Quick Tips for Using Program Grants to Build Capacity

by | Dec 20, 2017 | Budgeting, Development/Fundraising, Grant Writing

How many of you are ready to pull your hair out because the grants you research offer plenty of dollars for program materials or direct services but never enough money for staff salaries, marketing, or administrative costs?

I’m going to go ahead and raise two hands here!

“Not to sound ungrateful for the hundred cases of glue, coloring books, and crayons that a donor might love to give my after-school program…but those items are essentially useless if the program can’t afford to pay the program directors and tutors to run the program. Right?”

– client 

If this scenario sounds familiar I invite you to consider the following truths about program grants:
1. Many grantors who choose to only award funds for program supplies want to ensure that they are not investing money in a sinking ship. They have a passion for the cause and want to support the physical needs of the clients you serve but might need assurance that your program is financially stable enough to keep the lights on and staff in place.

2. Many grantors who limit the scope of their program support truly want to see your program succeed and are quite open…and even impressed…when grantees seek creative solutions to build capacity using the grant dollars awarded. 

If you can buy into those truths, it is easier to apply these quick tips for generating operating dollars through program grants.
1. Implement fees for service

Unless the grantor explicitly states that charging a fee for service is prohibited, it is time we stop using grant dollars to offer eternally “free programs.” Many state and federal grants prohibit fees for service due to government restrictions. However, many foundations appreciate that programs that generate revenue are more sustainable.

Charging clients for services might not always be an option. For example, if your program serves the homeless or domestic violence victims, even nominal fees could be outside the clients reach. However, we all need to understand that “FREE is NOT always best!”

Charging a nominal fee ensures that clients buy into the program and they are more likely to follow through on program requirements so that your organization can demonstrate a greater impact!

This past year, I wrote and received $40,000 worth of small foundation grants to fund a STEAM program for a nonprofit that had traditionally provided to the community at no cost. In the program, I indicated that grant dollars would allow the nonprofit to offer discounted and free programming to students in our community. This allowed them to generate dollars through service fees but still provided the needed support so they could offer pro-bono programs to their highest need students. They went from raising $0 for programs to $8,000 in 9 months!

Guess what? The $8,000 we generated from program fees is unrestricted which means it can be used to offset operating costs and build the program’s capacity!

Next year they intend to double that revenue…so you do the math!

2. Team Identity Items Can Generate Revenue

If you run a program that will benefit from t-shirts, water bottles, USB drives, or any other tangible program materials you might have an opportunity to use those items to build capacity. Unless the grantor limits the number of items to the number of clients served (which happens but certainly isn’t the rule) you can implement the following strategy: design colorful team identity items that will generate visibility for your program in the community and buy in bulk to benefit from lower costs per item. If the grant permits you to buy t-shirts, you can purchase them for $6-$7/each and offer them to program participants for free. However, those shirts can be sold to parents and the public for $15/$20/each. That means if you purchase 500 items you can invest $3,500. Let’s just assume that you gift half of those items to program participants/volunteers but you sale the remaining 250 items at $20/each. You just generated $5,000 in unrestricted funds that you can invest back into your program!

3. Strategic use of staff/contract hours

Many seed grants will allow grant dollars to cover the cost of program staff because the program is new. What happens if you are not requesting funds for a new grant and the proposal guidelines indicate that “staff salaries are not in their funding priorities.” Unless they close that door completely it is worth picking up the phone to speak with the program officer.

Instead of requesting dollars to pay staff, many grantors will allow a portion of funds to transition a key part-time employee to a full-time position if you can demonstrate that those extra hours will build program capacity. I recently write two grants to transition a program director from a 30 hr./week to a 40 hr./week position. Both grantors were happy to offset that cost when we explained that those hours would allow the program director to create a new menu of programs current participants and market those new programs in the community (with a clearly stated fee for service) beyond the grant cycle to ensure the sustainability of the program.

If a staff position is out of the question, but you know that current program staff cannot handle the increase of workload without assistance…consider including “fees for professional contract services” into your budget line items. You can seek out a professional for marketing, specific program services, or other tasks that your current staff simply do not have the capacity to address. If you intend to increase your staff in the near future, consider contracting a qualified volunteer/community member who has the potential to transition into a staff member should the opportunity become available through other means!

4. Marketing Materials

We all know how expensive it can get to design and print new promotional materials. When writing a program grant, take the time to carefully consider how you can utilize that program to generate awareness for your mission. Be sure to include a budget line item for the design of brochures, business card, a promotional video, client storybook, program pledge/donor cards, and an end of year impact report.  Many times, we skimp on this line item and opt to have someone in-house complete these tasks. Professionally designed marketing materials that promote your program engage donors, and generate dollars can certainly create capacity for your organization beyond the grant cycle!

The list could go on for miles, but I hope these quick tips help you view program grants through capacity building eyes! Check out these related articles:

Should Grants be Part of Your Fundraising Plan?

Questions to Ask When Designing a Nonprofit Program

Proactive vs Reactive Program Designs


As Always, Keep Growing for Good!

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