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Grant and Budget Streamlining: Developing State-Wide Systems

From the Michigan Nonprofit Association

Background

In 2000 and 2001, the Michigan Nonprofit Association (MNA) conducted two surveys of its nonprofit members; the first to identify important policy issues and the second to learn about nonprofits’ experience with grants and contracting with state government agencies. Both surveys showed that grant streamlining was an important issue for many nonprofits. Specifically, the nonprofit sector was interested in seeing streamlined budgeting and financial reporting, as well as a one-stop shop to locate grant opportunities.

Around the same time, the Michigan Department of Management and Budget began working with the National Association of State Auditors, Controllers and Treasurers and the Urban Institute on a project to develop uniform budgetary guidelines for nonprofits. MNA contacted the state Department of Management and Budget and began discussing the development of uniform budgetary guidelines in Michigan, as well as the other concerns expressed by the nonprofit community. These conversations led to discussions with leaders from other state departments, such as the Department of

Information Technology (DIT). DIT was considering developing a comprehensive statewide e-grant system that would address some of the streamlining and simplification issues.

As of 2004, the state had spent approximately $4.75 million on developing silo e-grant systems, either for entire departments or, in some cases, for individual programs within departments. However, there was no interaction between these systems. After some initial research, the state found that a comprehensive statewide e-grant system could be maintained for less than the cost of developing individual silo systems. Thus, developing a one-stop shop would not only benefit nonprofit grantees and state grantors, it also would help the state to reduce its budgetary expenditures.

Project Goals and Strategies

In 2002, MNA developed recommendations and goals for streamlining the grant process and common financial reporting in Michigan based on the results of its surveys. The first goal was to work with the Urban Institute to develop a common application that contains standard questions and budgetary definitions. MNA used research developed by the Urban Institute and feedback from nonprofit focus groups to determine which definitions and questions needed to be standardized and better explained on the forms.

The second goal was to work with the Department of Information Technology to develop a statewide e-grant system (similar to Grants.gov, a central grant website for federal funds) so that grantees could find, apply to, and report on state grants in one location. MNA coordinated focus groups to inform the state of nonprofit needs. Using feedback from nonprofit focus groups, the state decided to include a number of features.

First, the e-grant website would have web-enabled software so that nonprofits would not have to purchase software and a financial lock box that would calculate budgets for nonprofits. Second, an online nonprofit profile would allow state agencies to get to know the grantees better. Finally, an established login would allow nonprofits to login and see the status of their grants. This was important because some departments have better communication than others do, and it was often difficult for nonprofits to determine their status in the grants process.

At the same time, the state also convened a group of representatives from various state departments to design the customized e-grant system. The state then created a detailed proposal on how such a system would work, and authored a Request for Proposal (RFP) for the system. MNA provided feedback on components of the RFP. As of this writing, the state has accepted a bid and the vendor will begin work on the statewide e-grant system shortly.

Key Players

MNA worked with the state to develop a group of nonprofit organizations to provide feedback as needed to state regarding possible uniform budgetary guidelines and the design of the system. Organizations that have and will continue to provide input include the Michigan Association of CPAs, the Michigan Association of Counties, the Michigan Townships Association, and hundreds of nonprofit organizations across the state. MNA’s public policy committee, which is comprised of mainly umbrella organizations, was engaged from the beginning in guiding the project. On the state side, the Department of Information Technology convened a working group of representatives from various state departments to provide input and guide the project.

MNA Resources

MNA carried out this project completely in house with existing dollars. Approximately ten to fifteen percent of the Public Policy Initiative Director’s time was spent working with state departments and providing input on the RFP regarding the structure of the system, desired outcomes, and grantee needs. A minimal amount of President/CEO’s time was spent attending meetings and strategizing about the project. MNA also relied heavily upon the resources from the umbrella organizations that were part of its public policy committee to communicate to their members on the issue or recruit individuals to focus groups.

Success & Challenges

While the system is not yet in place, MNA believes any movement towards the end goal as positive. MNA believes that the process has allowed for a stronger relationship with the state, which can be beneficial for other aspects of MNA work.

The state’s fiscal difficulties continue to be a challenge for this project. Although there is

the interest for the statewide e-grant system, funding will continue to be a challenge.

Thanks to Erin Skene, Public Policy Initiative Director at MNA, for helping to write this story.

The Michigan Nonprofit Association is the collective voice of Michigan' s nonprofit organizations. MNA serves as a statewide network for the sector, a resource center on effective management practices, and as an advocate for the nonprofit community.

The National Council of Nonprofit Associations (NCNA) is the network of state and regional nonprofit associations serving over 22,000 members in 46 states and the District of Columbia . NCNA links local organizations to a national audience through state associations and helps small and mid-sized nonprofits: manage and lead more effectively; collaborate and exchange solutions; save money through group buying opportunities; engage in critical policy issues affecting the sector; and achieve greater impact in their communities.