As a grant writer, providing services primarily to public-benefit nonprofit organizations, I get a glimpse into the internal controls and organizational structure of nonprofits. Because my background is in organizational development and internal controls, I see the holes. These holes are not a surprise to those managing the public-benefit organization. What is a surprise, is learning that these holes can potential prevent an organization from being awarded a grant.
Many mistakenly believe that, after finding a funding source, the next most important step is hiring the right grant writer. Not so. Yes, a good grant writer is important, but if you don’t have strong internal controls, you risk (depending on the funding source): 1) Not being considered, which means you just spent roughly $3,000 to $5,000 on a grant writer and gained no additional funding or, worse, 2) Your organization has been red-flagged by the funding source because, after awarding funds, they discovered your internal controls were lacking. Yes, it happens.
Internal controls are important on many levels: they set the rules for your board members, staff, volunteers and consultants; they provide a framework for decision making and provide guidance; they support your organization’s mission and values; they, essentially, protect your organization and help it thrive.
With that and my clients in mind, I’ll be writing a series of blogs on Internal Controls, I’ll also cover rules and regulations that govern nonprofits as well as provide samples of policies and procedures. Stay tuned!