What Is a Grant? A grant is a financial award given by an organization, government, or foundation...
Managing multiple grants
Majority of non-profits run multiple projects and would like to keep track of expenses for each project separately. Depending on the size of the organization, donor grants could result in separate projects. Dealing with multiple donors and multiple projects poses a challenge when it comes to tracking revenues and expenses separately.
Setting up a grant tracking system is important in order to monitor expenses by grants. This system provides two benefits. First, it keeps you on track and prevents you from exceeding your allocated budget. By tracking expenses separately, you will know how much budget you have left for each category. Second, when the time for reporting comes, having all your records in order makes donor-related reporting much easier.
To establish an effective grant tracking system, consider the following practical steps:
Depending on the software you use, it might be possible to set up separate grants and budgets within the software itself. QuickBooks and Xero, for example, have amazing built-in budget and grants tracking options. If your software doesn't support this feature, you can use Excel as a backup plan.
Establish a budget for each grant or project. As they say, failing to plan is planning to fail. If you don't budget where you are going to spend the grant dollars, it will be difficult to maximize the impact of those funds.
Track expenses by grant or project. When recording any expense, allocate it to the corresponding grant. Any expense explicitly not covered by a grant can be booked to the overhead or general expense pool of the organization. This will help you keep track of your budget and determine how much you have left to spend.
Establish a frequency to review budgets and expenses, either monthly or quarterly, to keep an eye on expenses. This will allow you to adjust your course if expenses are exceeding the budgeted amount and reorient your activities as necessary.
I have prepared an eBook that covers all the basics, which you can download for free here.