Grant Management Software for Nonprofits, Grant by Grant

Grant management software for nonprofits keeps a running balance for each grant, ties every expense to the grant that pays for it and puts every funder deadline on one calendar. When a report comes due, it gathers the numbers into a pack your staff check before a word goes to the funder.

This guide is for directors and finance staff at nonprofits that receive grants. Our guide to AI for small business covers the wider picture, and our post on AI for Kansas City nonprofits shows an agent drafting grant reports from your records. This post covers the ledger under those reports. Gifts and pledges from individual donors have their own guide on donation tracking software for nonprofits.

What should grant management software for nonprofits track?

Grant management software for nonprofits should track each grant's award, restrictions, budget lines, expenses and the balance left. It should also track each report and spend-by date. With those in one place, your finance manager can say what is left on any grant without opening a stack of spreadsheets.

The record for each grant holds:

• The award. The funder, the award letter, the dates and the total.
• The restrictions. What the money may pay for and by when, in the funder's words.
• The budget. Each line the funder accepted, plus any later change.
• The expenses. Every cost charged to the grant, with its budget line, receipt and the person who coded it.
• The balance. Restricted money still unspent, kept apart from unrestricted funds.
• The dates. Report due dates, the spend-by date and any renewal deadline.

IRS instructions for the nonprofit information return (opens in a new tab) describe donor restrictions as limits on when an organization may use donated resources, or for what purpose. Federal money adds its own rule. For a federal award, even one passed through a city or state agency, the federal rules on grant financial management (opens in a new tab) ask for records showing each award's amount, source and spending, compared with the budget. Private foundation grants follow their own agreements. Volunteer time that a report counts needs its own approved record; see our guide to a volunteer hour tracking system.

Why do restricted grant funds get lost in workarounds?

Restricted grant funds get lost because the money sits in the books while the rules about it live somewhere else. Accounting software records the deposit and the expenses, the award letter sits in a shared folder, and the deadlines live on one person's calendar. Nobody can say what is left on a grant without rebuilding it by hand.

The usual workarounds, and where each one breaks:

• Accounting software tags an expense to a fund, but it cannot tell you a report is due or a budget line is nearly spent.
• A spreadsheet for each grant drifts away from the books and keeps no record of who changed a number.
• Calendar reminders sit apart from the money, so a spend-by date can arrive with funds unspent.
• Grantmaker portals serve the funder's side, such as applications and reviews, not your spending.

The gap shows up at report time. Someone exports a quarter of expenses, sorts them by grant and fixes the ones coded to the wrong program. A shared cost, such as rent split across several programs, is the hardest to defend, because nobody wrote down how the split was made. Good grant tracking software for nonprofits keeps that reason beside the number.

What we build: a grant tracker, screen by screen

Our grant tracker is a full web application that sits beside your accounting software and reads the same expenses. Finance staff and program leads each see the screens their job needs. Every grant follows one path, from the award letter to its budget, spending, deadlines and the report pack the funder receives.

• The grant list. Every open grant with its funder, end date, money left and next deadline.
• Expense coding. New expenses arrive from the books each night. Staff tie each one to a grant and budget line, or split it with a written reason, and the bookkeeper approves every split.
• Budget against spending. Each line shows what was budgeted, spent and left, with a flag when it runs ahead of plan.
• The deadline calendar. Every report, spend-by and renewal date for all your funders, with reminders to each grant's owner.
• The report pack. Budget against actual, the expense detail and the receipts and timesheets behind it, in the funder's layout.
• Grant files. The award letter, budget changes, submitted reports and their papers, kept after the grant closes.

That last screen matters for federal money. The federal record retention rule (opens in a new tab) asks recipients to keep award records, including financial records and supporting documents, for a set period after the final financial report.

The Admin Agent drafts the report narrative from the pack and the program notes your staff attach. It lists every number it could not find instead of filling the gap. Your grant manager reviews every line, your finance lead checks the figures, and a person submits the report.

Depending on the package you choose, you get either the right to use the grant tracker we build or full ownership of it, and your grant records stay yours under either one.

How the build works

The build starts with a written spec that lists your funders, grant types, budget lines, cost-split rules and report formats. A pilot then runs on one closed grant year, using your real expenses, so the numbers can be checked against reports you already filed. We connect the ledger to the accounting software your bookkeeper uses today.

What we test before we hand it over:

1. An expense split across two grants lands on both, with the reason and the bookkeeper's approval.
2. The balance on each grant matches the books at the end of each month in the pilot year.
3. A report due date shows on the shared calendar and sends reminders to that grant's owner.
4. The report pack for a past report matches what was filed, line by line.
5. A change to a coded expense keeps the old grant, the new grant, the name and the reason.

This is an illustration, not a customer story. Yvette is the finance manager at a job-training nonprofit in Kansas City, Kansas, with a federal grant passed through the city and three foundation grants. She used to rebuild a spreadsheet before every report. In the pilot, the pack for last spring's foundation report matched her filed copy, apart from one rent split with no written reason. She added one.

What stays with your finance staff and director?

Your finance staff and director hold every judgment about what a grant may pay for and what a funder is told. People decide whether an expense is allowable, how a shared cost is split, when to ask a funder for a budget change and what each report says. The ledger and the Admin Agent sort, add up and draft.

Other calls that stay with people:

• Reading a restriction when the award letter is unclear, and asking the program officer when in doubt.
• Releasing money from a restriction once its purpose or time is met, with your accountant.
• Signing and submitting each report, and every talk with a funder.
• Choosing which grants to apply for next.

Same team. Same jobs. More capacity.

Frequently asked questions

What is grant management software?

Grant management software tracks the grants an organization receives: each award, its budget and restrictions, the expenses charged to it, the balance left and every reporting date. Some products serve the funders that give grants. A nonprofit that receives them needs the grantee side, built around its own books.

What are restricted funds?

Restricted funds are gifts or grants that a donor or funder limited to a set purpose, a set time, or both. A grant for a summer reading program, or one that may be spent only next year, is restricted. Your books keep that money apart from unrestricted funds until the limit is met.

What is grant reporting?

Grant reporting is how a nonprofit tells a funder what it did with the money. It usually pairs a financial report, showing spending against the budget, with a narrative about the work and its results. The funder sets the dates and format, and a late or thin report can weigh on the next award.

How do you write a grant progress report?

You write a grant progress report by starting from the funder's own questions and the budget. Pull the spending for the period and compare it with that budget. Then describe what the program did, who it served and what changed. Explain any gap plainly, and have a second person check every number.

What is the grant management process?

The grant management process runs from award to close-out. You accept the award and set up its budget, code each expense to the grant, watch the balance and the dates, report on schedule, and ask the funder before any budget change. At the end, a final report closes the grant and its file is kept complete.

Next step

Book a free workflow consult and bring one award letter, its budget and the last report you filed for it. We will trace a few expenses from your books to that report, mark the places where numbers had to be rebuilt by hand and sketch the screens that would keep that grant's balance in view. We work from the Kansas City metro and meet owners face to face or by video call.