Nonprofit Grant Compliance Checklist

Why Post-Award Compliance Is Where Nonprofits Fail

Winning a grant feels like the hard part. Writing the proposal, waiting months for a decision, competing against dozens of other organizations. But the grant lifecycle doesn’t end at the award letter — it starts there.

Post-award compliance is the set of obligations you accepted when you signed the grant agreement. These include spending restrictions (the money can only be used for what you said it would be used for), reporting requirements (the funder wants to know what you did with the money), and documentation standards (you need to prove everything).

The stakes are high. Non-compliance can result in having to return grant funds, being barred from future grants from that funder, or being flagged in your single audit. For mid-sized nonprofits managing multiple grants simultaneously, a compliance failure on one grant can cascade: auditors start looking more closely at everything, funders share information, and your organization’s reputation takes a hit that takes years to repair.

This checklist covers the post-award compliance process from the moment you receive an award letter through grant closeout. It’s organized by the order you’ll need to do things, not by topic.

Step 1: Read the Award Letter and Grant Agreement Completely

This sounds obvious, but most compliance failures trace back to someone not reading the fine print in the grant agreement. Before spending a single dollar, the person responsible for compliance (typically the Development Director, Grants Manager, or Executive Director) should read the entire document and extract:

Allowable costs. What specific line items can you charge to this grant? The budget you submitted with the application is usually the baseline, but the award letter may modify it. Some funders restrict indirect cost rates, cap travel expenses, or prohibit certain categories entirely.

Budget modification rules. Can you move money between budget line items? Most federal grants allow movement of up to 10% between categories without prior approval. Private foundations vary widely. Some require approval for any deviation; others give you discretion within broad categories.

Reporting deadlines. When are financial reports due? Narrative reports? Progress reports? Federal grants typically require quarterly financial reports (SF-425) and annual or semi-annual narrative reports. Private foundations often want annual reports, but the format and deadline vary by funder.

Match requirements. Does the grant require a cash or in-kind match? If so, how do you document it? Match requirements that aren’t tracked from day one become a scramble at reporting time.

Period of performance. When does the grant start and end? You cannot charge expenses that fall outside this window. If you incur a cost before the start date or after the end date, it’s ineligible even if it directly supports the funded program.

Prior approval requirements. What changes require funder approval before you act? Common triggers: hiring key personnel not named in the proposal, purchasing equipment above a threshold, subcontracting work, extending the period of performance.

Single audit threshold. If your organization spends $750,000 or more in federal funds in a fiscal year, you’re required to undergo a single audit (2 CFR 200 Subpart F). This is an annual audit specific to federal funds, separate from your regular financial statement audit.