Every now and then I get a call from a new nonprofit that wants to go out for a federal grant. I think they see the size of the potential awards and are spell-bound.
“Just think what I could do with a million dollars!” they say. “Just imagine how great it would be!”
Well, you know what I say? I say: Be careful what you wish for.
A million-dollar project is going to have a lot of moving parts: staff, space, stuff. IF you can submit a strong application, and IF you can get awarded that million bucks, you have to do what you propose to do — in the allotted timeframe! Would you be ready to implement that project?
And would you be ready to:
- keep track of how you spent that million,
- keep track that you’re doing what you proposed to do, and
- keep track that it’s having the impact you promised?
Really, a federal agency and their grant reviewers would need to see financials and a track record of success at the local and regional level before they would commit federal funds to a start-up. You have to build to the point your nonprofit is ready to take on a federal grant — both from the application stage and the project implementation stage.
Federal applications (and any “large” applications) are going to ask for, among other things:
- multiple years of financial records
- evidence of fiscal health
- matching funds in the form of in-kind or cash
- your programmatic history
- letters of commitment from partners
I’m working on a couple of federal applications right now, for agencies that have been around for decades, and we’ll be working for weeks, devoting tons of staff time from development, finance, and program departments, in service to these applications. The document with just the questions is over 30 pages long. Then there’s the attachments: budgets, work samples, timelines, and other supplemental materials.
My clients have projects locked down and ready to go (but not until January of 2025 when the grant period starts) because they have plans in place. They always have something cooking, because they have dynamic leadership that’s always working three years ahead on the next exciting projects.
And these projects — because they’re well-established organizations — will happen whether they get federal funding or not. They can bankroll it because that’s how solvent they are. They don’t have to depend on the grant money being available.
That’s what federal funders want to see.
Federal funders don’t want to be the only financier of an agency’s program. Being the only game in town makes a federal funder nervous. Too nervous to invest. So you need to have financial back-up.
Kinda ironic, isn’t it? The agencies that need the cash most, can’t get it, and the agencies that don’t need it, get it!
But the moral is, don’t “chase the money.” Don’t be dazzled by the dollar signs. Stay in your lane. Inch forward at a steady pace. Always strive, but don’t leapfrog over several hurdles in the pursuit of federal grants.
In the first place, just applying is a bear. But more importantly, MANAGING a federal grant is a HUGE responsibility. And for small or start-up nonprofits probably necessitates a ton of expense and attention to back-of-house stuff like:
- purchasing and installing accounting software, hiring and managing accounting staff or an outside firm, opening new bank accounts to keep the grant money separate
- hiring program staff, which may mean hiring an HR professional or outsourcing it
- administering background checks if you have staff working with kids
- hiring a program evaluator to track the metrics you named in your proposal
- hiring a grant manager or administrator to track your grant’s deliverables, attend required federal agency meetings, and report on the grant activities on schedule
- hiring a project manager to manage all the project’s moving parts and the relationships with your partners
- finding, purchasing, or renting/leasing additional office space and/or program space
- the list goes on!
All this, and you haven’t even done any program activities yet!
These are all costly things you NEED to put in place, but does the big grant cover them? Check the grant’s RFP (Request for Proposal) for the allowable expenses, because you may see that the big grant may actually COST you more than it’s worth.
This is just to point out that the big dollars come with big obligations. I would instead craft your big, million-dollar plan (on paper), devise your strategies to put the plan in place (including the manpower, brain power, and all resources needed), then think long and hard about ALL the costs involved. Don’t underestimate what people or things cost (now and in the future), and how long things will take. You may even want to source some of the critical items you need.
So when all the pieces and parts come together, you’re ready to hatch your plan, and you’re not caught back on your heels.
I’ve had a client that put the cart before the horse. Their board mandated we raise an enormous dollar figure that year, so we took on the challenge. As an outside consultant, I wasn’t aware of how unprepared they were to launch these newly-proposed programs, how under-resourced they were, and how over-committed the staff already was.
So when we GOT a couple of big grants, one right after the other, the staff was caught off-guard. Suddenly they had to start these new programs, and monthly progress reports and required monthly check-in meetings — and they were scrambling just to get organized. It was not pretty.
Don’t let that be you.
Be true to your mission, and don’t “chase the money” just because you think you need it.
And don’t let a whopper grant opportunity cause you to veer off into “mission creep.” That’s when the money means more than its service to your mission. Stay the course, make sure what grants you go out for are aligned to your mission, and then (and only then) consider that grant opportunity.
Again, don’t be dazzled by the dollars.
Stay solid in your mission and don’t stray away from it because a big grant comes along. I have a colleague with a client that was prone to mission creep (also known as “mission drift”). The client would find a million-dollar opportunity and beg their grant consultant (my colleague) to work on it.
My colleague declined.
Because my colleague, a fellow GPA (Grant Professional Association) member, adheres — as all its members do — to a Code of Ethics, which includes:
Members shall not abuse any relationship with a donor, prospect, volunteer, or employee to the benefit of the member or the member’s organization.
In other words, agreeing to go out for a grant that does not align with his client’s mission would be seen as enriching himself as a consultant — getting paid for work he knew would not get funded because of its inherent mission drift. It would be abusing the client’s naiveté and desire for money.
Saying ‘no’ to work is “work.” Consultants — the ethical ones — have to work all the time to infuse ethical standards into what they do, with clients and prospective clients. They have to teach every day about how they don’t work for a percentage of the grant award, or a commission or a finder’s fee. They don’t share proprietary information, or work in a conflict-of-interest situation.
There’s that and lots more to keep in mind all the time for consultants, as pertains to ethics. Having those standards in the Code of Ethics makes it easier when a questionable circumstance crops up.
So if the small or start-up nonprofit with dollar signs in their eyes gets turned down by a consultant asked to go out for a big grant, it’s only because the consultant sees ethical trouble ahead.
Read the Code of Ethics, and remind yourself of its tenets before you leap into a dubious situation, one that smacks of “if it sounds too good to be true, it probably is.”
