by Mandy Pearce
Are you new to nonprofits? Possibly you are a founder looking to increase funding for your organization? Maybe you are a development director searching for ways to raise capital dollars, buy a new piece of equipment, or fully fund your overhead?
Regardless of where you are beginning, grant writing is a journey on all fronts. Funding For Good has been in the grant writing world for over 23 years and we have been where you are, and understand the difficulties you face with lack of time and resources to grow your nonprofit business. As a result, we write blogs, create videos for our YouTube Channel, provide a Free Stuff page on our website with downloadable templates, and field questions on ourFacebook page to provide as much free guidance as possibly for grant writers in all stages of development.
Today we are going to talk about where to start on the grant writing journey. How in the world do you get your feet wet, where do you find foundations that want to fund you, how much should you ask for, and what type of documents do you need in-hand to begin? Let’s jump in.
The question of the day today is: Should you start writing grants, and if so, when, for how much, why and to whom?
It might surprise you to know that many nonprofits do not, and never will, apply for grant funding. So, the short answer to the question about if you should write grants is, it depends on your organization and your current and projected needs.
Grants exist in the nonprofit world for a reason. There are some ideal times to write grants and I encourage you to learn about those times, and determine what is a good fit for you, your programs/projects, your time availability to apply for and manage grants, and your desire to implement additional diversified funding streams to your budget.
I have worked with nonprofits that have been around for 50 years and are just now venturing into the grant world. They usually take the journey because of the economy, but not because they want to rely on grants.
Don’t assume just because you are a nonprofit organization, you are ‘suppose’ to apply for and rely on grants. That is not the case. Many experts in the field agree that a healthy nonprofit should never depend on grant funding for more than 30% of its’ total operating budget.
Consider these 6 thoughts when determining your organization’s readiness to apply for a grant:
- If you are in a place where you have met your capacity (staff, space, program, etc.), it might be time to look at capacity building grants to grow, build, or expand.
- If you have an upcoming capital campaign, you may consider making grants a portion of that campaign to ensure its’ success and speedy completion.
- If you are in a field where long-term funding sources have been cut or eliminated, you may need to look to grant funding until you can rework your game plan for sustainability.
- Additionally, you should never ‘create’ a program or project to fit a grant you have found. Decide on your needs, list them, associate a dollar amount with each need, understand them, and then research grants that match those needs.
- If your organization has a budget or a previous year’s budget in the ‘red,’ you may not want to begin writing grants until you have a few years in the ‘black.’ Donors will see you as a risk and often times will not look favorably upon your request.
- If your organization is in its’ infancy, you may find seed money to support your work. Often donors require organizations to demonstrate a history of success before considering granting funds. In many cases, donors may require 3-5 years of successful programming.
There are many nuances to consider before beginning to utilize grant writing as part of your annual fundraising plan. But, there is also a lot to consider each year before you decide to continue grant writing in your fundraising plan, removing it, decreasing the dollars you hope to raise through grants, or reducing the dollars you need overall.
All too often people think of grants merely because they qualify to apply as a nonprofit or they are under the impression that grants are ‘free money.’ These are both bad reasons to add grants as a revenue stream for ANY organization.
If you are creating programs or projects to chase grant dollars, that is not the right order of operations.
Successful grant writing begins with successful grant research.
Finding the prospects whose priorities are well-matched to your current needs. How do you do that, and why?
Some folks wait for grant opportunities to fall in their lap or pop-up in their inbox. Successful grant writers go out and search for the opportunities that match their needs and create a plan for writing, submitting, and managing those grants.
The first step in securing for grants is identifying needs, then doing the research, then reaching out to the foundation, and then writing and submitting proposals.
Effective grant research is a task that takes a while to perfect. There are some simple steps you can take prior to starting the research process that will save you time and frustration, as well as uncover the best prospects for your needs.
Consider incorporating the following items into your grant research process:
- Create your needs list. – Sit down with program/project staff and generating a needs list for the next year. Some of these items may be organizational in nature too. What are the things that rise to the top as far as need, and then what are the ‘wants’? Create a list and narrow it down to the ones your leadership feel should be goals for your next 12 months.
- Identify the cost associated with each need – Not only is it important to know your needs, but you must know how much they cost. It is very difficult to successfully identify prospects when you don’t know how much you need them to support. Many foundations list restrictions on award amounts, percentages of project costs they will fund, etc. If you start research without this data, you will not be able to exclude prospects whose parameters are outside your need.
- Find out when do you need the money in-hand – For each need you identify, you also need to know when the money has to be in-hand so you can look at grant deadlines, when grant proposals are reviewed, and when dollars can be expected. Some foundations will allow you to pay yourself back if you spend money before the check arrives from a foundation. Many will not. This is a question you need to ask prior to submitting a proposal. If the dollars won’t come in time for the project and you can’t pay yourself back for the expense, should you apply for the funding? Probably not.
- What is the program/project geographic focus – In order to determine which prospects might fund your project, you have to know your service area. It is one city, county, multi-county area, region of a state, a state, national? Once you determine this information, you can even search by foundations who fund organizations in those specific areas.
- What is the organization’s total operating budget – Do you know the organizational operating budget of the groups for which you are writing grants? When researching foundations, many have limitations based on the operating budget. Some may say they only support organizations with operating budgets of $250K or less, or organizations with operating budgets of $1 million or more, etc. If you don’t know the budget, how you can determine if these foundations are a good fit?
- Who has supported the organization in the past – It helps to know which foundations have supported the organization in the past so there is not a duplication of results. Additionally, with that list, you can research when the last time was that they gave, how much, for what program, and if your group is eligible to apply again or not.
- Who has declined a proposal in the past – Just as important as knowing who funded your group is knowing who declined to fund your organization and why. Maybe a proposal was declined, but your group was encouraged to apply again the following year. Maybe a proposal was declined because it was a bad match, but now you have a better match. Perhaps a proposal was declined because the organization wasn’t a good fit for the foundation. Knowing all of this information will help determine if you should or should not reach out to a foundation again and follow-up on a new proposal. Many times this information gets lost in staff transitions. Especially for groups who are not working with donor software and tracking these types of notes. Too often this kind of historical knowledge leaves with the staff who knows it.
Grant research is a lot of work. If you prepare ahead of time and get the answers you need to be successful, you might be surprised at how much you can find and how quickly.
For a complete Pre-Research Questionnaire with questions to ask before you begin your research, you can download the list we use when conducting research for clients here: https://fundingforgood.org/
Now that we’ve covered some research basics, what do you need to know before you start writing?
Would you love to have a checklist of the most requested documents, the required documents, and the data you will likely need when working on grants?
To make my life easier when working with clients, I created a Grant Readiness Checklist that makes compiling necessary data easier. This list has saved me so much time over the past few years and helps my clients get organized which saves them time once they begin writing as well.
What’s in this list you ask?
I break down the areas where foundations will request additional information to six key areas. Then I list the most popular items needed in each section with checkboxes. I create this worksheet for myself with new grant writing clients, or with new coaching clients. I create a folder in my computer titled ‘Grant Documents’ and then create subfolders for each heading. As I create or locate the documents needed, I save them in the corresponding folders for easy access.
The six headings I use are:
- Organizational Background
- Tax Documents
- Financial Information
- Program/Project Information
Under each heading, I have items listed such as:
- History of the organization (narrative)
- Year established
- Mission, vision, values statement
- Tax Documents
- Tax-exempt status letter
- Detailed organizational budget
- Financial Statement
- Board of directors (including affiliations and contact info.)
- Organizational chart
- Current strategic plan
- Detailed program/project description
- Number served in the previous year
- Current outcome measures
- Letters of support
- Percentage of the board giving financially
- Solicitation license (where applicable)
This is not the complete list but should give you an idea of the type of information that is included. Creating these files for easy access now will save you and your team a lot of time and energy when you are ready to work on grants for programs, projects, capital campaigns, or general operating funds.
If you’d like to have the full Grant Readiness Checklist so you can get started organizing your files today,CLICK HERE and we will email it over to you in an editable Word document. I hope it helps as you work now to make next year a little less hectic.
Hopefully today gave you some insights into planning for a successful grant writing journey. To learn more about how Funding For Good can help you along your grant writing journey, schedule your 15-minute vision call with Mandy and Marie here: https://fundingforgood.org/
Keep growing for good.