A new client recently was awarded a small grant. I congratulated them and asked if the grant would cover all the program’s expenses, or if gap funding would be needed.
Gap funding is exactly what it sounds like – funding that covers the “gap” between what the grant covers and what the actual program’s costs are. Gap funding keeps the organization’s operating budget (not a bottomless piggy bank) from being bled dry.
A great use for grants is “budget relief.” If program costs — in any form – are coming out of the organization’s operating budget, or are costs buried in payroll or some other mush-pot, they CAN still be eligible for a grant. In my new client’s case, another grant for that same program can be found (that actually covers salaries, for instance) and would keep the organization from incurring ANY expense.
Even if your org’s expenses are expected to be the “match” the first grant requires, you can still cover that match with another grant. A “match” can be in-kind, or cash donations, or income from ANY other source – including GRANTS!
Which leads me to ask, is there a “gap” in what the program’s reported costs are, and the ACTUAL costs are? Is finance (or whomever is pulling that program’s budget together) including ALL the program’s costs to the agency? I’m talking:
- staff time, or portions thereof, of everyone from the ED to the outside consultants to the cleaning crew?
- Or lost staff time?
All the hidden, or seemingly incremental, costs like:
- added transportation the agency ends up reimbursing for,
- or lost revenue from the program taking up the space you used to rent out,
- or that rider you have to take out on your insurance policy.
These are just examples, but they’re meant to illustrate how deep you need to think to come up with a program’s costs. Think instead about its costs TO THE AGENCY.
And think about additional grants to go out for to cover those costs. Better yet, be mindful of the real costs of your program when you apply for any grant!
For more on this and other grant topics, visit my website.
