 Well good morning and welcome to the non-profit show. We are so glad you're here today. We have another fantastic guest from your part-time controller or as we reference YPTC. Denzel Blunt is here. He's a CPA and he's also a manager at YPTC. He's here to bring his expertise, his insights, and his tips to share with you all about federal grant and award. So stay with us because Denzel has got such fabulous experience and expertise to share with us. But before we jump into the conversation with you Denzel, we want to remind our viewers and our listeners across the globe who we are. So hello to you Julia Patrick. Julia is the CEO at the American Nonprofit Academy. Thankfully, for her, I have been six years ago if you joined us for the Green Room Chatter, like the non-profit show has been baking for quite some time. So yeah, so really, you know, four years here we've nearly produced almost 900 episodes and I'm so grateful to serve alongside as your co-host. I'm Jarrett Ransom, your non-profit nerd and CEO of the Raven Group and we are also so extremely grateful to our amazing presenting sponsors that allow us these opportunities to keep the airwaves open and the conversations flowing. So thank you to Bloomerang, American Nonprofit Academy, your part-time controller, again where our guest Denzel joins us from. Also non-profit thought leader, fundraising academy at National University, staffing boutique, non-profit nerd, as well as non-profit tech talk. So again, thank you to these companies that allow us these fantastic conversations that continue to evolve over the years, the months, the quarters. And if you missed any of our previous episodes or maybe you have to jump in late to this one or jump off a little early, either way, we've got you covered my friend. So download the app just if you're watching right now, you can scan that QR code to the right on the visual and it will upload the app and it will also let you know in just a couple of hours that the notification for today's conversation has been placed. We're also on podcast and streaming broadcasts. So we haven't left those platforms. We just keep adding, right? Adding to the streamlines. So yeah, really excited to have these available for all of you, free of charge. And again, thank you so very much Denzel. So glad to have you. I love this photo of you. It looks just like you in IRL, you know, based off of this camera here. But again, Denzel Blunt, CPA manager at your part-time controller. Welcome to you. Thank you. Thank you. And fun fact about this professional photo. It's my first professional photo that's been taken in probably the last 80 years that my current LinkedIn photos are expired. I just took these at our most recent manager meeting, which subsequent was actually prior to, as you can see, my broken collarbone here. Yes. Well, it's go ahead, Julia. I like to think that you were like racing to the printer to get a return report or you were like repelling off the side of the office building to get to a client. Something really fabulous. Oh, Julia, if only it was that exciting. It's honestly much more embarrassing than anything else. Just my wife and I like to get active and play in a wreck ultimate Frisbee League. And again, it's recreational, so it should not be that competitive, but I'm a little too competitive for my own good. So in this semi-final game, I was trying very hard to get a point and fell awkwardly and subsequently broke my collarbone. But the good news, the good news is we did win that game. I got the point and we won the championship. So it was all wasted. I love it. You took your trophy to like the emergency room with you. Well, it's like an honorary Frisbee that has champion won it. So yes, I care with me at all times. I love it. For someone who's competitive, even in musical chairs, I can relate. I totally get it. Well, you have brought your wisdom to the conversation as we talk about federal grants. And I also want to reference a colleague of yours, Derek Drear, that has joined us previously on the show to talk also about federal grants. So, you know, if you were listening when I mentioned that all of these are recorded and available to rewatch, go back into the archive and you can find Derek's conversation. But let's jump into this because as we look at funding for the year, I am really excited to learn from you because Julie and I have been in the sector for quite a while, but we always learn from our guests. Like we all have this hair on fire, you know, mind blown kind of moment. So I'm sure you'll have one with us as well. But I'd love to hear you talk about the communication and what we should do and maybe not do when it comes to communication with our federal agencies or those grand tours. What do you advise in this arena? Right, right. So I actually want to start this discussion off by asking a question just to get, you all can get the audience thinking that if you have a federal grant and you run into a compliance issue or you have a question, who are you going to call? If something comes up and you feel like you don't know what the next compliance step is, who's that person you're going to call? I'd say a lot of people will hesitate to call their federal granting agency, but in my experience, that is the best person, the best group, the best agency, the best anything to call because they will have the most specific answers to any of the questions you have related to your grant's compliance. So one of the best things that you can do when you have a federal grant, as soon as you get that award letter, is to start talking to your negotiator or your grant officer. Because when you have rapport with your grant officer and you start to realize, okay, this person is here to help me. So maybe I can ask some questions when I'm not sure which way to go. Because I can't tell you how many times there have been situations where a client or nonprofit comes to your partner controller, frantically saying, what do I do? What do I do? And we tell them, have you asked your grantor? Because they know all the answers. Or I'll say most of the answers. That's one of the key things you can start doing early is talking to your federal grant officer and building that rapport so that when you do have those questions or concerns, you can just pick up the phone and talk to them. Do you find, I mean, obviously you do because you said, hey, have you talked to the federal agency representative while people hesitant? Yeah. And it's mostly because there's probably this stigma that like the federal government is this all overseeing compliance entity. And then if I make any mistake, it's going to result in, you know, I lose my grant or something like that. But ultimately, these agencies are trying to help nonprofits administer programs for the community. Right. And so if, in my experience, anytime that there's a have a client or even back when I was a controller for a nonprofit, I need to talk to somebody and try and get to get to the right answer. They were like, okay, we want to help you want to help me just give us the information that you're confused about. And let's try and find that right answer. You know, I'm fascinated. And I think this is like, I love that you started this way Denzel's that it's like, you know, the minute you get that approval, you that that letter that says, okay, we're in, we're moving forward to make a call and reach out and begin the communication. Don't wait for a problem, but at least make that introduction. I think that's just super wise because nobody wants to admit that they don't know something or they're worried or that maybe they they're not in compliance. But yet if it's so much easier, if we have some sort of communication path, and no know who to call, I mean, that's just kind of like common sense. But I bet there are a lot of us out there that don't think that way. Yeah. And I think to add to that, Julia is the if you are, if you are worried that you're not in compliance, the best time to talk about it is on the front end with your grant officer, rather than on the back end, when order has come through and identified and reported out that you are not in compliance. So if you're able to get ahead of some of those issues, some of those questions, and take care of them and resolve them before an auditor comes in, then you don't have to worry about having those findings reported out to everybody to see that you're not may not be in compliance. That's a great tip. And, and who should be that person to reach out? Should it be the CEO and executive director? Should it be maybe a development person that submitted the grant? Who should be the person that reaches out with that question? That's a great question. And it may it may depend on how your organization handles kind of the grant application, because what you'll generally see is that you'll have a development person who has the deep knowledge of the grant itself. So that person should definitely be involved in that conversation with the grant officer, but also you should have, I recommend having a finance person who also understands the numbers that it comes when it comes to the grants as well. So those, those two coming together, having a relationship will make the grant manager process a lot, a lot smoother. So I mean, one, I have a million questions, but before we move on, and this is going to seem like a little ridiculous, but when you talk about communications, are you saying like schedule a zoom call, pick up the phone and email? Like, what does your degree of engagement look like? Right, right. That's a great question. And it's really all of the above. When you, when you get that, that award letter is doing a nice little introductory email, but my recommendation is always to just pick up the phone and talk to that person, because that's the quickest way to kind of develop some of that rapport. Ask any kind of lingering questions you might have just to, you know, help the officer understand your organization. So then when you are talking to them later, they're like, okay, this is, I understand this organization. I'm going to help them deliver on their mission. So that having that conversation, building that rapport, I think, in my experience, just picking up the phone and talking to your, to your officer is one of the best ways to do that. Yeah, great tip. I, you know, I find that they really are, whether it's federal, city, you know, regardless of governmental, as well as down to your family, local foundations, those representatives, they really do want to help. Like they're on your side, right, to better support the community. And there's so much fear around and intimidation around making that contact. But I've always found they're really here to be helpful. Yeah, definitely. And if I can, I want to tell a quick story about one of my favorite great officers where I had a, I was a controller of a nonprofit. I had just started with them and we had a negotiated indirect cost rate proposal that was late by four years or something like that. And I had never done one before. So I had to figure out how to get it done. So I didn't know where to go. I was the highest level finance person in my organization. So I said, I have to call my agency. And I, I work with them very closely, put together the proposal to negotiate. And I said, how long is it going to take to get this process done? He said, well, really, it takes six months from submission. But, but since I've already looked at it with you, I'm going to go ahead and just review it right now. So, you know, getting, like I said, getting that report can kind of help you when you're dealing with your agencies and especially when, you know, if you do have something that you need to have reviewed by your agency, like if you're working with them together, they're able to be knowledgeable and understand it and not have to wait the necessary, like six months of reviewing the documents individually and things like that. So having them help you along the process is something that will, I think make the grant management process so much. Wow. I love it. Well, you're speaking of review. One of the things you advise us to, I mean you said, let's start with communication. Such a basic good way to do business no matter what. And I love what Jared said. It's not just federal. It's down the municipal chain. It's through our foundations. It's through our investors and donors. But you really advise us to review those federal grants, spending monthly issues and talk to us about what that looks like. I mean, is this something that we might not even be reporting on but you're still advising us to stay abreast of it? Yes, absolutely. So there are several levels of compliance to come with the federal grant obviously. So the most basic one is going to be your grant spending. You're going to see how much did I spend under my grant and how much grant do I have remaining. But in addition to that, you could have some non-financial requirements that need to be reported out on a regular basis as well. So making sure you're reviewing even the non-financial pieces monthly with your teams will make sure it will help you guarantee that you are in compliance throughout the entire year. So I think it's really important to definitely understand your monthly spending but also understand your other monthly requirements to come with your grant. You know, Denzel, this is a big one for me and I would like to share what I call, you know, like I've seen so many emergencies where an organization, you know, hasn't reviewed their finances for these grants and to stay in compliance for months, right? And so they're backlogged. Maybe it's a reimbursement contract, you know, slash grant depending on how you label that. And I have seen what I, again, like horror stories of agencies not staying on top of this. So I love that you advise monthly and I'm curious, who should we include in this review process? I mean, obviously accounting. Anyone else should be part of this review cycle? Yes. So definitely you want to have accounting and finance involved in that conversation. You want to be reporting that to your upper level managements that could be your COO, your CEO. So they are up to date on the spending as well. But you also want to have your operations team or the program team that is dealing with that grant, because they will ultimately be able to give the narrative pieces of compliance when it comes to that monthly recording. Yeah. Yeah. And I don't often see that happening, right? It's like it happens in this corner and it's not happening, you know, collectively with all of the players, if you will, of the grant compliance. So I really appreciate that. What other tips do you have when it comes to reviewing? You know, I mean, should this be a report that we share with the board as well? Yeah. So I want to take this from two angles. So say you are a nonprofit that has federal grants. The one question you should be asking yourself throughout every year is, do I expect to spend 750,000 of federal dollars this year? Every year you should be asking yourself that question. And if you're tracking monthly, you should know the answer to that question, right? And why 750,000? That's the threshold that will trigger a federal grant compliance audit automatically. And so it's also each nonprofit's responsibility to report to their auditors that, hey, I need an additional compliance audit because I've met the threshold. And so going back to Jared, what you were saying earlier, many, many organizations who have horror stories or disasters or fires because they had below 750 and were really close in prior years, then they got an additional grant and pushed them over the threshold and they weren't thinking about, oh, did we spend over the threshold? Do we need an audit? And the auditors show up and say, oh my goodness, we have to do another audit on top of the one that we're already doing. So that's the expenditure in one fiscal year, correct me if I'm saying this wrong. Okay, of 750 or above, is that correct? That's correct. So within your fiscal year, whether you're on calendar year, if you're off the calendar year, within your fiscal year, if you have spent, underlined, bold, spent $750,000 or more in federal grants, and I emphasize the spent part because it's not how much you've been awarded. You could have a million dollar award and only spend 100,000 of it in your period, in your fiscal year. So make sure you're understanding the spending of these grants because, yes, that will trigger the federal audit. And that's an additional cost, right? That federal audit. Exactly. You know, Jared, I think you said something, and it's triggered a question that I want to ask Denzel. And this was a, you said so often, you know, not enough folks get involved in this process, but we really need to have people moving through our organization, understanding what this work is all about. I've got to ask you, Denzel, do you feel like maybe we haven't educated our teams up enough on how to look at these reports and what we should be understanding, and then it's just easier to say, oh, let those guys over in accounting and finance do it? Because it seems to me that we have this like wall in between a lot of our different departments, and that maybe that's the foundational point for why we're having some problems. Yeah, that's that's a great, great point, Julia. Because, and not just in the federal grants area, there's always this kind of intersection between finance and development, I think in particular. It's kind of this historical struggle of how do we get on the same page about, you know, the numbers? And because development is looking at it in one lens and then accounting is saying, well, according to generally accepted accounting principles, it has to look like this, you know, so like it's it's very important to to definitely bring all those players between accounting, development, operations into the same room on a regular basis to be talking about this recording. And not just not because not just because we want them to be friends, it's also because they all have key pieces in the grant management process. And if they aren't communicating, you know, it is going to be difficult. There are more opportunities for pitfalls to occur. And until your point, Julia, about, are we training our teams well enough to understand these reports? And that is a challenge. That is a really big challenge. Because if you're, say, example, new to a federal award or new to an award with this agency, like that could be completely different than the awards you have with other agencies. And so you may have someone who reads the agreement in finance understands it, you know, from a finance perspective, but they may not be able to develop that narrative that operations or programs would be able to do. And so without that communication, or at least even like having I had one nonprofit had had a great tracking system, they had like a it was very simple. They took an Excel spreadsheet and put all of the non financial and financial requirements. I tagged them with finance programs development. And on a on at least a monthly basis, they would sit down and walk through that to make sure they were everyone understood their responsibilities. Yeah, that's really important. And another shout out to a YPTC colleague, Deanna was on to talk to us about exactly, you know, some symbiotic relationships between finance and fundraising, and how you can really work in a cohesive manner, right, to see those to see those numbers. So really interesting insight. Let's move to negotiate because when I see this word negotiate for federal grant, I think that doesn't belong. Right. I was like, wait, I thought that was before the grant that you can't do this. Yeah. So to talk to us about this, you know, especially perhaps that raised to federally approved rates, which is a story you shared with us about your own personal experience. Right, right, definitely. And so this is, this is something that particularly, particularly if you're new to grants may sound scary, right? It goes back to communicating and the stigma around that. But ultimately, the federal government assumes a 10% indirect rate on all of the grants. I'm going to ask another question here to get people thinking as well. Do I know what my organizational indirect rate is? Because if it's higher than 10%, that means that you're going to be losing money on indirect costs on your grant. And so that's why I highly recommend to try working to negotiate indirect approved indirect cost rate with your grant agency. And so that will allow you to essentially calculate your rate so you know exactly what it is, show it to the agency and say, Hey, this is how we calculate our rate. Can you approve us to get this reimbursement for at this rate, our actual rate for our grants? And agency will review it. And they'll even give you some comments to go back and forth about how to calculate the rate and ask you some questions. But ultimately, the work that it takes to get an end negotiated indirect cost rate is worth it. Because not only does it allow you to recoup more indirect costs, it also gives you more negotiating power with other agencies, also state and local agencies. Because once you have the federal government saying, Hey, we're willing to pay you and we've reviewed in detail your indirect cost calculation, then state and local agencies will look at that as well and say, Oh, with the federal government, we'll do it. We'll honor it as well. Right. And then other That's fascinating. And even in other agencies within the federal government, we'll see that rate and they will honor that also. So it gives you even if you don't find it that you're going to use it on all your grants, at least gives you more negotiating power when it comes to other grants as well. So definitely, definitely worth it to try and get that rate negotiated. And I got to ask you this. I mean, our country, the cost across this wide country, it's so varied. I mean, the cost of operating a nonprofit in the west versus the east, the north, the south, depending on the weather. I mean, you know, this country's in a major heat wave. Think of the number of nonprofits that are just going to struggle to pay even the bare minimums of their utilities during this summer. I mean, how often do we do this? How often do we examine this? Because this is a pretty arduous task. Right, right. It's a great question. And so once you get a negotiated indirect cost rate agreement or a NICRA with the federal government, you have to review that on an annual basis. And so what the requirement is, is six months following your fiscal year end, you're going to submit your NICRA calculation, your indirect cost calculation. And they will review it again and approve you for a new rate for the following year. And they'll give you even provisional rates for subsequent years that you can use until you need to get to those points negotiating with other rates. So it gives you some options for your future rates that you can use. My gosh, all the more reason to partner with YPTC. Federal grants, I think I might have done definitely less than a handful. They're not my favorite. I think I shared that with Derek when he was on as well. And I love federal grants. I absolutely love working with federal grants. And this is fantastic because there's something out there for everyone. And so yeah, I really appreciate this. I find it back to your word Julia, right? Like very arduous. It's for me, it's a heavy lift. It's certainly not my zone of genius, but it sounds like it's yours. And definitely some other colleagues at YPTC, such great information. You know, I know we're wrapping up, but I know that there's a lot of organizations that have potentially seen a huge influx of funding during the pandemic, ARPA funding, you know, all the COVID CARES Act. And then now they're kind of like starting to go the opposite direction. And so I do think, if I had my crystal ball, Julia, that we talk about often like, Denzel, if you had a crystal ball, what would you forecast? I do think that many nonprofits will start pursuing more federal opportunities than perhaps they have in the past. Because of the shortfall. And so thank you, Denzel, for being here, showing up, providing this insight, really, really good information. Yes, no problem. No problem. And thank you for having me, even though, you know, I'm not my full self as I normally would be very excited to be here with both you, Jared and Julia. So thanks for having me. I really appreciate it. Oh my gosh, no, you've been a trooper. I love that we could tease you about being, you know, accounting superhero. But I do love that competitive spirit that you even went to the emergency room with the, you know, award. Yeah, but we won the championship. So I carry that disc with me everywhere. I love it. I'm gonna say you were like sliding into the deadline for the federal grant application because those deadlines are no joke. Yes. I think that's true. I think that's you might have to tweak your story a little bit, Denzel. Yeah, I think the deadline one is good. That's definitely something that we're trying to break. I think that makes sense. Before the like, you know, steel doors just like shut. I love it. I think that's a good thing. Well, Denzel Blount, CBA manager, your part-time controller. Really a fascinating conversation today because I agree with you, Jared. I think that, I mean, I'm hearing it, you know, from the folks that I talked to, people that were like, oh, we don't do federal grants that are now like, you know, kind of looking like knocking on that door. Yeah, I agree. And I think, you know, that we need to have these conversations because it is one of those paths that we're going to start to be seeing more and more. And as we get more comfortable, then of course, I think there are more options. And so Denzel, thank you for sharing that with us. And we look forward to getting you back on to explore this a little bit more because, again, I think this is going to be a topic that we're going to hear more and more about. And it's a changing topic. Hey, everybody. Again, if we hadn't met before, I'm Julia Patrick, CEO of American Nonprofit Academy. I've been joined today by the non-profit nerd herself, Jared R. Ransom, CEO of the Raven Group. Again, we are here nearly 900 episodes strong due to the investment from our folks. And we were talking in the, in the green room, really, Eric Frank, one of the founders of YPTC in the dead of summer in a three-piece wool suit said something to Jared and I about, how do I get my logo on the screen? And it kind of kicked us off in a way that it's really interesting. So, but again, thank you to Blumerang American Nonprofit Academy, Fundraising Academy at National University, Nonprofit Thought Leader, your part-time controller, Nonprofit Tech Talk, Nonprofit Nerd, and Staffing Boutique. These are the folks that join us day in and day out so we can deliver these messages and learning. You know, that's one of the wonderful things about this journey with you, Jared. We really, every, every day I learned something new. I mean, today, you know, Denzel rocked my world on some things that it's fascinating. I mean, every day there's something new to learn. Yeah, I learned I could negotiate after the grants approved. Yeah, the NICRA. I mean, I think that's really an interesting thing. And we need to be talking more about that and building our confidence. I mean, the non-profit sector, we work so hard to achieve our mission vision and values, but yet we can't get there if we don't have this back, you know, this foundational piece of it. And so to get this information and build this confidence so that we can navigate our nonprofits with better stewardship is where we need to go. Really, really important. Okay, my friend, but we need to let you get off so you can go into physical therapy, right? That's exactly where I'm going. Yep. It's not like just doing the calculator. Not quite like that. All right. Well, we're going to stop teasing you because that's just not fair, but but you're going to appreciate the way we sign off every episode of the nonprofit show. And so this goes out to you, Denzel. And that is the message to stay well so you can do well. We'll see you back here tomorrow. Thank you, everybody.