Continued from: Demystifying Grant Seeking Part 2
Myth: Grants are too inconsistent to deserve the attention of fundraising staff
Reality: Grants are consistently useful for certain projects and needs
It is true that foundation grants make up a relatively small percentage of overall giving in the United States. In 1998, they accounted for slightly less than 10% of all gifts to charity, according to the American Association of Fund Raising Counsel. (In contrast, individual donations accounted for 77%.)2
In addition to grants being a small piece of the pie, there are a few disadvantages to relying on them. For example, if you are balancing your organization's livelihood on one big grant, your organization could fail if that grant gets used up or withdrawn. Having a large grant early in its life cycle can catapult an organization through all the difficulties of a slow grassroots start-up, but it can just as easily lead an organization to delude itself about the kind of fundraising it needs to do. Several times, we have been contacted by organizations that were founded with a single large grant, asking us to seek new grants just as their founding money was about to run out. In one case there was less than six months before their entire bank account would be emptied, but their experience led them to believe that a foundation would swoop in from out of state and pay for everything, including the heating bill.
It is difficult to bear bad news, but you will find that one of your most important jobs as a grant seeker is to educate people about the reality of grants ó how long they take to get, what they're good for, and how they should fit in with other kinds of fundraising. Large grants, especially from national funders, can take over a year to prepare and receive. Given current foundation giving patterns and initiatives, there are fewer and fewer national foundations even accepting unsolicited proposals, and there are many things they simply won't pay for.
Under current foundation practices, grants are most often given to: start up new projects; make major expansions to existing projects; replicate successful projects in new locations; meet one-time capital or program needs; build an organizationís internal capacity to carry out its mission; and fund innovative community-wide initiatives and partnerships that join several nonprofit organizations or sectors.
This means there are important areas of need at your organization that will not, under normal circumstances, ever be paid for by a grant. These may include administrative staffing, maintenance of buildings, insurance on your events or your volunteers, and ongoing expenses for a successful program that is not changing, expanding, or spinning off in any way. In addition, foundations rarely fund conferences, publications, or programs that benefit only a few individuals. Applying for grants for these items on their own, without their being an integral part of a larger project that fits current foundation giving guidelines, will nearly always be a waste of time.
With a few exceptions (such as "small grant" or "mini-grant" programs), foundations do not want to be the sole funder of a program or project. They prefer to see you seeking a base of support that includes a range of sources, from other foundations to individuals.
Similarly, funders do not want your organization to become overly reliant on them over the long term, and they tend not to make commitments beyond some two or three year grants. In fact, many will not even consider a grant request that goes beyond one year. Each grant you receive will likely be made for something temporary Ė a new beginning, significant expansion, new building or van, renovated roof, or one-time special project. (This is another reason why we advocate a regular grant seeking effort, to ensure that when you do have new projects and specific needs, you have a system to bring them in front of your foundation donors, asking them to "re-up" their giving by focusing on something new.)
Even when your organization is a good candidate for grants, they can rarely, if ever, be all the funding you need.
In many established organizations, grants are less than 10% of their total income, excluding years when they have special campaigns, such as capital building projects. For many organizations, having a large number of individual donors is especially important. Individual donations tend to be unrestricted (you can use them for whatever you deem your highest priority) and the process of getting an individual donation can be relatively quick -- a phone call or a letter. We've assisted in a few phone bank efforts for struggling arts organizations and have been impressed with their effectiveness, as thousands of dollars were raised by a small team of volunteers in just a few hours. In contrast, a grant can take six to twelve months to come in after a proposal is mailed. So you wonít want to seek grants for an emergency need or program that is slated to start in one month.
So what is the point of spending time on grant seeking? Even given their limitations, grants can be a significant source of revenue for your nonprofit. There are most likely several projects or outstanding needs at your organization that do fit foundation giving patterns and for which you need substantial funding. Your strategy will be to focus on these Ė recommending that other needs be supported by other kinds of fundraising.
Myth: Grants are few, huge, and national
Reality: Grants are most often small, numerous, and local
Media coverage of grants might lead anyone to believe that grants are few and far between, but that when they happen they are tremendous. So if grants are gigantic pieces of money that are given by well-known foundations, and that only touch your community once in a blue moon, why would you want to launch an organized, year-round grant seeking effort?
The reality is that for most organizations, grants are medium-sized gifts that come from the same local and regional foundations every year. When we started grant writing, we were surprised and excited to learn that there were more than 280 foundations -- unsung family and corporate foundations as well as major philanthropic institutions -- in our home state of Oregon.3 It turned out that we could conduct an entire grant seeking effort, appropriate for a regional nonprofit, without once thinking of applying to the Rockefeller, Carnegie, or Pew organizations. After a few years, we began to identify times when it was appropriate to approach national funders, but they were never our primary focus as grant seekers for small nonprofits with local programs and budgets under $1 million.
We have found it useful to divide grant opportunities into two general types: bread-and-butter grants, which are recurring (often annual) opportunities, usually from local or regional sources; and icing-on-the-cake grants, which are large, often one-time opportunities.
Most nonprofits are small or medium-sized organizations that operate local or regional programs. There are likely to be an abundance of bread-and-butter local and regional funders available to them, and with rare exceptions this is where they should concentrate their grant seeking. Similar to the effect of expanding the list of individual donors, this approach moves your organization toward a broader base of funding; if one or two funders are lost, your organization will still have many others, and you wonít be scrambling to raise money when your one big grant runs out. Bread-and-butter grants also provide an opportunity to increase grant income year after year. As long as your proposals are well thought-out, you may be able to apply to the same local foundations year after year with different projects and requests. This way, you slowly build relationships of collaboration and trust.
Icing-on-the-cake super-grants should be approached only occasionally, when you fit the guidelines and the opportunity seems very strong. For example, a major computer company might send out a special Request For Proposals, announcing the giveaway of millions of dollars in equipment for organizations exactly like yours and in your geographic area. Or you might have a truly innovative project that deserves the attention of a foundation with a national scope and mandate. If your request fits the guidelines and your program has elements which make it stand out among the hundreds of proposals that are received each week at a typical national foundation, you may rise to the top and be given serious consideration. You may be asked for a site visit, and might even ultimately receive a grant. But this scenario is very rare for a local or regional program.
Myth: Taking grant funding means "selling out" your program
Reality: You control your programs, and you can select donors that fit with your mission.
As we mentioned, the ill-prepared or episodic grant seeker may struggle to create a program that fits the guidelines of a specific funder when a big grant opportunity arises. Or an organization might approach grant seeking only when itís financially desperate and willing to take any and all suggestions from funders, hoping that if they comply theyíll get funded. Itís not surprising that anyone who goes about grant seeking this way, or has seen others do so, might believe a nonprofit has to sell its soul or corrupt its mission to accept foundation funding.
It is not necessary to work that way. If you conduct a steady, year-round grant seeking effort, you gain control over the process. You select who you will approach as a potential funder, based on any criteria you wish, and you select how much funding youíll ask them for, and when. Since you donít wait until youíre financially desperate, you start from a position of more power, able to decide whether a funding opportunity is worth any requirements it may come with. Proceeding with integrity, you protect your identity and ideals. You also come across as a more stable organization, ready and able to handle grant funding.
When you do receive grants from the funders you have chosen to work with Ė and for programs that make sense given your mission and goals Ė you may find you have little to worry about regarding "selling out." What weíve found is that foundations most often require little more than a good, solid program. They donít often ask for (or sometimes even desire) broad recognition of their grants, unless they are affiliated with corporations. Local or regional foundations that are smaller than the Pews and Gateses usually leave program evaluation up to the grant seeker, asking that you report to them once per year using your own criteria for program success.
The key to maintaining the integrity of your programs lies in your choices about who you apply to and how you work. If you seek grants and other funding consistently, you wonít need to twist and turn your organization just to get money.
What to expect from grant seeking, and this book
Now that youíve dispensed with some of the most pernicious myths about grant seeking, you are ready to jump start an effective grant seeking effort. To get started and get grants, you donít need to stay up all night and write like a nonprofit Shakespeare. You donít need to introduce yourself to the entire civic elite of your town. What you need is not fortitude, connections, or eloquence Ė itís a system. Along with a new attitude about grant seeking, a system will carry you through months and years of productive grant seeking. This book will show you one system that works. Think of it as a road map for your next few months. Its exercises and worksheets will point you on your way.
Don't be surprised if you feel frustrated at first. Like most skills, effective grant-seeking has a learning curve, and there are not many substitutes for putting in time reading and writing. You can expect to make a considerable investment of your time in research, and in filing, before you ever write a single word of a grant proposal. (This is why it isnít worth it to apply for just one grant!)
Fortunately, our philosophy is about minimizing work through consistency and simplicity. Stick with us, and you will only have to do many of these activities once. Other tasks are repetitive, but will become easier and faster as time goes on. By the end of the book, you'll have more than a few grant proposals out in the mail. You'll have your own complete grant seeking system, to speed and enhance all your future work.
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Larissa Golden Brown is co-author of Demystifying Grant Seeking: What You REALLY Need to do to Get Grants, a hands-on, affordable book for beginners to grant seeking.