Is it true that grants = free money? It is certainly true that all nonprofits need money to advance their mission, and those big dollar signs you see in the news tied to grant awards are so appealing. All you need to do is write a proposal, submit it, wait for the check to come in, and then your programming can take off! Right!?
Well… not really.
While grant funding can be incredibly useful to expand capacity or improve quality, it takes strategy and preparation to get the best out of your grant-pursuing experience. Organizations often overlook the hidden price of applying for grants, and it can end up costing them big time. Every dollar spent on a contractor or employee to search for grants, craft proposals, and gather information is another dollar that could go towards programming. Then there’s the amount of time it takes to hear back on funding, which may leave your program in limbo for months. Make sure you are well-positioned and competitive to apply for grants before you even start the search for grant opportunities. If you are not, it is almost a guarantee that pursuing grant funding will drain organizational time and resources that could be put to better use while not yielding the boost that you are seeking.
Let’s talk about when grant funding is not a great fit.
These are “square peg” moments when you are trying to fit the square peg of grants into a circle-shaped hole in your budget. The most common square peg moments are:
(1) Your organization and program lack other sources of income besides the proposal you are writing. If you cannot assure the funder that they are not the only source of income, most will shy away. Funders would like to know that if they disappeared tomorrow, your program would still be in existence. They also want to see a history of successfully managing other sources of funding.
(2) Your organization and program lack proof that it works. Most funders (and especially any government funders!) are not the world’s greatest risk takers with their money. They are considering investing in your organization and want to see some evidence that your organization’s service delivery works. Even if you are using a national model, they still want proof that you can carry out your services.
(3) Applying for grants as short-term emergency funding. Between the writing process, proposal evaluation process, award announcements, and fiscal year restrictions, many grants can take 10-12 months from the moment you begin writing to when you actually see the money. On top of that, funders typically want to avoid being the stop gap in a budget that is in the red. While some funders may be quicker and some are set up for emergency funding, they are generally few and far between.
If any of the above conditions apply to your organization, reconsider using your valuable time and focus on other, quicker, resource development strategies such as individual donations or developing an earned income stream while building your programming.
How can you be grant ready?
Below are conditions you should strive for before pursuing grants:
(1) You have established the organizational basics: a sound mission, vision, and goals; committed board members, capable staff/volunteers; appropriate tax status; and a solid budget/financial plan.
(2) You have secured other sources of income and resources. When it comes to funding, appealing to your local community through fundraising campaigns and volunteer-drives can bring in resources much more quickly. A bonus to this approach— very few people in the community ask to see your budget, logic model, or five-year plan! If they feel connected to your cause, they will give to it. This income also acts as proof to funders that you have broad support, and the community values your programming, and people trust your organization, making it easier for a grantmaker to do the same. Tip: when considering your resources always remember your in-kind “income”— that is, people’s time, things, and space that you don’t pay for have value and can be used as leverage in a proposal.
(3) You have data that your program works as intended. Just because you do not have the budget to hire a data analysis firm or you don’t have years to perform research doesn’t mean you can’t start getting some information right away. As soon as you start putting your programming into action, you can start collecting data. It can start with simply asking who is showing up and how satisfied they are with the program. As you gain more resources, you can become more sophisticated in your data gathering efforts and really measure your impact. To start, make sure you focus on relevant data that your organization has the capacity to collect in the most meaningful way possible.
(4) You have thought strategically about why you need funding. Once you have started gathering resources and data, even if it’s simply volunteers and client satisfaction surveys, you have a baseline. Now start asking your staff, board, and clients where they would like to be in one year. What is an acceptable satisfaction rate for clients? Is the program expected to improve the lives of clients, and if so, outline a tangible way to measure (e.g., 95% of clients experienced improvements in their lives, as measured through surveys)? Is there a desire to increase the number of clients served or to design more rigorous data collection methods? Whatever it is, figure out your stakeholder’s top priorities, aim for a reasonable one-year goal, and figure out what resources are needed to get there.
When it comes down to it, satisfying these conditions are proof to funders that your organization is run effectively and is making a difference.
To sum, before you jump headfirst into grant-seeking as your main strategy to build up a budget, stop and think strategically just like you would when developing a new program or organization. Don’t waste your time or your staff’s time, by going after grants when you aren’t ready yet. Instead, put those resources towards becoming grant-ready—which can have the positive side effect of making your organization stronger and more resilient through diversified funding. It will set you up for success for years to come and improve your organization’s capacity and effectiveness overall.
This post was filed under: Grant Writing