When Foundation Grants Are A Match For Federal Grants

There’s a huge difference between managing a grant from a private foundation and managing one from the federal government. When private funders don’t have specific requirements, adhering to generally accepted accounting practices and preparing periodic reports on expenditures and program implementation and impact is good enough.

“Even when foundations and corporations have reporting forms and deadlines, the demands are usually straightforward and manageable,” said Barbara Floersch, executive director of The Grantsmanship Center in Los Angeles, Calif.

Managing federal grants is infinitely more complicated. “It’s absolutely doable,” said Floersch, but there is a “steep learning curve and lots of reading.” The new Uniform Guidance from the U.S. Office of Management and Budget (2 CFR 200) is around 300 pages and includes enough “must dos” and “don’t you dares” to unnerve anyone.

The relative simplicity of managing private grants is upended, however, when organizations use private grants as match funds for federal grants. If private grants are included in the budget for a federally funded program, those private funds instantly fall under the rules and regulations of the feds. This means that all the “must dos” or “don’t dos” in the federal rules and regulations apply to the private funds as well. Abiding by those rules is not a suggestion, it’s an obligation.

“It’s important to understand the circumstances that place private grants under federal rules,” said Floersch. If your organization is operating federally-funded programs, you’ll already have staff capacity and the necessary procedures to play by the book. But failing to understand when private funding must be brought into that more stringent federal management system can result in troublesome audit findings.