What Is the Federal Grantmaking Process?

Federal grantmaking is a significant function of the various government agencies that are obligated to distribute funds to public entities, private organizations, and other qualified recipients. It is an extremely organized process to ensure that the investment of public money results in maximum efficiency in order to promote different socio-scientific and complementary educational objectives. But exactly what is federal grantmaking, and what does it require in terms of grant management? The following guide explains the process in depth, along with a comparison to nonprofit grantmaking, and describes how Fluxx's grantmaking software systemized the process for governmental bodies.

What Is Federal Grantmaking?

Federal grantmaking is defined as the intentional process in which agencies of the government disburse funds to eligible organizations or entities. These are the kinds of grants that do not have to be repaid, and they are normally accorded to support an initiative or mission that coincides with federal policy or objectives, such as programs on public health, scientific research, and community development.

The entire process is highly regulated in terms of compliance, transparency, and accountability. Examples of such grants could be from the Department of Education or the National Institutes of Health to encourage work that benefits the public. This typically includes an application phase, evaluation, and post-award monitoring to ensure funds are used as awarded.

Is It Different Than Grant Management?

Where federal grantmaking involves the process of dispensing funds, grant management is considered the management of a grant from award to closeout. This involves the monitoring of project progress, compliance with federal regulations, management of budgets, and submission of progress reports.

In other words, grantmaking is the "front end"—determining who gets the money or what the qualifications of application are —while grant management is the "back end"—ensuring that funds are used as they should be and in compliance with the rules. Federal agencies must establish trustworthy systems for managing both aspects of the process. If either is managed poorly—for instance, if a grant is misused—it can lead to legal and budgetary issues.

Overview of the Federal Grantmaking Process

Federal grantmaking is a very structured process, which ensures that confidence is maintained that the grant money will be equitably allocated in a manner that is transparent and well-matched to applicants in the best position to use it. The key steps are outlined below:

• Announcement and Solicitation: It begins with a federal agency announcing a funding opportunity. This is most easily done through websites such as Grants.gov, in which agencies publish solicitations—or RFPs—outlining eligibility criteria, project goals, and how to apply.
• Application Submission: Eligible entities will be responsible for the preparation and submission of responsive grant proposals as requested by the solicitation. It typically contains all the details about the project, including descriptions, budgets, timelines, and expected accomplishment of the project.
• Bid Evaluation: Applications will be reviewed by a panel of reviewers that bases analyses on pre-established criteria. Among the aspects analyzed are the feasibility of the projects, alignment with federal goals, and the capacity of the organization to execute the project.
• Decision on Award: The federal agency then selects the projects that will be funded after reviewing applications. Decision-making at this juncture is quite vigorous, with a view to making sure the most impactful and well-justified projects are selected.
• Research Award Notification and Agreement: Selected applicants are informed and required to sign a grant agreement. This grants the terms and conditions, reporting requirements, and the amount of funding that will be disbursed.
• Post-Award Monitoring: Agencies should monitor after the spending of the grant for observing the span and pace of the particular project. It is required that the recipients periodically update through reports and/or evaluations to further comply with the federal guidelines.
• Closeout and Reporting: Finally, at the completion of the project, the grant is "closed out" by submitting final reports detailing what was accomplished—its outcomes—and financial expenditures and any challenges during the process.

How Does This Process Differ from the Grantmaking Process of a Nonprofit?

Although some similarities exist between federal processes and nonprofit grantmaking, there are some obvious differences:

• Compliance Issues: Federal grantmaking is highly regulated by rules, usually via the CFR, regarding how funds can be spent, filings, and even what happens when there is non-compliance. Nonprofit grantmakers enjoy more flexibility, with some legal guidelines as well.
• Rigor of Application: Most of the grant applications to the federal government will have a very specific and often elaborate process—for instance, where every budgetary item needs to be justified, along with what one could expect of it on a timeline and a set of outcomes. Nonprofits might rely more on mission alignment or potential for social impact, and hence might be less bureaucratic.
• Post-Award Monitoring: Federal agencies have complex post-award monitoring processes that account for each and every dollar. While there is some monitoring at nonprofits regarding the use of funds, they place more emphasis on long-term impact rather than immediate compliance.

How Fluxx Simplifies the Grantmaking Process

Funders of so many grants need a system to manage the grantmaking cycle smoothly from solicitation to closeout, which Fluxx grantmaking software does quite excellently. It offers an intuitive system that integrates with existing government systems to enable the facilitating agencies to overcome information silos, burdensome reporting, and laborious application reviews.

• Efficient Application Management: Fluxx allows government agencies to build their own application workflows and ensure that applicants submit all required documents and information in the correct format. This eliminates much of the communication back and forth with applicants, which often delays the application review process.
• Real-Time Reporting and Analytics: Fluxx makes post-award monitoring easy. Create real-time reports, track key performance indicators, and ensure federal guidelines compliance—all on one dashboard.
• Smoothening of Communication: Communication tools inbuilt into the platform ease the process of engaging both grantees and stakeholders. Automated notifications about deadline dates remind grantees while reducing chances of missed information due to centralized communication logs.
• Data Integrity and Security: Fluxx has designed the grantmaking system by keeping in mind the high standards of data integrity and security as set by federal agencies to ensure sensitive financial and project data is highly protected, yet easily accessible for those who need it.

Catalyzing Better Results Through Streamlining Federal Grantmaking

The federal grantmaking process requires effective dispersal and management of public funds. It is similar to grantmaking utilized in nonprofit organizations, but its more severe regulations and scrutiny make it require a strong system in place for success. Fluxx's grantmaking software simplifies the process from start to finish. With Fluxx's grant management software, federal agencies can become truly effective, minimize human errors, and ensure compliance.

Want to see how Fluxx can help you streamline your federal grantmaking process? Book a call today and experience the difference firsthand.