Tuesday, October 7, 2014

Five Questions to Ask Before You Write That Grant

So you have a budget shortfall. Your board looks at the financials, panics, points to the Executive Director, and says, "Why don't you just write a grant?" I'm guessing this scenario sounds pretty familiar. But before you write that grant, it's important to stop and evaluate whether it's worth your valuable time to do so:

1) Are the foundation priorities a fit with your organizational mission?
  • You don't want to waste your time writing a proposal that has little prospect of being funded. Take the time to determine if the funders' goals and objectives are a match for your organization.
  • Look at the website for funding priorities as well as lists of previous grants to get a sense of what they are looking for and what kinds of organizations they like to support.
  • That said, never create a project for a grant proposal simply because it fits into the parameters of a particular foundation unless it represents a clearly defined and authentic effort to meet new needs for your constituency within your stated charitable purpose.
2) What are the odds of actually getting funded?
  • Be sure the foundation gives grants in your geographic area, accepts unsolicited proposals, makes grants of a size that is within an appropriate scale for your organization, and actually gives the kind of funding (operating support, capital campaigns, scholarships, ongoing programs, etc.) you need.
3) What's your game plan for the day after the grant period is completed?
  • I know you are all looking for ongoing operating support, but don't kid yourself - those kinds of grants are pie in the sky in our current climate. Know that most grants will be for time-limited project support, although you can usually budget a small percentage (typically no more than 10%) for administrative costs in project grants.
  • So - assume that any grant will be for one year only and plan accordingly, particularly if your project involves any significant increase in staff and programming.
4) Will this grant contribute to an income stream that is diverse?
  • Always seek for a diversity of funding sources, both overall and within income categories (grants, earned income, contributed income).
  • Avoid the trap of becoming dependent on one donor for key support, whether it be an individual or a foundation. Some of the worst financial messes I've seen nonprofits get into were precipitated when a long-time donor or foundation stopped providing funding due to a change in priorities or an economic downturn such as we just experienced.
5) Is writing this grant application the best use of your time?
  • Don't forge to weigh the benefit of receiving a project grant against the extra work required, including not only time spent writing the grant but also written narrative and financial reports.
  • Finally - remember that 75% of charitable dollars in the U.S. comes from individuals (83% if you include bequests and family foundations). A paltry 12.5% comes from foundations. Given your staffing level and/or board engagement, you might be better served strengthening your major donor fundraising efforts.