Data silos cost the global economy around $3.1 trillion per year in lost revenue and productivity – so it’s no surprise that in a 2024 survey by Dataversity, 68% of organizations cited data silos as their top concern, up from 7% the previous year.
Information gets siloed when communication between departments is ineffective or when disparate systems can’t exchange data. Staff are then forced to waste time reconciling information manually, taking the attention away from mission-focused work.
With specialized grant management tools, nonprofit organizations can eliminate this problem and stay on top of the reporting demands in the U.S. nonprofit space. Read on to find out how.
The Problem with Silos in Grant Management
According to research from CompTIA and Harvard Business Review, respectively, 80% of companies report moderate to high degrees of data silos – and 84% of executives report suffering from their negative effects.
Silos occur when information is separated across different departments or tools rather than being available through one centralized, shared system. In grant management, finance might keep grant budgets on one spreadsheet while program staff track outcomes in another tool, for example. In these cases, insights across the organization are limited.
Inconsistent Information and Formats
With silos, each department may have different or out-of-date information – and that information might be stored in incompatible formats. For example, a finance spreadsheet might not align with the program team’s data entry, making it difficult to reconcile when it comes time to prepare a report. Research suggests that poor data quality costs businesses around $12.9 million per year.
Missed Connections
Important associations can go undetected. For example, expenditure records separated from outcome reports could obscure the relationship between financial inputs and program success. These missed connections limit the organization’s ability to get a comprehensive understanding of program effectiveness, which in turn can reduce the potential to maximize impact and demonstrate value to funders.
Another example is when program participation records are kept separate from outcome data. This makes it harder to check how participant attendance and engagement correlates with improved outcomes, limiting the ability to make improvements.
The Cost
These broken workflows have real costs. It takes longer to make decisions due to the administrative burden, approvals get delayed, deadlines get missed, and organizations struggle to tell a unified story to stakeholders.
For nonprofits already operating on tight budgets, duplicated work and inefficiency translate directly into less resources going toward mission delivery.
There’s also the compliance risk to consider. Research by Accenture found that 54% of financial services executives said a lack of cross-departmental collaboration had led to a data breach. It’s not easy to ensure that the correct data is stored – and is stored in accordance with regulatory requirements – when it’s spread across multiple systems.
The Benefits of Centralized Grant Management Solutions
Centralizing your grant management process means putting everything in one cloud based platform – a single grant management system where applications, budgets, financial reports, impact reports, and communications are all stored.
Streamlined Analysis and Reporting
In a unified grant management platform, leaders can access real-time data and make informed decisions without waiting to receive different reports from different people based on different datasets. This is especially valuable when reporting back to board members or external stakeholders that expect timely and accurate information.
Operational Efficiency
Real time visibility helps reduce bottlenecks. Shared dashboards provide instant insights into pending tasks, application progress, and compliance status, allowing staff to identify and address issues before they escalate.
Automated capabilities like deadline reminders and report generation mean these platforms free staff to focus on higher-value work. The risk of missed deadlines is also reduced and the entire grant lifecycle accelerates.
Ultimately, organizations can operate more effectively at scale thanks to the visibility offered by centralized systems.
Better Collaboration
Staff across departments can work together smoothly, as program managers, administrators, accountants and leadership all have access to the same versions of the same files.
Building Trust
Shared tools help departments trust each other. Staff no longer wonder whether another team’s numbers are correct as everyone refers to the same up-to-date figures. Over time, this strengthens cross-departmental relationships and accelerates decision-making.
Strategic Benefits
Centralizing grant management helps organizations reach greater levels of maturity when it comes to analysis, which may improve funder perceptions. Organizations with accurate, comprehensive data can demonstrate past grant performance more convincingly when applying for future funding opportunities and, in turn, grant making organizations may see them as lower-risk partners.
Why This Matters for U.S. Nonprofits
Diverse Funding Sources
U.S. nonprofits often have diverse revenue streams, including federal and state grants, corporate funders, private foundations, and individual donors. Each funder has its own requirements, deadlines, and reporting standards, and keeping the documentation organized can get overwhelming.
Compliance and Audit Readiness
Nonprofits have to comply with IRS reporting requirements and may undergo audits, especially if they receive federal funds subject to Uniform Guidance. A centralized system ensures financial records and supporting documentation are readily accessible, reducing risk.
Increasing Scrutiny and Transparency Expectations
With watchdog groups, ratings organizations (like Charity Navigator), and donor due diligence on the rise, nonprofits must provide transparency around operations and results. As mentioned, centralized systems make it much easier to provide accurate, up-to-date information without searching multiple sources.
Demonstrating Impact
Funders worldwide increasingly expect to see concrete impact data, and America has been central to the development of this trend.
A siloed system makes it harder to show how dollars translate into outcomes. In contrast, centralized grant management software aggregates data on financials and performance measures, providing structured, searchable records and enabling comprehensive reporting or dashboard views. This equips nonprofits to tell evidence-based stories about their impact.
How Our Funding Management Software Breaks Down Silos
Our platform offers features that address the inefficiencies of siloed systems. For example:
- Centralized document repository: Users can store every application, budget, report – and any other files – in one secure place.
- Committee Workspace: This feature acts as a central review portal, streamlining the application review process. When users evaluate applications within a shared environment, the painstaking process of downloading attachments, sending back feedback, and manually corroborating results is no longer required.
- Advanced reporting capabilities: In a few clicks, users can generate reports.
- Insights dashboard: Flexigrant Insights aggregates grant data so you can gain insights and optimize outcomes going forward.
- Manage multiple grants: Users can oversee an entire portfolio of grants – active, pending, and completed. For nonprofits managing many funding programs at the same time, this makes it far easier to align resources.
- Integrations: Flexigrant provides robust, seamless integration options. Users not only benefit from having centralized online grant application software – they eliminate silos further by connecting it to their existing systems.
Conclusion
Data silos make complex grantmaking processes sluggish and tedious – and they limit the insights available from grant program data. Centralizing everything helps organizations overcome these challenges, which translates into saved time, reduced compliance risk, and an all-round streamlined way of working.
Nonprofits, local government departments, and research institutions around the world entrust Flexigrant to manage their grant processes. To learn more or request a demo, contact us today.