How COVID-19 Changed the Nonprofit and Local Government Funding and Reporting Landscape

If you’re a nonprofit or local government agency or work alongside them, there is a good chance you have seen an uptick in funding possibilities within your field. COVID-19 took the world by surprise, and along with it came a government response with unprecedented spending and a massive increase in grant funding. The pandemic was terrible and nothing like anyone has experienced. But the new funding is good news for both traditional and aspiring grant recipients.

When you work in a field where federal funds support your salary and livelihood, it is important to be aware of any shifts and how they impact you directly. Here are some of the recent changes to the government funding and reporting landscape so you will be better informed and ready to incorporate best practices.

Be Prepared for the Additional Windfall of Government Funding

Between the American Rescue Plan Act (ARPA) and the Infrastructure Investment and Jobs Act (IIJA), more than $3 trillion was pumped into the economy for economic, public health, transportation, and infrastructure spending. Chances are that any windfall of grant funding you have recently received came from this pool.

So, you’ve just been awarded federal funding for the first time. Now what? You will need to address critical compliance requirements to be capable and fluent in managing grant funding. Even if you aren’t a first-time recipient, the following are best practices to start with when new funding is acquired:

• Identify your organization’s critical needs and how federal funding can address these gaps
• Conduct a review of the requirements outlined in the Notice of Funding Opportunity to determine if your organization is a fit and address any gaps
• Determine your organizational resources and identify any tools lacking to ensure adequate funds management

Successful post-award management improves an organization’s ability to meet its objectives by simplifying and streamlining evaluation, reporting, and auditing processes.

Understand the New Opportunities Based on Global Priorities

The government has made huge investments in clean energy, broadband, and infrastructure, the largest ever in history. Funding was allocated to dozens of federal departments and agencies, with hundreds of programs benefiting. Successful implementation of these programs will require close coordination with state, tribal, and local leaders like yourself.

This has translated to more project- and research-based opportunities to advance climate resilience and sustainability, bring high-speed internet to every American, and repair thousands of roads and bridges.

The government is eager to get these projects started with limited bureaucracy and delay while at the same time ensuring good stewardship of taxpayer dollars. A balanced focus on achieving program goals and maintaining management integrity is a great strategy for long-term competitiveness.

Keep Diversity, Equity, Inclusion, Accessibility Top of Mind

Are you looking to secure new funding opportunities or ensure long-term partnerships with your best aligned funding agencies? Well, then, what are you doing to stay competitive? The government has prioritized Diversity, Equity, Inclusion, and Accessibility (DEIA), and you should too.

Advancing racial equity and support for underserved communities has been a priority of the current administration from day one. The new policies seek to level the playing field better to reflect the potential pool of resources.

The theme of DEIA will likely continue to be important no matter who is signing legislation, as research continues to show that a diverse organization performs better than one with more homogenous views and experiences. DEIA initiatives are essential and timely because they strengthen the workforce by promoting diversity, equity, inclusion, and accessibility.

According to the Study to Identify Methods to Assess Equity: Report to the President, these are the barriers to entering and maintaining a footing in the federal marketplace that they identified:

• Inadequate vendor outreach practices
• Lack of visibility into available opportunities
• Insufficient agency management attention

To address any barriers to equal opportunities within your agency, develop a DEIA strategic plan and consider including:

• Forming a DEIA assessment and implementation committee
• Identifying recruitment and branding strategies to attract a diverse and highly qualified workforce
• Procurement option exemptions

Identifying and adjusting to these issues is vital to stay competitive and continually securing grant funding opportunities as a fundraiser. While the reporting requirements are at the federal level right now, an entity that has already implemented DEIA hiring and procurement policies will be ahead of the curve.

As an organization, you should regularly assess your ability to recruit, hire, develop, partner with, and promote a workforce that draws from the full diversity of the nation.

Collaborate with Vendors and Subrecipient Partners for Greater Impact

Continued marketplace disruptions are forcing organizations to search for new solutions. Environmental, natural disasters, and political shifts can impact government spending, so it’s becoming even more crucial to evolve vendors and subrecipients into partners. While a vendor or subrecipient relationship is usually transactional in nature, a partnership adds value, moves all parties towards a common goal, and allows concerns and ideas to be shared in a safe and open environment.

I’m not suggesting combining forces like a group of superheroes and working together over theme music. I am suggesting you build a strong partnership that’s developed over time and based on a foundation of trust and credibility.

It’s a good practice to incorporate single-source procurement options emphasizing equitable partnerships and beneficiaries. Vendor and subrecipient partnerships can be challenging, but the payoffs can be worthwhile in terms of increased performance, revenue, and client satisfaction.

Bottom Line: Stay in the Know

These changes reflect a sliver of the updates that have taken place since 2020. There are opportunities for grant recipients to expand their revenue portfolio, create new partnerships, and address challenges that might have seemed unattainable. The more you can prepare your organization, the better you will be able to tackle what lies ahead.

To learn more about managing government grants for your nonprofit or foundation, check out our whitepaper, Managing Government Grants: Reviewing recent changes and best practices, for tips on working with these types of funding sources.