A CEO’s Guide to Grant Distribution: Best Practices on Tracking & Reporting for Private Foundations

A Guide on How to Track and Report Grant Distributions in Your Foundation

Running a private foundation is no small feat—there are countless moving parts that require careful attention, especially when it comes to grants. One of the most crucial responsibilities for foundation CEOs and trustees is ensuring that grant distributions are not only made in the spirit of philanthropy but are also properly tracked, reported, and compliant with IRS regulations. If you find this process a little overwhelming, fear not! We’ve got you covered with some best practices and tips to help you stay on top of it all.   

Why Tracking and Reporting Grant Distributions Matter

Grant distributions are at the heart of your foundation’s mission. They are how you support the organizations, causes, and initiatives that align with your values. However, it’s not just about giving—it’s about giving responsibly and with full accountability. Properly tracking and reporting your grant distributions ensures: 

• Compliance with IRS regulations: Foundations are subject to strict rules to maintain their tax-exempt status. Failing to properly report grants can lead to penalties or worse—loss of status. 
  

• Transparency and accountability: Keeping a detailed record of every distribution demonstrates your foundation’s commitment to transparency and builds trust with your donors, stakeholders, and the public. 
  

• Efficient operations: By creating a clear system for tracking grants, you ensure that every dollar is properly accounted for and every grant is used as intended.  
  

To stay compliant with IRS regulations, private foundations must maintain accurate records of their grant distributions, including both financial and impact reports. 

Best Practices for Tracking and Reporting Grants 

1. Develop a Systematic Process 

Start by developing a standardized process for managing grant distributions. This includes: 

• Document every grant: From the moment a grant is approved to the final report on how the funds were used, keep a record of everything. This documentation will help you track where the money is going and what it’s being used for. 

• Create a grant tracking spreadsheet or database: An easy-to-use tool will allow you to track the amount, recipient, purpose, and distribution date of each grant. Be sure to include fields for follow-up actions, such as reporting requirements or evaluation deadlines. 

• Review grant terms and conditions: Keep the original grant agreement on file. Make sure the grant terms and purpose are clearly defined, and cross-reference them regularly to ensure compliance. 
  

2. Set Up Reporting and Monitoring Mechanisms 

Once the grants are distributed, your responsibility doesn’t end there. Effective monitoring and reporting are key: 

• Establish timelines for grantees: Ensure that your grantees are aware of reporting deadlines. These deadlines can help ensure that the funds are being used appropriately and effectively. 

• Monitor the use of funds: Don’t wait for the annual report to check in on the grantees. Regularly review their progress and use of funds to stay informed and adjust if necessary. 

• Set up internal checks: Assign a team member to regularly review grant activities, ensuring that funds are being used for their intended purpose. This could be an annual or semi-annual review depending on the size and scope of the foundation. 
  

3. Maintain Clear and Transparent Reporting 

Transparency is a cornerstone of responsible philanthropy. Here’s how to ensure your reporting is top-notch: 

• Document the grant's impact: Track the outcomes of each grant. What measurable change did the funds create? Did the grantee meet the agreed-upon objectives? 

• Prepare IRS-compliant reports: The IRS requires foundations to report their grantmaking activities on the Form 990-PF. Make sure your records are up-to-date and ready for this filing. This includes providing information on the amounts granted, the recipients, and how the grants align with your foundation’s mission. 

• Communicate results with stakeholders: Share the outcomes of your grant distributions with stakeholders, donors, and the community. This not only promotes transparency but also shows the impact your foundation is making. 

By following these best practices for grant tracking and reporting, your private foundation can ensure compliance and transparency while making a bigger impact. For more detailed information on IRS Form 990-PF, visit the IRS official website.  

Bonus Tip: Timeliness is Key! 

Let’s be honest—timeliness is crucial in the world of foundation management. Delayed reporting or tracking can result in missed opportunities, compliance issues, and unhappy grantees. That’s why at BryMar, we’re proud of our commitment to sticking to timelines. Our best clients are the ones who value timely, organized work and understand the importance of meeting deadlines—because that’s what ensures everything runs smoothly. 

Whether it’s distributing grants, filing IRS reports, or communicating with stakeholders, we know that staying on top of timelines is essential. At BryMar, we help foundations like yours stay on track with efficient accounting and reporting processes, so you can focus on what matters most: making a difference. 

Ready to Take the Next Step? 

If you’re ready to streamline your grant distribution process and ensure that your foundation is on the right track, let’s talk! At BryMar, we specialize in helping private foundations stay organized, compliant, and timely. Let’s make sure your foundation can continue doing good work with the peace of mind that your financials are in order. 

Contact BryMar today to schedule a consultation and discover how we can help you stay on track and make your mission a reality!