized your grant application forms, begin promoting the opportunity through the following channels:

• Your website: Create a dedicated landing page on your website that lists eligibility criteria, deadlines, and FAQs, so any potential grantseeker has all the information they need to apply.
• Grant databases: Nonprofits frequently check grant databases like Candid, Instrumentl, and GrantStation to find new grant opportunities to apply for. Featuring your grant on these databases helps you gain visibility and receive more applications.
• Other organizations: Certain nonprofit associations or community foundations maintain lists of grants their communities can apply for. Ask them to add your grant to their lists.
• Email newsletters: If you’re already a well-known grantmaker, you may have curated email lists full of prospective recipients that are eager to hear about your next opportunity. Send out an email blast or newsletter highlighting your newest grant opportunity and direct readers to your landing page.
• Social media: Similarly to email newsletters, if you’re a known grantmaker in the space, potential applicants may already be following your social media profiles. Post an open call for applications to pique their interest and boost visibility.

During the open application period, you may also want to assign staff members to answer any incoming questions about your grant opportunity or guidelines, as applicants will inevitably want to ask you about the specific details of your grant or what you require from them.

2. Review Proposal Submissions

After your application period is closed, it’s time to review proposal submissions and decide which applicants will receive your grant. Ideally, you should follow a multi-round review process that looks something like this:

1. Compliance check. During this first stage, either staff members or your software review applications to ensure that applicants are eligible to receive your grant based on the initial criteria you set. For instance, is the applicant located in the area you serve? Is their request amount aligned with the grant amount? Did they attach all necessary documentation?
2. Review with scoring. Expert reviewers will take a closer look at the passed applications and assign them scores to determine how closely the projects align with your grantmaking goal, how feasible the project is based on the proposal, and whether the outcome is worth your investment. Most grantmakers will remove the applicant’s name during this step to avoid bias.
3. Deliberation meeting. The top proposals will be brought before a committee of reviewers, staff members, and board members, who will discuss which proposal(s) to select. How they make their final choice depends entirely on each grantmaking organization, but may include discussions on the riskiness of proposals and the spread of proposals to fund to ensure your grantmaking organization meets its goals.

It’s important to standardize the review process as much as possible to ensure that deserving proposals don’t fall through the cracks because of differences in review styles. For instance, an individual who habitually rates proposals lower than others may skew your scoring data.

To mitigate this issue, create a rubric that clearly outlines how a proposal should be scored and have multiple judges fill out that rubric for each application. You may also employ score normalization processes or simply look at rankings to ensure fairness across different viewers. Additionally, if any reviewers have a conflict of interest, establish early that they should recuse themselves from scoring that specific application.

3. Communicate Funding Decisions

After you’ve made your decision, communicate with all of your applicants. Be careful to handle rejections sensitively and empathetically. Send your rejections as soon as the applicant has been eliminated from the pool. Clearly state that you’re unable to fund their proposal, and if possible, tell them why. If you have the bandwidth, you may even allow them to call you for more details about why their application was rejected.

For approvals, keep in mind that this is the start of a partnership. Don’t hesitate to call the primary contact, congratulate them, and begin discussing next steps. You should also send an email outlining their next steps, including signing the contract, when the funding will arrive, and reporting requirements.

4. Disburse & Track Funds

Once the contract is signed, your next step is disbursing funds to your grant recipients in a timely manner. This process should also be fully compliant with your grant agreement and any relevant regulatory requirements.

Grant funds are rarely disbursed in a single lump sum. Instead, it’s common to release funds according to a schedule tied to the project’s milestones, or as reimbursement for documented expenses. Because of this, it’s essential to develop an easy way to track where funds are going for accuracy and to generate a clear paper trail in the case of an audit.

The best way to do this is by investing in grant management tools that integrate with your existing AMS or CRM and accounting and payment processing systems. When these systems freely exchange data with one another, your team gains access to a consolidated view of each grant’s status, making it easy to verify reports, identify any red flags, and maintain compliance.

5. Review & Analyze Grant Progress

After all funds have been disbursed, review and analyze the progress of funded grants together. This ensures that your grant program creates the desired impact while allowing you to evaluate whether each grant recipient is someone you want to work with again.

The exact way to measure progress will depend on the grant being funded, but generally, you should combine reports from grant recipients with the stored data your organization already has. While assessing these details, ask yourself the following questions:

• Has the grant recipient fulfilled the goals they set for these grant funds, or are they on track to do so by the end of the project?
• What challenges (if any) are hindering progress?
• What is the grant recipient hearing from their beneficiaries or community?
• What unexpected data or trends have emerged from the project?
• Are there any significant variances between budgeted and actual expenses?

It’s also a good idea to check in directly with grant recipients by phone or email. Ask them for an update on the project’s progress, discuss what challenges they’re facing, and what they would do differently if they could start over. You can also ask them how you can be more helpful as their funder, beyond the funds you’ve given them, to show them that you’re as committed as they are to the success of their project.

The insights from these conversations will help grant recipients reflect on how they can improve their work on the project while enabling you to streamline your grantmaking program over time.

How Software Can Help Grantmakers Manage Grants

As you grow your grant program, the grant management process becomes increasingly complex and time-consuming. The solution? Invest in a specialized tool that boosts efficiency.

Ideally, your grant management software should offer:

• Website & submission form creation: Easily create and build grant application landing pages and portals, alongside application forms that potential grantees must fill out before submitting their application.
• Multi-round review: Enable multi-round review with tools that automatically move applications from stage to stage. Assign specific applications to reviewers and toggle on blind reviewing to remove identifying information to reduce bias.
• Email platform: Centralize all grant communications within your management software. Create customizable templates for grant acceptance and rejection, and set triggers for specific emails to send.
• Fund & progress tracking: Split up grant funds so you know exactly when to disburse the next check to grantees. View how much of your total endowment or annual budget has been committed or paid out, so you never overspend your budget. And, manage financial and impact data to ensure that funded projects are on track to meet their goals.
• Integrations: As mentioned previously, your grant management software should have pre-existing integrations with your other important solutions to allow for seamless data transfer.

As a grantmaker, you need the right tool to manage your funding opportunities from start to finish and create your desired impact. OpenWater offers grant management software that includes all of the features above and more, simplifying the process for all kinds of grantmakers. Access a unified, robust platform that saves you time, money, and stress, no matter whether you’re new to grantmaking or an experienced funder.

OpenWater allows you to centralize all of your organization's application and review processes—not just for grants, but also for awards, abstracts, scholarships, and fellowships. More than 750 associations, foundations, and higher education institutions have benefited from OpenWater's comprehensive features. Check out our case studies to learn more!

Wrapping Up: Additional Resources on Application Management

With a streamlined grant management process, your organization shows grantees that you take their missions seriously and that you’re dedicated to making a positive impact by funding their projects. Take the time to audit your current grant management workflows and bolster them to make the process easier for staff members and applicants alike, whether that’s by adjusting your application forms or investing in grant management software.

Want to learn more about application management? Explore the following resources:

• What Is Awards Management? Everything You Need to Know
• What Is Abstract Management? A Guide for Conference Planners
• Grant Management Software to Streamline Grantmaking