Before launching into a grants campaign with your nonprofit, your board needs to make certain they understand the ramifications — the good, the bad, and the ugly — and decide if they have the stomach to ride what can be a very long and bumpy roller coaster ride.
- Grants take time, attention, and an investment. Someone needs to always have their eye on the ball — for application and reporting deadlines, for the managing of awards, for assessing probability, for cultivating and stewarding those relationships, etc. That person or persons need to be paid, and the grants can’t be part of how you pay those people.
- Grants can be fickle. The strongest, most airtight proposal may still be turned down, due to circumstances beyond anyone’s control. Funders can shift priorities, their boards can turn over, the environment can change the way they fund and who they fund.
- And grants can be work, for more than just the grant writer. What may seem like the entire agency may need to be involved on some level or other — program people, Finance, marketing, IT, HR. And external partnerships may be called for as well. A simple grant application may balloon into a city-wide endeavor, with your agency at the helm. Are you ready?
To start off with a grants initiative within your nonprofit, its best for the board to take stock, and ask themselves a few telling questions. What would come out of this exercise may foretell what success you may have with grants. Or, it may steer you towards not heading in the direction of grants at all, at least not at this time. Take a look at the questions below, and the ramifications of what your board’s answers might be, so you can assess if grants are right for your nonprofit.
1. What would you say is your current level of understanding/experience with grants?
a. HIGH. If you currently have a development committee within your board, you should be in great shape to add grants to your fundraising overall. If your organization is already cultivating and stewarding relationships with individual donors, or perhaps corporate sponsors, then grants will seem very familiar.
b. LOW. If, however, your organization has little to no experience or understanding of what a grants program actually involves in terms of the needed time and monetary commitment, then it may be time to step back. Next steps may be to:
i. get a better grasp on what responsibilities there are around not only applying for, but also managing grants
ii. get a better sense of how compliance and risk mitigation could impact qualifying for grants now and in the future
2. If you were to add grants to your development plan, would you be willing to open doors with any foundations or corporations with giving programs where you have relationships, or make a cold call on behalf of the organization?
a. YES. Board members are the “top tier” volunteers of a nonprofit, and their commitment to the organization and its mission speaks volumes to anyone they may approach on behalf of that nonprofit. If you have a board or members of a development committee doing the relationship work needed for the rest of your fundraising efforts, then you’re in good shape to build grants into your development plan.
b. NO. If, however, your board hesitates to share their enthusiasm of the work your nonprofit is doing with their circle of friends, colleagues, and acquaintances, then that hesitation spells trouble. Instead of thinking about a grants program, you should:
i. Make sure your board understand that they would not be required to “make the ask.” Many are adverse to “asking for money,” and they should be assured that “closing the deal” is the job of the ED, or Development Director.
ii. Make sure your board has an opportunity to role play, is conversant with the agency’s mission and how it’s being carried out, and gets comfortable with weaving the work of your nonprofit into daily conversations with others.
3. What programs do you have in place currently at your organization that you feel are fundable with grants? Why do you feel they are grant-fundable?
a. Be sure you and your board ask yourselves if there are programs the agency is carrying out now, or plans to in the near future, that would be of interest to funders. Make sure you can also articulate the reason you feel that way. Not all programs are fundable, but they should ALL align with your mission.
b. Not sure if you have fundable programs? Fundable programs are a match with prospective funders if they are aligned geographically, budgetarily, and most importantly: impact-wise! They have measurable outcomes that show they are making the difference you intend. There’s (at least) one fairly low-risk way to find out. I advise my clients at these kinds of crossroads to:
i. Put their program(s) through the Logic Model process. The Logic Model will show if the proper resources and activities are being put towards the most impactful objectives, in order to reach the program’s ultimate goal. More on the Logic Model can be found here, or my Unlock-Grants course devotes an entire module to this foundational principle.
ii. Once you know you have a fundable program, outsource some prospect research to find if there is enough aligned potential grant money out there to make pursuit of grant dollars worthwhile. Then, when you have your data, pick up the phone, start a relationship with those identified funders, and confirm there really is interest on their part.
4. How much time and money are you willing to invest in a grants program until it can bear fruit?
a. Grants take time. And time is money. If you’re willing to wait a good 18 months or longer for any grant income, then you should be OK! The time it takes to produce a strong application, then lining up with funder deadlines, sending out an LOI (letter of inquiry) or full application, then waiting (the sometimes several) months it takes to receive notification, all has to occur before you can spend any of the grant dollars you seek.
b. But meanwhile, you will be shelling out for a staffer or consultant to continually pursue new opportunities. And many grant funders are reticent to grant an organization they don’t have any track record with. You may need to keep doing good work that you can show them when you reapply in Year Two. Then they may award a grant. But in any case, the grants game is still highly competitive.
5. How much return do you expect from a grants program once it’s established?
a. If you’re in the camp that thinks you can apply for and win a million-dollar grant right out of the gate, then you need to get a reality check. Awards in the millions from The Gates Foundation (and the like) are a fairy tale that only happens for the tiniest sliver of the hundreds of thousands of nonprofits out there. A grants program that’s just starting out is going to need to play the long game, and expectations need to be in line with the probabilities of a win in a highly competitive landscape.
b. Once your grant program is established, it is not plug-and-play. Funders need stewarding, and you risk not being awarded next year if you skip this crucial step. Even with all the relationship building work put in, you still cannot be guaranteed of the same grant being awarded year in and year out. Therefore:
i. Keep your pipeline full to guard against attrition. New funders and funding opportunities need to be constantly identified, vetted, cultivated, and nurtured. Sometimes funders adjust their missions, so keep revisiting current — and searching for new — funding sources.
ii. You need to watch for funding trends, such as what occurred in the wake of the pandemic, and the period of social unrest we’ve experienced in this country. The tide can turn more to basic needs and social justice concerns, and if you’re not in that group, you may be out of luck with your grant funding for a while.
A nonprofit board has the ultimate fiscal responsibility for the organization, so addressing these questions head on is how they can arrive at a sound go/no go decision on grants, with eyes wide open, and stay the course when the grants game doesn’t turn out to be a quick buck. For a great resource on nonprofit leadership and board best practices, turn to BoardSource.
