Why You Don't Want Your Grant Writer Submitting CARES Act Applications for Your Nonprofit

(Originally published in Spring 2020.)

Life is weird right now. Work is weird. Home might be weird. Things are just... different. Who knows when we'll get back to where we were before the COVID-19 pandemic (or if we even will at all)? The future is blurry for everyone and nonprofits are no exception.

As a nonprofit organization, you often fall outside of government aid programs. However, in early 2020, the federal government approved the CARES Act. The Coronavirus Aid, Relief and Economic Security Act or CARES Act, a $2.2 trillion stimulus bill, was signed into law on March 27. More than 850 pages, the bill includes critical operational assistance for nonprofits that can prove they have experienced a loss due to COVID-19 and charitable giving incentives to inspire donors to consider additional support.

You can learn more about the different types of loans and incentives by clicking here.

So there are some misrepresentations of these programs in the general public. Because there is an assumption that most nonprofits and small businesses will receive forgiveness for these loans, they're commonly referred to as "grants." This is inaccurate. These programs should be viewed exactly as they are: loans provided by the government with strict terms and qualifications. You must enter into these loans assuming that your nonprofit will be required to repay these loans, partially or fully, before signing anything. If you are confused about this, contact your local bank to discuss the details.

I won't beat around the bush here because you probably don't have time. You're wearing 100 different hats right now, so let's cut to the chase: You do not want your grant writer submitting these applications. Here's why:

• Your grant writer (consultant or full-time staff) is typically not authorized to enter into a financial obligation that requires repayment on behalf of your nonprofit. In my experience and wisdom, he or she should never be given that authorization. Only the executive level should be able to make this decision and sign his or her name to the applications after Board approval.

• The documentation and information required to submit the loan request should not be shared with a consultant and is typically not available to your full-time staff person. This information includes salaries, leave-of-absence documentation for individual employees, and payroll tax documentation. Think Human Resources and confidentiality.

• There is a better use of their time and expertise right now. Grant writing is a science and an art form. It's more than simply filling out forms with data and knowing how to crunch numbers. You've hired this person because of that expertise, and you should be utilizing it right now to connect with grant-makers across the country who are ready and willing to support nonprofits impacted by COVID-19. I feel there are nonprofits that fear submitting grant requests or implementing any fundraising program in general due to COVID-19 and the financial effects it has and will have on our economy. I am here today to tell you that closing shop is the wrong answer. If you want more details on why you should be fundraising and submitting grant requests right now, call us at 1-866-7GRANTS.

As someone with experience submitting these applications, I recommend any CARES Act applications are submitted by a member of your accounting or finance team that is authorized to submit legal documents which oblige the nonprofit to repay any funds received under the signature of your nonprofit President/CEO with Board approval.

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