In the nonprofit sector, resources are often scarce, and every dollar counts. This reality makes effective grants management not just a function of financial oversight, but a lifeline for many organizations. Unfortunately, when organizations cut corners by hiring general accountants instead of experts in grants management, they often find themselves in precarious positions, as recently illustrated by abrupt layoffs at a nonprofit that left a Connecticut community reeling.
The Complexity of Grants Management
Many nonprofits believe that any accountant or CPA can handle their financials. However, grants management is a specialized field that requires a deep understanding of the complex rules and regulations governing funding sources. It’s akin to hiring a brain surgeon to extract teeth: while both are licensed medical professionals, their
expertise is suited to vastly different tasks.
Failure to recognize this distinction can lead to catastrophic consequences. Just as you wouldn’t entrust your dental health to a surgeon, nonprofits should not rely on accountants devoid of specific grants management experience.
The Cost of Inexperience
When organizations hire individuals with limited experience in grants management, they risk mismanaging funds, which can lead to an array of repercussions including:
- Inefficient Fund Utilization: Without specialized knowledge, funds may not be allocated effectively, leaving the organization struggling to support its programs and ultimately serve its mission.
- Compliance Issues: Grants often come with stringent guidelines and reporting requirements. Failure to adhere to these regulations can jeopardize future funding and result in severe penalties.
- Financial Instability: If funds are mismanaged, organizations may find themselves suddenly facing unexpected layoffs or budget constraints, as we recently witnessed. In a sector where missions are at stake, this can lead to a downgrading of programs essential to community support.
The Role of Expertise
It is essential for nonprofits to engage with professionals who are adept in grants management and finances specific to the nonprofit sector. These experts not only understand the intricacies of different funding sources but also keep abreast of the evolving landscape of nonprofit regulations and best practices.
Here are a few points to consider when selecting financial management talent:
- —-Specialization Matters: Look for individuals or firms that have a proven track record in grants management. They should be familiar with federal, state, and local funding regulations as well as the particular requirements for documenting and reporting on grants.
- —Stay Informed: The nonprofit world is continually evolving. Having experts who routinely engage with industry developments ensures that your organization remains compliant and competitive.
- —Consult with Trusted Advisors: Don’t be swayed by amateurs offering dubious advice. Instead, surround yourself with experienced professionals who are recognized in the nonprofit community.
Final Thoughts
- In the chaos that can ensue with abrupt financial mismanagement, the consequences extend beyond mere numbers on a spreadsheet; they affect lives, communities, and the very mission of the organization. By investing in the right expertise for grants management, nonprofits can safeguard their future and continue providing critical services to those in need.
The unfortunate reality is that many organizations could avoid such turmoil if they prioritize specialized knowledge over general accounting services. Don’t wait for a sudden crisis to spark change. Start today by ensuring your financial management aligns with the unique needs of the nonprofit secto
JoAnna Laiscell, MSAT
April 22, 2025
JoAnna Laiscell is the visionary President and CEO of Nothing But Numb3rs, a premier accounting and taxation firm specializing in nonprofit organizations, grants management, and law firm IOLTA and IOTA accounts. With over 25 years of experience, Ms. Laiscell has adeptly managed billions of dollars, establishing herself as a highly respected authority in her field.
