Understanding the Grant Lifecycle: Info for Nonprofits

Many nonprofits rely heavily on grants to fund their missions, but successfully securing and managing grants requires a clear understanding of the grant lifecycle. The grant lifecycle refers to the full process a grant goes through from identifying opportunities and applying to implementing funded projects and reporting outcomes. For nonprofit professionals, grasping this lifecycle is key to improving funding success, maintaining compliance, and fostering strong relationships with funders.

This article breaks the grant lifecycle into two main phases: the pre-award phase and the post-award phase. Let’s explore the objectives, key activities, and best practices within each phase to help your organization navigate grants more effectively.

Why Understanding the Grant Lifecycle Matters

The grant lifecycle is more than just a sequence of steps. It’s a framework that helps nonprofits strategically approach funding opportunities and steward resources responsibly. By understanding each phase, nonprofit professionals can:

• Increase funding success. Knowing how to identify fitting grants and prepare competitive applications raises your chances of winning awards.
• Ensure compliance. Most grants come with rigorous rules and reporting requirements. Understanding the lifecycle helps avoid costly mistakes that could jeopardize funding.
• Optimize resource use. Proper management ensures funds are allocated efficiently and projects deliver the intended impact.
• Build stronger funder relationships. Transparent communication and accountability foster trust and open doors for future support.

Effective grant management is a continuous process requiring coordination, transparency, and a commitment to improvement at every stage. Let’s explore what each phase involves.

Phase 1: Pre-Award Phase

The pre-award phase lays the groundwork for a successful grant application and funding. This phase involves identifying projects, researching opportunities, preparing applications, and submitting proposals. Each step is critical to positioning your nonprofit for success.

1. Identify Projects Grants Can Support

The first step is identifying which projects make sense for the grant. Many types of grants are highly competitive, and funders want to support initiatives that clearly align with their priorities and demonstrate impact potential.

• Objective: Determine which organizational projects or programs require funding and align with your mission.
• Important activities: Assess your nonprofit’s strategic priorities and resource needs to identify suitable projects. Engage program managers and finance teams to ensure the project is feasible and aligns with organizational goals.
• Key best practice: Early cross-department collaboration helps ensure project readiness and strengthens grant proposals by demonstrating organizational capacity.

2. Research Grant Opportunities

Thorough research saves time and increases the likelihood of success by focusing efforts on grants that are a strong match. It also helps nonprofits understand funder expectations and tailor applications accordingly.

• Objective: Find grantmakers whose priorities and eligibility criteria match your projects.
• Important activities: Search for relevant grants, review funder guidelines, and track deadlines. Evaluate each opportunity’s fit with your nonprofit’s mission and capacity.
• Key best practice: Leverage tools like online grant databases to streamline research and stay organized.

3. Prepare Grant Applications

Well-prepared applications demonstrate professionalism and increase credibility. They also show funders that you understand their goals and how your project aligns with them.

• Objective: Craft compelling, funder-specific proposals that meet application requirements.
• Important activities: Gather necessary documents, develop narratives, build budgets, and secure internal approvals. Ensure your application clearly articulates the need, goals, methodology, and expected outcomes.
• Key best practice: Customize each application to the funder’s priorities and update applications regularly to reflect current data.

Bonus Tip: Explore and incorporate available tools in your fundraising CRM to help track your applications, related actions, contacts, timeline, accounting considerations, and attachments. Many solutions have tools that provide valuable functionality for grant management. And when your CRM is integrated with your accounting system, you can designate where the grant funds need to be deposited so as to abide by all restrictions and tracking requirements from the moment the funds are received.

4. Submit Applications

Timely submission is critical. Missing deadlines or submitting incomplete applications can disqualify your nonprofit, regardless of the project’s merit.

• Objective: Deliver completed proposals accurately and on time.
• Important activities: Review submission guidelines, double-check formatting, and confirm receipt with the grantmaker.
• Key best practice: Set internal deadlines ahead of official due dates to allow time for review and corrections.

Bonus Tip: Capture all completed applications and accompanying documentation in both your fundraising and accounting systems as attachments. That way, everyone has the same information, and no one is left wondering about grant specifics or budget details.

Phase 2: Post-Award Phase

Once your organization secures funding, the post-award phase focuses on managing the grant responsibly to achieve intended outcomes and maintain funder trust. This phase is just as important as the pre-award stage, with diligent oversight to make sure you meet reporting and usage requirements.

5. Accept Funding

Accepting funding requires more than just signing a contract. Understand the legal and financial obligations upfront so you prevent misunderstandings and ensure your nonprofit is prepared to meet funder expectations.

• Objective: Formally acknowledge and accept the grant award.
• Important activities: Review grant agreements carefully, clarify terms and conditions, and communicate any questions or concerns with funders.
• Key best practice: Carefully review compliance requirements to avoid issues later.

Bonus tip: Attach the grant award letter when the funds are entered into the system, too. This is also a great time to identify any grant report deadlines and capture those in your platform, so they don’t get overlooked. This also adds to the timeline on the organization’s record, so you have a history to reference.

6. Implement Funding into Your Projects

Effective implementation turns funding into impact and builds funder confidence for future support. Establish programs in your fund accounting software to make sure all expenses are accurately tracked and set up dashboards so you can easily see usage over time.

• Objective: Execute funded projects according to the approved plan, ensuring grant funds are used effectively.
• Important activities: Allocate resources, launch programs, and train staff. Maintain clear communication internally and externally and document all activities and expenses.
• Top best practice: Ensure all team members understand their roles and compliance requirements. Regular progress check-ins help address challenges early and keep the project on track.

Bonus tip: Use view-only access into both the fundraising CRM and accounting system, so staff have applicable access for their roles to the real-time data on the grant.

7. Manage the Grant

Effective grant management safeguards your nonprofit’s reputation and funding stability.

• Objective: Monitor grant progress, manage budgets, and ensure compliance throughout the grant period.
• Important activities: Track all expenditures carefully, document program activities, and maintain regular communication with funders to provide updates or address questions. Proactively identify and resolve any issues that may arise to avoid compliance risks.
• Key best practice: Use fund accounting software or tracking systems to organize deadlines, budgets, and reporting requirements. Staying organized helps prevent common pitfalls such as missed deadlines, incomplete records, or budget overruns, which can jeopardize current and future funding.

8. Report on Progress After Program Delivery

Even once your program or funding cycle has finished, your work isn’t done yet. Dive deep into your progress and build a foundation for future growth.

• Objective: Demonstrate impact and accountability to funders by providing clear, timely updates on how you used grant funds and what outcomes you achieved.
• Important activities: Prepare progress and financial reports that follow the funder’s specific guidelines, using both quantitative data (like metrics and KPIs) and qualitative insights (such as testimonials and stories). Address any challenges you faced, lessons learned, and how you adapted along the way. Maintain detailed records and be transparent about both successes and areas for improvement.
• Key best practice: Submit reports on or ahead of schedule, ensuring they are concise, honest, and data-driven. Regular and accurate reporting not only fulfills compliance requirements but also builds funder trust and increases the likelihood of future support

Best Practices for Managing the Grant Lifecycle

Beyond the specific phases, successful grant management relies on several overarching best practices:

• Understand the Type of Grant: Different grants come with varying funding restrictions and reporting requirements. Knowing these details upfront helps avoid compliance issues and ensures proper fund allocation.
• Stay Organized with Fundraising and Fund Accounting Software with Grant Management Functionality: Utilizing software designed for grant management centralizes data, tracks deadlines, and simplifies reporting, reducing risk and saving time.
• Collaborate Across Teams: Successful grant management requires coordination between program, finance, and development staff for alignment and accountability.
• Set Internal Deadlines: Planning internal milestones before official deadlines allows for thorough review and reduces last-minute stress.
• Build Long-Term Relationships with Funders: Consistent communication, transparent reporting, and gratitude foster trust and increase chances of future support.

Adopting these best practices helps nonprofits navigate the complexities of grants with confidence and professionalism.

Next Steps for Nonprofit Professionals

Mastering the grant lifecycle is a continuous journey that strengthens your nonprofit’s funding stability and impact. To deepen your expertise, consider investing in grantwriting training and researching grants that may align with your mission.

Looking for an integrated fund accounting and fundraising system that simplifies grant management? Break down silos and improve collaboration when you integrate Blackbaud Financial Edge NXT® and Blackbaud Raiser’s Edge NXT®. Learn more and schedule a demo today!