If your organization is reliant on grant funding, you’re in a precarious position. Grants, large and small, can be transformational for an organization. The problem comes when you start acting on that transformation before you actually win the award.
Why grants are risky
Here’s some of the feedback we got on a recent federal grant proposal:
Strength:
The applicant organization presents a well-written overview of its services … and provides a clear description of its mission for the target population.
The application effectively describes the chosen allowable activities as being directly responsive to identified needs in the rural service area and target population.
The applicant organization describes its thorough knowledge and understanding of the target rural service area and target population to be served by this project.
Met:
None
Weakness:
None
This is page one of seven. Seven pages of feedback and not one weakness listed. Overall, the proposal scored a 92/100. Think we got the grant?
Nope!
The lesson
Grant funding is never guaranteed, even if you submit a flawless proposal. This is why planning your organization’s finances around pending grant applications is risky. There’s too much competition for too few dollars. I’ve applied to grants alongside 600 or more competing applicants, only to learn later that just 17 proposals were approved for an award. Put another way, only 2.8% of applicants were successful. Harvard and CalTech are less selective.
An overreliance on grants creates an atmosphere of uncertainty that contributes to staff burnout and leaves organizations struggling to fulfill their mission.
Does this mean you should give up on grant funding altogether? No. But it does mean you can’t let grant writing replace fundraising efforts.
Grant writing in perspective
Grants come in big chunks and are best used to support specific projects or programs. They can help launch new initiatives or expand current work to serve more people. A well-written grant proposal that meets the application requirements is the price of admission. It opens the door to being considered, but it won’t win the grant.
Here’s what will:
- A thoughtful, well-designed project or program
- Strong alignment with the funder’s interests and the purpose of the grant
- A stable organization with a proven track record
- A solid sustainability plan
- Luck
Building a strategic funding plan
Building a budget based on projections is difficult and necessary. All we can do is make our best guesses, identify key priorities, and put appropriate safeguards in place so that we aren’t left scrambling when a grant gets declined. Effective, consistent fundraising can give you a dependable baseline. It’s what fills up your general operating fund. It’s what pays your staff.
Some strategies:
- Define what it means for your organization to be stable and sustainable. Know how much you need to cover baseline organizational operations. Ask yourself: What project, programs, and staff are essential to keep the organization alive? Use the answer to create a baseline operations budget. This is your minimum fundraising target.
- Cultivate a money mindset that allows you fundraise effectively. Fundraising isn’t begging. Think of it this way: When you ask for a donation, you are giving that donor an opportunity to support a cause they care about. That is a gift.
- Focus on building a strong donor base as soon as possible. Engage with the community. Communicate your vision. Care for the people who help push that vision forward.
- Diversify your funding streams. If a single pillar is holding up the entire house, that house will be pretty easy to knock over. We build houses with lots of smaller studs and beams so if one fails, it won’t be catastrophic. Use the same approach when developing your funding strategy.
The path to sustainability
Funders know that grants eventually end and that new grant dollars are never guaranteed. That’s why every grant application includes a question about sustainability. This question needs a real answer, not platitudes about applying for more grants and raising money from the community. It a question you’ll need to consider as you are designing the program.
Funding is the foundation of all of our work. The work can’t continue without it. That’s why fundraising needs to come first.
Fundraising sustains. Grants help us grow.
Need help building a funding strategy that works for you? Let’s chat!
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