Abraham Maslow said, “I suppose it is tempting, if the only tool you have is a hammer, to treat everything as if it were a nail.” Apparently, many software companies are easily tempted.
No one would dream of using the same shovel to clear land on a construction site and serve up meals at a soup kitchen. Rather, they would use one piece of equipment for the construction project and different equipment to accomplish their charitable objectives. So why is it that project managers and grant managers have historically been expected to share the same software to meet the needs of their very different stakeholders?
The answer might lie in the fact that projects and grants share two unique operational requirements.
First, both projects and grants require the creation of separate fiefdoms within their respective organizations. In the case of projects, separately identifiable buckets allow the project manager to associate the costs of completing a project with the price of the job. Information gleaned from a single project is used to determine profitability but is also used to determine the bid price of the next job. For grant managers, separate buckets by grant allow the manager to monitor the funds expended in fulfillment of grant objectives. Individual grant expenditures information is shared with the grantor organization and others who have strict requirements for how those funds can be used.
Associating costs with a discrete number of activities is a common headache shared by both project and grant managers.
Secondly, both projects and grants have a tendency to cross over multiple fiscal years, which can play havoc with many systems. A project is designed to run over a discrete period of time with a defined beginning and end. Projects, therefore, require their own system of tracking that allows costs to be associated with the organization’s reporting periods. Grants begin on the date of an award and end based on agreement with the grantor. They may last for a specified time period or end when a result-based milestone is reached. Grants also cross fiscal years and must provide reporting across the individual grant time period, the fiscal period of the recipient’s organization, and the fiscal period of the grantor organization. The ability to report across different time periods is a necessity for both project and grant managers.
Next week, we’ll touch on the solution to choosing the right nonprofit accounting software, by covering the range of differences between grant management and project management.
Stay up to speed on all of our Gantt vs. Grant posts here: “Gantt vs. Grant: A Grant Manager’s Guide to Selecting the Right Software”