2025 grant administration guide for funders

Foundant Technologies

Discussions of grant management often focus on the steps grant recipients must take to fund their projects and administer those funds properly. But grant administration is no simple process for funders and grantmakers, either! Grant administration can involve any number of activities, from building relationships with your grantees to allocating foundation resources strategically.

Ultimately, overseeing the awarded funds is all about maximizing the impact funders can have on the projects they’re most passionate about. When grant administration processes are streamlined, funders can provide more support to recipients while analyzing how to achieve even better outcomes during future grant cycles.

What is grant administration?

Grant administration refers to managing a grant award throughout its lifecycle. This period starts with the earliest steps of designing a grant application process, including its requirements and relevant timelines. It continues through vetting potential grantees, awarding the funds, monitoring progress reports, and managing the grant closeout process.

And (hopefully), the grant cycle begins all over again as funders continue supporting the most impactful projects or discover new nonprofits and organizations to assist in their missions.

Why is grant administration important?

Effective grant oversight requires significant attention to detail, but those details are part of the bigger picture. Monitoring grantees’ progress toward intended outcomes involves tracking and understanding:

Key performance indicators (KPIs) and metrics—whether industry-standard or grantee-defined
Budgeting and expenses
Regulatory and grant compliance requirements

While grantees will provide this and more information in their regular progress reports, funders will need to sift through them and follow up to determine whether the recipients need additional help or if there may be irregularities.

Conversely, poor grant administration and hands-off approaches will result in funding being used inefficiently—or, at worst, even inappropriately—minimizing its potential impact and ability to produce positive change.

Grant administration roles and responsibilities

Grant administration is never unilateral or ubiquitous. Even a simple and streamlined grant management process will involve many stakeholders with different primary concerns or objectives.

Moreover, every project or initiative funded—whether newly formed or ongoing for decades—will likely encounter new variables during every grant cycle. These variables typically benefit from or require stakeholders’ involvement.

Grantmaker vs. grantee

All parties responsible for grant administration will fall on one side or the other of the basic transaction involved when awarding funds: the agency or foundation providing the grant or the grant’s recipients.

Both groups should be dedicated to competent and professional grant administration. Grantmakers need to ensure that their funds are used effectively, while grant recipients want to do everything possible to make their projects successful. Regular communication and collaboration are crucial to maintaining good relationships and maximizing funding and support during current or future grant cycles.

Grant administrators

While nonprofit organizations and grantmakers likely have employees dedicated to grant management, administrators at grantmaker organizations usually fulfill specific responsibilities.

The grant management process may involve any number of tasks, both pre- and post-award, including:

Request proposals and solicit information from potential grantees
Develop application guidelines and set grant deadlines
Conduct grant application review and communicate with applicants
Supervise grant recipients (and refer malfeasance to authorities as necessary)
Communicate expectations to grantees across the grant lifecycle
Stay informed about compliance requirements and expectations
Determine grant budgets and track disbursals or expenses as needed

At grantmaking organizations, administrators are expected to use their professional knowledge of the organization and its mission and their relationships with recipients to keep grants efficient and ensure their effective use.

Financial officers

Financial officers also play pivotal roles in the grant administration process at a grantmaking organization. Whether it’s performing audits, tracking expenditures, setting and monitoring budgets, or communicating financial expectations to stakeholders, financial officers are essential to the overall work of grant administration.

Best practices for successful grant administration

The process isn’t as simple as choosing a grantee and handing over the grant funding. To ensure that both grantor and grantee achieve progress toward fulfilling their missions, grantmakers should follow a few best practices during pre- and post-award management.

Establish clear requirements

One way to prepare grantees for success is to establish clear requirements and communicate them early, allowing recipients to remain compliant. Similarly, expectations for reports or updates should be set at the beginning of the grant’s term.

A few policies that can help to achieve this include:

Use clear, direct, simple language on all grant materials
Be intentional about the design of grant applications and instructions
Provide information about previous grantee organizations and their successes
Streamline the grant process and minimize extra requirements

Grant administrators will need to intervene when grantees engage in inappropriate or even illegal behavior. However, avoiding these missteps in the first place is far more efficient (and pleasant).

Track program performance

Grant administrators often act as the primary (if not only) stakeholders, specifically tracking the performance of grant programs and awards. Grantees should submit regular reports so administrators can track compliance, monitor budgets, and provide resources and assistance as necessary.

Revisiting any notes, feedback, or metrics recorded during grant application reviews or over each grant lifecycle after they close will also help broader improvements.

Perhaps one recipient’s more unorthodox proposal or stated goals resulted in more impactful outcomes? Maybe multiple recipients targeting similar outcomes produced widely varying results, and now grantmakers can better determine which projects or initiatives to fund next time.

Monitor for malfeasance

While application processes should remove any suspect organizations, administrators should also become familiar with common red flags that may require additional investigation.

Any of the following warning signs can indicate that grant funding is being misused (whether due to intentional fraud or unintentional error):

Large, unexplained expenditures
Sudden changes in vendors or other suppliers
Financial statements that differ significantly from previous accounts
Inconsistencies in inventory records or other documents
Inadequate documentation for any financial procedures
Staff or affiliate conflicts of interest
Mismatches between reported activities and outcomes
Rapid depletion of grant funds or resources

The consequences of fraud (particularly involving federal grants) can be significant, including lawsuits or criminal prosecution. Remaining aware and monitoring for potential red flags is an essential skill for grant administrators; their ability to identify problems early on will save time, money, the funder’s reputation, and resources in the future.

Communicate regularly with your grantees

While avoiding fraud or misuse is certainly one of the most important reasons to communicate regularly with grantees, it’s far from the only one. Nonprofit organizations have likely navigated a bewildering and time-consuming process to receive a grant in the first place.

Indeed, nearly three-quarters of nonprofits have reported difficulty applying for (and reporting on) funding, particularly from governmental sources.

Supporting applicants throughout the grant process and ensuring their time has been well-spent is essential to grant administration.

Leverage technology

Technology can be a useful (even essential) management tool, particularly for grantmaking organizations that administer various grants or fund many different recipients. An agency that issues federal grants (or funds from local governments) may need organizational or grant tracking software, as governmental funds often must follow different, more rigorous rules and regulations than private funding sources.

Implementing grant management software will help grantmakers streamline their workflows, leverage data and analytics to inform their funding strategies, and maintain accurate, compliant records.

Above all, grant administration carried out by funders must focus on staying flexible, efficient, and productive. This allows funds to be used more effectively and sustainably. It also frees up bandwidth for grantors to assist recipients in accomplishing their mission or meeting ongoing grant and compliance requirements more easily.

Need grant administration support?

Without excellent grant administration, funders cannot provide appropriate support to deserving projects, regardless of the funds they have available. That’s why grant management support is pivotal for these agencies and organizations.

However, grants and grant administration only grow more complex, whether due to funding more intricate projects, different awards, or more recipients pursuing similar outcomes.

Foundant’s tools simplify these administrative processes, from integrating with QuickBooks for more precise accounting to monitoring grant performance with real-time data via centralized dashboards.

Interested in making the most of your funding? Learn more about Foundant’s grant management software for funders today.