Board Policy on Grant Administration

17 Dec Board Policy on Grant Administration

“Claire” posted the following question recently, based on an article that I wrote for the Summer 2014 issue of Saving Land.

My Board is considering adopting a resolution that stipulates that 20% of every grant will be used for admin purposes unless otherwise stipulated in writing after reading the “Operations Fundraising” article in the Summer 2014 issue of Saving Land. How many organizations have adopted such a resolution and what are some positive and negative benefits you’ve seen? Does anyone have a sample resolution they could share? Thank you for any advice.

To the best of my knowledge, no one has ever done a survey of land trusts where this specific question was asked. And I do not have sample language at my fingertips, though I will see if I can draft up a sample resolution for a future post.

In my case, the matter came up in the context of an NRCS grant that my Sand County Foundation organization was about to receive. The amount of the grant would almost certainly trigger the need for an A133 audit. It was about to cost us $30,000 plus all the staff and overhead just to accept the NRCS money. We asked NRCS to pay for these items instead up front and negotiated a resolution that worked for everyone.

The point is that these discussions became much easier after we had passed a board resolution that set the expectation for including administrative overhead right up front. Few foundations, agencies, or individual donors even questioned the inclusion, much less balked at it. The few that did engaged us in the conversation, which was all we really wanted anyway. It put us in a better bargaining position.

If you can get past the idea of having a resolution at all, there is a legitimate question of how much. Frankly, I think that 15 percent is enough, but there are just enough grantors out there that do not accept administrative fees at all, or otherwise limit them, that having 20 percent in the policy helps recover the funding lost to them.

Having a board policy does something else positive as well. It helps us get over our collective shame about overhead. It costs money to create the possibility for land conservation, to have a worthy organization in place when landowners are ready to make conservation decisions. Bakers don’t have a problem including the costs of their labor, heat, electricity, and oven thermometers in the price of their cookies. Having a strong board policy here means that we won’t have a problem including those types of costs either.

– da

Photo credit: Paw Paw River, courtesy of Southwest Michigan Land Conservancy.