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Before You Leap: Weighing the Benefits of Grants

Resource Center - Foundation

(June 14, 2011) Applying for a grant might seem like a great way to fill a gap in your organization's funding. In reality, however, grants are usually part of a larger plan over the long term. Here is some helpful perspective on the world of grants that might save your organization valuable time and resources.

"Grants are not meant to be nor should they be a quick fix," says Amy Wolfe, MPPA, CFRE, executive director of AgSafe in Modesto, Calif. "The spirit of grantmaking is entrepreneurial: What new project or program have you come up with, and how can it become self-sustaining."

Funders want to invest in something that brings about better ways to solve problems. And they want the project to quickly take on a life of its own, attracting funding from various sources and not something that depends on grant funds. Funders want to plant a seed--they want to invest in something bigger.

That means expressing your organization's dire need for funds in order to continue might very well fall on deaf ears. "The first challenge is being aware that funders approach grants with a long-term view and an eye toward innovation," Wolfe explains.

However, there is something deeper happening in the grant world that nonprofits need to be aware of, and should be mindful of when considering going down the grantseeking road, Wolfe says. There is an ever-greater demand that organizations prove that their project will have measurable impact--before the grant is even awarded.

More Than Meets the Eye

With the creation of the Recovery Act, the U.S. federal government expects grant seekers to come to the table with a project-ready plan--something that is fully developed and thought out, Wolfe explains. This has set the standard for other types of funders.

As a result, your organization needs to have far more than just qualitative evidence and compelling stories about the good that your organization does. You need to propose a project that is unique and new--one that is thoroughly fleshed out--plus a detailed and convincing method for measuring success.

"Simply having a head-count of the number of people served is not enough," Wolfe says. "A funder expects you to quantify your program's impact and prove that it will be greater than other programs out there already."

This process requires substantial staff time and resources before you even put pen to paper and apply for a grant. If you receive the grant, the demands on your staff continue as you report on your progress.

"You really have to do your due diligence to determine the funder's reporting requirements and what are their expectations of you," Wolfe says. "Some people get so excited that they qualify for a grant that they forget to ask the important questions."

Just as you wouldn't jump into a capital campaign before assessing the costs and benefits, and taking a hard look at feasibility, it is just as important to look before you leap into applying for a grant.

What You Bring to the Table

If you determine that your organization has the proper data collection and reporting systems in place to prove a project's merits and track its long-term success, there are a two other factors that Wolfe urges organizations to consider: Sustainability and cross-collaboration.

Sustainability means committing serious brain power toward the question of how the program will be funded into the future, Wolfe explains. Will it be a fee-based program? Will you receive corporate support? Organizations no longer have the luxury of figuring out how to continue to fund a new program when the grant money runs out--without a solid plan, the grant money won't arrive in the first place.

The second big question a funder will ask is "Who are you partnering with to make this program a reality?" The funder wants to see that their money will be maximized with collaboration from local government, the local business community, and other key constituents.

Where Do You Fit?

Wolfe explains that another key element of being successful in the grant world is to realize that your organization does not exist in a vacuum, but is part of a larger network of organizations, businesses and government entities.

Be aware of your "competition," i.e. other nonprofits serving similar constituents or carrying out similar programs. "Funders want you to have a clear grasp of your place in your community and what makes your programs and services uniquely suited to meeting community needs," she says.

Competition is coming from more than just other nonprofits nowadays. There are government programs and for-profit organizations who are stepping in to meet needs. What makes your organization the best recipient of funds? You'll need hard data to back up your answer. As Wolfe puts it, "You have to count the right things the right way."

In the end, grants--compared to gifts from individual donors--occupy a different world and often with a different set of rules. Once the gift has been received, there is a much more formal reporting process involved. Grants are great for certain organizations and certain projects. A wise organization asks this of the grant option: Is it worth the time and money?

For more information, visit the AFP Hot Topic page on Grants at  www.afpnet.org/HotTopic/Grants.



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