Grant Management: How to Secure & Track Nonprofit Funding

Tuesday, September 23, 2025 by Jon Osterburg

Grants are a critical revenue source for many nonprofits. Whether it comes from foundations, corporations, or government agencies, grant funding can make a significant difference in your organization’s ability to launch new initiatives and complete projects. That is, as long as you can secure the right grants by standing out in a competitive funding landscape!

When you apply for a grant, your job is to convince the grantmaker that of the many organizations applying for funding, your nonprofit is the most deserving—which is where effective grant management comes in. In this guide, you’ll learn everything you need to know about grant management, including:

• Grant Management FAQ
• Benefits & Challenges of Nonprofit Grant Management
• The Grant Management Cycle for Nonprofits

Grant management may seem complex at first, but by being strategic in your process and seeking outside assistance as needed, you can make grants a seamless part of your nonprofit’s funding model. Let’s dive in!

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Grant Management: Frequently Asked Questions

If your nonprofit is like most that are getting started with grant management, you probably have a lot of questions going into the process. Let’s clear up some confusion by answering a few common questions here.

What is grant management?

Grant management is the process of securing, tracking, and reporting grant funding awarded to a nonprofit. The goal of management is to ensure your organization uses its grant funds effectively and in accordance with the grantmaker’s requirements for providing them.

Grantmakers (or “funders,” as they’re sometimes called) see awarding grant funding as an investment in a nonprofit whose mission and planned initiatives align with their values and vision. This is why it’s critical not only to pursue the right grant opportunities, but to demonstrate to funders through proper management that they made a wise investment by choosing your organization as a recipient.

Who is responsible for grant management at nonprofits?

Grant management is a team effort, requiring input from multiple departments and leaders at your nonprofit. Small organizations pursuing their first grants often handle the entire process in-house and divide up duties among whichever staff members have the bandwidth to take them on.

As your nonprofit grows and pursues more grants, you’ll likely want to assign certain responsibilities to specific team members (e.g., you might have program leaders seek out grants that align with their initiatives and bring them to leadership for approval). You also may bring on a grant writer to draft proposals and a grant manager to take point on post-award tasks, first in an outsourced or freelance capacity and then as an in-house hire if you have enough work for them.

Some nonprofit financial advisors and fractional CFOs (including our team at Jitasa!) will also manage grants along with the other financial services they provide. In any case, your organization’s financial professionals should be involved in grant management to oversee recordkeeping and align grant opportunities with your other revenue-generating and spending activities.

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How is grant management different for grantmakers vs. grantees?

The term “grant management” doesn’t just refer to activities undertaken by grant recipients. Funders also use it to describe their process of:

• Developing and promoting grant opportunities
• Tracking and reviewing proposal submissions
• Recording fund disbursements
• Compiling post-award reports from grantees

It’s important to understand this distinction primarily because platforms described as “grant management software” can be designed either for grantees or grantors. If your nonprofit invests in one of these platforms, make sure it’s made for the former rather than the latter so you can access the features you need.

Benefits & Challenges of Nonprofit Grant Management

Although grant management can become complicated, especially if your nonprofit is trying to manage multiple grants at the same time, it’s also extremely advantageous for your mission when done properly. Here is a quick breakdown of the main benefits and challenges associated with grant management.

Benefits

If you manage your nonprofit’s grants well, you can experience:

• Increased impact. This benefit comes not only from ensuring you get to keep the grant funding awarded to you, but also from allocating that funding effectively as you push initiatives forward.
• Innovation opportunities. Well-managed grant funding can provide additional flexibility in your project and program budgets that allows you to experiment with new approaches to problem-solving as you deliver services.
• Stronger external relationships. By regularly communicating with funders and accurately reporting your grant progress, you can build trust that can lead to additional funding from those grantmakers down the line.
• A reputation boost. Having complete records of how you used your grant funding can help establish your organization as one that fulfills its mission and reliably follows through on its commitments, which can catch the attention of other funders.

Challenges

The most common roadblocks to effective grant management include:

• Compliance complications. Some grantmakers have stringent requirements for how grant recipients should use and report awarded funding, which your organization has to put a lot of time and effort into navigating.
• Inconsistent reporting demands. If your nonprofit is managing multiple grants at once, each funder will likely ask you to report your progress differently in terms of both content and format.
• Resource constraints. One grant usually won’t cover the full cost of an initiative, meaning you’ll need to secure several grants and/or allocate revenue from other sources toward that program or project as well—all of which you have to budget and report.
• Uncertainty. Because grants are competitive, you might do all of the work to apply for one and prepare for post-award management only to lose out to another organization (which is why it’s advisable to have backup options for each initiative you want to pay for with grant funding).

The biggest issue with grant management that you should be aware of is that falling short in any area runs the risk of financial penalties, funds being withheld, or even legal consequences, depending on the grantmaker’s agreement. Before you apply for a grant, make sure it’s a good fit for your needs and that your nonprofit is equipped to record and report on it correctly if you win it.

The Grant Management Cycle for Nonprofits

Grant management is an end-to-end process that begins even before you secure funding. Let’s dive deeper into the individual stages of the nonprofit grant management cycle.

1. Identify Grant Opportunities

Most funders designate their grants for specific purposes, meaning the best grant opportunities to pursue are the ones that align with your mission and upcoming initiatives. Take some time to define your nonprofit’s goals and funding needs before you start looking for grants that match those criteria.

Fortunately, there are plenty of resources available to help you find the right grant opportunities for your organization, including:

• Online grant research tools, such as Candid’s Foundation Directory or GrantStation.
• Localized search engine queries, which are helpful for identifying grants provided by community foundations and city or county governments.
• Board members, who may have community connections they can leverage to introduce your organization to potential funders.
• Grants consultants, who can provide an experienced, third-party perspective on your grantseeking process if you have the resources to hire one.

Your nonprofit’s accountant can also be a good external resource for evaluating grants and determining whether you’re in a good financial position to secure them. Although not every opportunity will be right for your organization right now, reaching out early can create a connection that you can leverage in the future when your goals or situation have changed.

2. Apply for Grants

Once you’ve narrowed down your options, you’re ready to apply for the grant opportunities you want to pursue. The goal of grant proposal writing is to make it easy for grantmakers to see why your nonprofit is the most deserving of their funding out of the entire pool of applicants.

Here are a few tips for writing standout grant proposals:

• Build relationships. Take time to get to know the funder, whether through an introduction from a board member or donor, a one-on-one meeting, or an invitation to one of your nonprofit’s events. Then, use what you’ve learned about their priorities and what they look for in a grant recipient to inform your proposal.
• Tell your nonprofit’s story. Include detailed information about your mission, past achievements, and plans to make an even greater impact in the near future. To make your proposal more persuasive, back your claims up with a combination of quantitative and qualitative data. For example, you might share statistics showing increased participation in a program over time alongside a testimonial describing how that program improved a specific community member’s life.
• Be specific. Describe the exact initiative you need funding for and how you plan to use the grant to push that initiative forward within a certain timeframe. Many funders ask for a sample budget to make your plans more concrete—if they do, double-check your calculations and include information about the other revenue you’ll use to supplement the grant if you secure it.
• Ask for feedback. After you’ve drafted a grant proposal, ask several people at your nonprofit to review it and offer suggestions for improvement. Try to find someone outside your organization to provide feedback as well for a more objective perspective.

Before you submit your application, make sure you’ve followed all funder guidelines to the letter and that you’re sending it off before the deadline. Most grantmakers won’t accept late submissions, and deviations from the requirements or other glaring mistakes can land your proposal in the rejection pile before the funder even digs into it.

3. Track Your Grant’s Progress

So, you’ve crafted a well-written proposal and sent it off on time, and your application convinced the grantmaker that they should give the funding to your nonprofit. Congratulations!

However, your work isn’t finished when you receive your award letter. Accurately tracking grant progress shows funders that your organization is fiscally responsible and takes the grant management process seriously.

Use the budget you submitted along with your grant proposal as a spending guide (or create one now in the unlikely event you weren’t required to do so before this point in the process). From there, you can set up a documentation system using spreadsheets if it’s your first time managing a grant. However, if you’re planning to track multiple grants in the near future, you’ll likely need to invest in grant management software or use the grant management capabilities built into your accounting system.

In this documentation system, keep track of the date, amount, and purpose of every grant funding expenditure, as well as the other revenue you spend on the program or project the grant is being used for. Additionally, note how the initiative itself is going in case you need to report those details to the funder.

4. Record Grant Funding

Along with tracking grant progress for the funder’s benefit, you also need to accurately record grant funds for internal accounting purposes. There are specific revenue recognition guidelines that you should follow based on which of the following types of grants you receive:

• Unconditional grants are just what they sound like: funds provided up front with no strings attached. You should record them as soon as you’re notified that you’ve won the grant, even if the funding takes slightly longer to arrive. For instance, if you receive the award letter for an unconditional grant in February but don’t get the direct deposit from the grantmaker until March, you should record the grant in February.
• Grants with contingencies require your organization to fulfill certain funder-imposed conditions, and the money comes in installments as you show that you’ve met those requirements. For example, a grantmaker might agree to continue supporting a program as long as it meets a certain enrollment threshold. Record the first installment of one of these grants when you receive the award letter and each of the subsequent installments as the funding comes.
• Reimbursable grants are paid out only after your nonprofit has spent the money for an initiative up front. In these situations, you’ll track expenses as you incur them so your accounting system is accurate and so you can give an itemized list of costs to the funder. Then, you’ll record the grant funding when you receive the reimbursement for that expenditure list.

When you apply for a grant, take note of the type so you’ll know exactly when to record the funding if you win it. If any difficulties arise, ask your accountant or bookkeeper.

5. Report Back to the Grantmaker

Finally, you’ll submit all of your required documentation to the grantmaker to show that you’ve upheld the grant’s conditions or are eligible to be reimbursed. Even for unconditional grants, it can be beneficial to update the grantmaker on your progress to prove your nonprofit’s trustworthiness and open the door to potentially securing additional funding from them in the future.

Especially for grants with contingencies, you’ll likely have to report your progress multiple times. Mark every reporting deadline on your calendar, and plan ahead to make sure you can compile the necessary data, catch and fix any mistakes, and format it according to the funder’s requirements well in advance of those dates.

After your nonprofit goes through the grant management process once, it’s time to go back to the beginning of the cycle and start looking for more grant opportunities! As your organization grows, you’ll likely have several grants at different stages of the process at any given time. But by that point, you’ll have formed connections that you can leverage to secure more funding, know the basics of writing a strong proposal, and already have tracking and recording systems in place to make reporting easier.

The grant management process may seem overwhelming, especially if you’re just getting started. However, when you put in the necessary research and effort, you’ll find the whole process much more manageable and rewarding. Plus, you can always turn to grant consultants or financial management firms (like Jitasa!) for help along the way.

For more information on grants and related topics, check out these resources:

• Nonprofit Financial Management: Overview + Best Practices. Discover how grant funding fits into the bigger picture of nonprofit finance and how to handle all of your organization’s money properly.
• Restricted Funds: Everything Your Nonprofit Needs to Know. Learn how to navigate donor- and funder-imposed designations on nonprofit contributions, including many grants!
• What Is a Nonprofit Audit? Ultimate Guide + Checklist. Explore a process that some grantmakers may require your organization to undergo to demonstrate financial responsibility—independent auditing.

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