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September, 2021

The Grant Reporting Process: A Complete Guide

Year-end is approaching, and you’ve been tasked with writing a grant report for your organization. It’s your first time, and you’re unsure of how to write a grant report, let alone know what goes into it. The grant reporting process may seem intimidating for first-timers, but with the proper formats and framework, you’ll compile one with no complications.

The good news is, whether you are a first-timer asking yourself, “what is grant reporting for payroll?”, or a seasoned grant writer, this article will provide a complete step-by-step guide on the grant reporting process. We’ll discuss grant reporting requirements, guidelines, and how to write a report for a grant.

We will also explain how payroll and accounting software can streamline the grant summary report process. By the end of this article, you’ll know how to gather data efficiently and write a report for a grant confidently.

What is Grant Reporting?

A grant report is one of the legal obligations for grantmakers to approve funding. Grant reporting is usually a prerequisite for organizations to inform their funders about:

  • Programs and activities they’ve been running
  • How they’ve been utilizing the grant funds
  • Key performance indicators (KPIs) or the unquantifiable impact achieved

Grant reports typically comprise written narratives that demonstrate how you’ve been using these funds and convince your grantors to continue furnishing your company with grants. These narratives help tell the story of your organization to your funders. Grant report writing allows them to understand your organization’s needs and how the funds would benefit the grantor.

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Why is Grant Reporting So Important?

Grant reporting is important because it is a legal obligation for organizations to prove to their funders that the money is used wisely. That said, even if some grantors don’t require you to prepare a grant progress report, it will be beneficial for you to submit one for the sake of accountability.

Producing a well-crafted grant report will show funders that your organization is organized and can keep track of the funding provided. The narrative aspect of your grant report also offers the opportunity to build a rapport with your grantors. This relationship can influence the possibility of securing additional funding for your organization and positively impacting the overall strategy that informs funding decisions.

While many other factors are involved in securing grants, a solid grant report format is the backbone of proving your organization’s dedication and accountability. Furthermore, you can reuse your grant summary report to furnish your organization’s annual reports and newsletters.

Grant Reporting Requirements

Two things are needed to write a compelling grant utilization report: the narrative and financial components.

The Narrative

The narrative provides a detailed status on the project or program that used the grant funds. Within the grant report’s narrative, take the time to thank your grantors for supporting your organization. Depending on the funder, you may need to include information like:

  • The reason the project or program was needed
  • Key people involved
  • Estimated timetable for grant activities
  • Anticipated obstacles and how they will be addressed

You should also outline your organization’s activities with the grant and compare them to the activities you mentioned your organization would do in your original grant proposal. Finally, don’t forget to add the results and impacts of these funded activities that have benefited your organization and your funder.

The Financials

The grant writing process requires precision with your financial information, so it’s crucial to have all relevant statements accessible and up-to-date. Some funders may have different foundation reporting requirements or formats for the financial statements in your procedure.

However, your financials section should show how you’ve spent the funds based on your nonprofit’s original grant proposal. Manually compiling these details is very time-consuming, and the information may not be accurate or up-to-date. Accounting and payroll software can help you automate this process and gather the financial data you need.

Accounting Software

Accounting Software

You will also need to add financial statements in your grant report to show your grantors how you’ve been spending the funds. Ensure that you’ve compiled all expenses tied to the grant funds, including employee time.

Ideally, your accounting software should already record these numbers so you can cross-check the initial numbers versus your actual spending. Using cloud-based accounting software like Sage Intacct or Blackbaud gives you instant access to complete financial statements for the grant reporting process.

Payroll Software

Payroll Software

We know it’s essential to use accurate financial data in grant reporting, but you also need to track expenditures like employee time. Payroll software can help bridge this gap. Using a payroll solution that offers dimensional time tracking allows employees to allocate their hours worked to grants. This data is a critical element of grant reporting, ensuring accountability of the funds.

For example, an employee can clock in to grant A for 40% of their time and grant B for 60% of their time, so 100% of their hours worked are accounted for between the two grants.

Many payroll solutions also offer integrations with various accounting platforms for a more automated process. These integrations sync employee time data by grant to your accounting platform, so your financial statements include all related grant expenditures.

Grant Reporting Guidelines

Specific grantors may have different grant reporting guidelines. Still, grant reporting best practices include diligently tracking expenditures related to grant funds, checking the spending against financial statements, and staying on top of your deadlines.

Diligently Track Spending

Diligently Track Spending

One way to make your grant reporting process more manageable is to be consistent and diligent with tracking your organization’s spending. Ideally, a grant expenditure report is an ongoing process that should begin as soon as the grant is received.

If the person writing the grant report changes within the year, the expenditures should be available in your organization’s accounting software. Make sure you’re also tracking employee time spent on grants and storing this data in your accounting software. This process ensures that grant money expenditures are tracked and recorded.

Check Spending Against Financial Statements

Check Spending Against Financial Statements

This part of the grant reporting process is crucial. Cross-check the initial numbers of your spending against your organization’s actual expenditures to ensure an accurate representation of the numbers.

Most funders will require that you explain the variances between the budgeted amount and the actual amount spent on any activities in your grant reports. Be honest and accurate in your reporting.

For example, if you mentioned spending $2,000 on a particular activity but actually spent $2,400, then explain why. You should do the same if you underspend as well.

Also, be sure to keep documentation to back up your expense claims. Payroll and accounting software simplifies this process as all documentation is stored securely in the cloud. Online financial recordkeeping will also come in handy should another person step in to continue the grant reporting process.

Stay On Top of Deadlines

Stay On Top of Deadlines

As with anything, it’s essential to stick to your deadlines. It shows your grantors that you’re responsible and can help secure your organization more funding. However, if you’re unable to process the grant report due to activities or events that have not yet taken place, be sure to give ample notice to the funder and state your reason why. With sound reasoning, they will typically understand the situation.

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How To Write a Grant Report

Now that you’re well-versed with the foundation of requirements, it’s time to get started on your grant report. Below, you’ll find an overview of the process of putting together a grant progress report.

Don’t Rely Solely on Numbers

Don’t Rely Solely on Numbers

Despite the financial statements being an essential part of your grant report to showcase accountability, don’t fill your grant report with just numbers. It relays a cold and calculative disposition. Instead, show your grantors how personable your organization is and why they should continue funding it.

Thoroughly Describe Program Activities

Thoroughly Describe Program Activities

Here’s where the narrative aspect of your report comes into play — for every activity or event that you’re expending from the grant funds, describe as vividly as you can how the funding has enabled your organization to achieve it.

Sharing the human aspect of the program activities helps funders see firsthand how their grant money is used and its impact. For example, include pictures or a video of participants at the event. Aim to tell a compelling story of how beneficial the funds have been to help your organization achieve its goals.

Quantify Results (If Possible)

Quantify Results (If Possible)

If you can quantify the results of the activities you’ve been expensing under the grant, mention it in your grant reports. Detail any specific benchmarks or KPIs met as a result of this program. For example, if a nonprofit organization’s goal was to feed 10,000 homeless people during a soup kitchen for Christmas, and it was achieved, be sure to mention that within your grant summary report.

Acknowledge Possible Improvements

Acknowledge Possible Improvements

Consequently, if your nonprofit did not meet its KPIs, be honest and explain why. Mention areas for improvement and where you can aim to succeed in the future. It’s normal for goals not to be achieved, as long as you are aware of areas that require improvement. This transparency shows that your organization is actively thinking of making the most out of the grant money.

Include Next Steps

Include Next Steps

You may not have secured your next round of funding, but you should be confident and assume that you will. Include details of how you plan to execute activities using future grant funds.

If your project is a long-term one, mention how your organization plans on sustaining the project, its anticipated outcomes, or further iterations of the project. It shows your grantor that you’re already thinking ahead and your organization is ready for another round of funding.

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Grant Report Example

It’s time to put together all the information and narratives you’ve collated into the final grant report. If your funders have a specific grant reporting template, you should follow that.

However, if they don’t, here is a generic grant progress report example that you and your organization can reference for your own needs. If you’re unsure what type of information and level of detail to include when creating your grant utilization report, here is a sample grant report form.

How APS Can Simplify Grant Reporting

The grant report writing process can be long and arduous, especially when keeping tabs on your financial reports. Partnering with a payroll provider like APS makes it easier to provide accurate financial information in your grant reports.

We specialize in working with businesses, like nonprofits, educational institutions, and faith-based organizations, that are often required to submit grant reporting. Our cloud-based platform helps grant-funded organizations unify their payroll and finance data with the following options:

  • APS Dimensions: With dimensional time tracking, organizations can allocate employee time to grants in the APS system. Employees can clock into a grant dimension for accurate monitoring of time spent per grant. This information can be exported to any accounting system and used in grant reporting.
  • Sage Intacct Integration: Our native and automated integration syncs dimensional information between APS and Sage Intacct. This automation allows organizations to allocate employee hours to grants for a more accurate account of expenditures in grant reports.

For more information, schedule a demo with us to see how paperless payment methods can make HR and payroll easier for your team.

 

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