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Spreadsheets Are Putting Your Funding at Risk

Posted by Kit Dickinson on Oct 3, 2017 1:10:00 PM
Kit Dickinson
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Grant management is a complicated and time-intensive process. For many nonprofit organizations, the familiar and comfortable method for tracking grants is using spreadsheets. But as your organization grows and the number of your grants increases, your spreadsheets become more trouble than they’re worth.

In fact, they could be putting your funding at risk.

Problems of Spreadsheets

Spreadsheets Are Error-Prone

One study revealed that 88% of all spreadsheets contain errors. This includes even the simplest of spreadsheets. For grant management, which requires complex macros and often involves multiple personnel entering data, the percentage of errors is certainly higher.

This hit too close to home for one nonprofit organization. The Global Fund had been posting erroneous grant data on its website for years without realizing it. It wasn’t until after the organization switched from spreadsheets to a grant management software that the errors were revealed. The errors were significant, ranging from a few dollars to millions of dollars.

Error-filled reports can raise red flags about the reliability of your grant spending. At best, you risk future funding opportunities. At worst, you raise questions about fraud.

You Don’t Have Transparency

Even at their best, using spreadsheets for grant management doesn’t give you insight into the data you need throughout the life of a project or grant. Spreadsheets contain data, but they aren’t reporting tools—and the more complex the data, the more difficult it is to discern what your current budget status is.

As a result, many nonprofits that rely on spreadsheets for grant management don’t know whether they’re overspending or underspending their grants. And their funding reports lack the accurate spending information that funding sources expect to see.

Vague funding reports with estimates don’t impress your funding sources. Instead, they feel like they’re not getting a full picture of how you’re spending their money.

No Formal Process or Best Practices

As your spreadsheet’s complexity grows, your need for a spreadsheet expert becomes more intense. Often, a nonprofit will rely on a single person to manage the intricacies of an unwieldy and increasingly complex spreadsheet—but that individual is likely keeping their process and best practices in their head, or keeping notes on loose-leaf paper.

When that person leaves your organization, or is out for extended leave, your entire grant tracking system will crumble, putting your reporting at risk and leaving you open to additional audits.

Spreadsheets Are Time- and Labor-Intensive

When you have just one or two simple grants to manage across a handful of employees, spreadsheets can be an easy option for tracking basic information. But once your nonprofit organization begins to add staff and win additional grants, the time and effort required to input data into spreadsheets becomes demanding.

Spreadsheets can’t be automated, which means you need dedicated personnel who spend several hours each week manually entering data and working with complex macros. What may have started as a simple solution has now become a monkey on your back.

And while that doesn’t put your funding at risk, per se, dedicating that much time to an activity that isn’t on-mission is certainly a poor use of your budget!

Spreadsheets Can’t Manage Grants

Spreadsheets are designed to contain data. They can’t perform the grant management tasks that your nonprofit organization needs. For proper grant management, you need a system that can:

  • Create an accurate accounting of time and dollars spent on each grant
  • Quickly prepare reports for audits
  • Provide funding updates at a moment’s notice
  • Provide forecasting information
  • Enable transparency at the employee level

A Better Way to Manage Grants

For growing nonprofit organizations that are managing increasing numbers of grants, there needs to be a better solution than clunky, error-prone spreadsheets. Automated grant management software can provide the transparency, reporting, and reliability that nonprofits need. A specialized grant tracking program gives you immediate insight into the status of your funding throughout the life of your project, and can help you avoid the red flags that raise questions of fraud.

IDI’s GrantAlytics grant tracking software integrates seamlessly into your payroll system, making grant tracking easier and more powerful than ever. Find out more about GrantAlytics, or contact us with your questions.

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Topics: Nonprofit Industry Solutions