Your ministry will likely continue or develop a need to count on foundation grant support for your programs and projects. Yet funding is not always easy to come by. This makes expanding your grant writing capacity all-important. You need a strategy. The following are four key components of an effective strategy.
Explore collaborative grant writing opportunities for joint and/or regional grant applications. Partnering with local stakeholder organizations improves your ministry’s chances of gaining funding and reduces your grant writing costs.
Foundation support specifically for collaborative efforts is rising partly as a result of the economy. But even before the economy turned downward, foundations were supporting collaboration. Collaborative efforts are by no means easy and they can be quite difficult. Done right, it is well worth the efforts and can result in a significant win-win situation for ministries concerned. The reason is simple — collaborating organizations address problems more effectively as a team rather than as independent organizations. Their programs benefit from more diverse expertise and ideas, from more people being involved in the program, and from more people lobbying for the program in the community and enlisting others to do the same.
Under collaboration, your ministry avoids assuming all the grant development costs as the expenses can be divided among all the partnering organizations. It is a cost efficient way to grow the funding pie for the ministry and local partners engaged in like-minded efforts.
Budget appropriate funds for grant writing related expenses. For many ministries a grant writing budget will include a fully staffed grant development office along with all of the appropriate tolls, resources, and research databases. However, it is not always necessary or most cost effective to employ a full-time grant writer and associated staff. Often a grant writing consulting agency can meet your needs while provide a significant savings to the ministry. But it is a mistake for ministries not to make a budgetary commitment to grant writing. Avoiding this commitment may save money now, but it will rob your ministry of the grants it needs now and later.
Having resources to secure grant writing expertise is especially important because the economic slump, depressed stock market, and government budget crisis have reduced government, foundation, and individual funding. This means that only the most well developed grant strategies will see success.
When possible, maximize opportunities for operating funds in grant applications. Ministries generally have access to two types of grants: 1) project-specific funding; and, 2) general operating support. Funders tend to like the first, but not the second.
Nonprofits need operating support. An out-of-date computer, for instance, hinders your ability to make your programs and projects run effectively and efficiently. But funders prefer project funding because it lends itself more readily to measurable results and outcomes.
One option is to include an indirect cost line item in your budget for all grants and RFPs that allow indirect cost reimbursements such as general operating support. Including indirect costs allow ministries to offset general operating costs. Many government funders allow for this type of expense but most private funding sources do not. Acceptable indirect rates usually range from two percent to 20 percent per grant. Ten percent is about average. But often this rate must be prearranged with the funding source.
For private funding sources, it is best to submit a highly itemized budget that makes a strong tie between items that may be considered indirect and your direct program related expenses. Indirect expenses can often be accepted by a funding source when they are tied to the program. For example, it is often impossible to implement a program without appropriate staff. A computer may be essential for student to use for research or for job searches.
Another strategy is to turn to long time funders, those you have a relationship with and those who know your ministry well enough to have confidence in it and its programs. Family foundations and individuals in your community are the top candidates to support operating costs. Use your board to play a leading role in encouraging this support.
And there may be good news concerning the future of operating support. Encouragement is coming from various quarters. The Independent Sector urged foundations to “opt for general operating support over project support when feasible and when the goals of the two organizations are substantially aligned.”
As well, the Center for Effective Philanthropy urged foundations to fund not only projects and programs, but to provide “larger, long-term operating grants” of unrestricted funds, those that support the entire mission of the organization.
The Center for Effective Philanthropy also urged foundations that provide project support to pay “the fair share of administrative and fundraising costs necessary to manage and sustain whatever is required by the organization to run that particular project.”
Say “No” Sometimes. Some nonprofits apply for as many grants as possible, becoming all things to all funders. They think that if they throw enough proposals out there something is bound to stick, that this is the best way to win grants.
This is a fallacy and a trap too many organizations fall into. You have heard it said, “Watch out what you wish for.” In this case, watch out who you send proposals to. You may end up winning grants with fulfillment requirements that go far beyond the scope of services currently provided and/or do not fit in with the organization’s mission or vision. It is a zero sum game. The organization gets more money but it also has to provide more services. The funding pie grows but so does the mandate. This is the time for the ministry to say “no,” that winning this particular grant is not worth it.
Keep in mind that having a grant writing strategy is critical to getting the funds your ministry needs. Yes, the funding environment is challenging right now. But the funds are out there and foundations are eager to partner with ministries such as yours to do what you were both created to do – to change your community and the world for the better. Follow the advice above and foundations will begin to see your ministry as a more appealing funding candidate.
