Supporting History

Three Simple Rules: A State Historical Fund Grant Management Primer

Originally published in Colorado History NOW, June 2004

On May 20 and July 20, the Colorado Historical Society’s board of directors will announce State Historical Fund grant awards.  It will be a happy time for many grant applicants, and we would like to make sure the good times keep rolling, right through to the final ribbon cutting ceremonies.

As a SHF grant recipient project manager, you know that once you receive that first congratulatory letter from the CHS/SHF, the real work begins.  Managing a grant may seem daunting, especially if you’ve never managed one before.  But the whole process is very simple and straightforward if you go slowly and keep in mind a few simple concepts.  Here are some the most common problems grant managers experience and how to avoid them.

The first frustration many new grant managers face could be called “jumping the contract gun.” With every grant award comes a critically important legal agreement that defines your whole project, called a grant contract.  Your fully executed (signed) contract defines your formal relationship with the SHF and “activates” your grant.  This contract is usually negotiated approximately two months after you receive the award letter.  As you probably know, you can never start work or encumber any funds (hire, contract with anybody else, or purchase materials) until you have this legal agreement with the SHF.  If you spend or encumber any money before you have a contract with the SHF, you will have to count that money as a loss.  The SHF cannot reimburse you for money spent during any time when the SHF did not have a formal relationship with you, and you cannot count it toward your cash match requirement. To avoid this common project pitfall, follow the one simple Golden Grant Management Rule: Understand Thy Contract.

You are probably wondering how to avoid other grant management problems throughout your project.  You might ask, “Is there a step-by-step instruction manual for managing grants?” Yes! It’s called the SHF Grant Manual and is sent with all award letters.  That manual is your “grant management Bible.” If you do not read it, you will not know what reporting requirements the SHF expects from you as your grant project moves along, and that’s not good if you happen to be audited down the road!

If you have started your project by understanding your grant contract and reading your SHF grant management manual, and work is proceeding under-budget, could there be any possible snags? Maybe.  Toward the end of your project, when you are ready to apply to the SHF for your final disbursement of grant funds, you may expect to see a check for a certain amount, only to find out you’ll be receiving only a portion of that money.  Why does this happen, and how can you avoid this situation?

It helps to understand cost sharing, and exactly what you and the SHF agreed to pay.  When your organization is awarded a grant, you sign a contract to complete a scope of work (think of this as your project “to do” list) and the SHF agrees to provide you with a “not to exceed” amount of money.  Any savings are shared equally between you and the SHF.  Think of it this way: you are a developer and you have hired a contractor to restore your historic building.  Before your project begins, you might agree to share any cost savings in a 75 to 25–percent ratio.  That means that if your contractor can restore your building for less than the budgeted amount of money, the two of you share any money saved.  The same agreement applies with a SHF grant.  If you are able to complete your preservation project under budget, great!  You save funds you promised to spend, as does the SHF, in the ratio you agreed upon in your grant contract.  Everybody wins!  And best of all, any money returned to the SHF is recycled and used to award grants to other worthy projects.

As you can see, grant management can be simple.  By starting out right, reading your grant manual, and living by your contract, you will likely enjoy a smooth preservation project, and you will establish a great track record for your organization. That’s important if you want to receive additional grants from the SHF or any other granting organization.  And of course, if you have any questions about the SHF, please call the SHF Applications and Outreach Staff at 303/866-2825.

BY RACHEL SIMPSON, State Historical Fund Technical Advisor