How to Position Your Organization to Have the Best Chance of Success at Grant Writing

While there is enormous competition for every grant dollar, there are many things you can do to position your organization to have the best chance of success at grant writing:

1.  Have professionally prepared letterheads and envelopes, and a professionally prepared, maintained, and updated website.  Many prospective funders look at applicant’s website.  Don’t have the home page of your website announce an upcoming event that occurred six months ago.

2.  Have email and a fax number, in addition to a business phone number.  Fax machines are very inexpensive and can be set up to share a phone line with your phone number.  Many prospective funders ask for your fax number.  Saying you don’t have one is very unprofessional.

3.  Have at least six to eight members on your board of directors, with a diversity of professional backgrounds, gender, and ethnicity.  The minimum number of board members required by the State of Texas for a nonprofit corporation is three, but this number is too small to meet the governance and diversity preferences of many funders.  Contrary to what you might have heard, you can’t have too many board members.  To prospective funders, every board member serves as an endorser of your organization and helps give your organization credibility.  Have at least one board member with professional expertise in fundraising, accounting/finance, law, and marketing.  All board members should make financial donations to your organization.

4.  Before having your Form 990 and audit completed, make sure the allocation of expenses on your statement of functional expenses is reasonable.  And “reasonable” means a large allocation of expenses to program, versus management/administrative and fundraising.  If less than 75% of total expenses are allocated to program, your chances of funding are greatly reduced.  And make sure that your accountant records direct special event expenses “above the line,” meaning as a credit against special event revenues rather than as fundraising expenses.  This will help keep your fundraising expenses as a percentage of total expenses low.

5.  Complete your Form 990 as soon as possible after your fiscal year-end.  You don’t have to wait until right before the due date to submit it.  Complete this form even if your organization is not required to do so.

6.  Have audited financial statements, if it is at all financially feasible.  If you have audited financials, have the audit completed as soon as possible after your fiscal year-end.  Though an audit can be expensive, some prospective funders will not even consider your application without an audit.

7.  Have accurate and current internal financial statements.  If a prospective funder wants recent financial statements, it won’t suffice to say that your most recent financials are six months old.

8.  Have a detailed and reasonable budget for expenses and revenues for your total organization, and for each individual program within your organization.  Make the line item descriptions on your budget clear and understandable.  Don’t use internal acronyms or jargon that an outside reader won’t understand.

9.  Have a legible copy of your IRS 501(c)(3) letter that is less than five years old.  Make sure your IRS letter includes your Section 509(a) status; you should be 509(a)(1) or (2), and not (3).  Contact the IRS at 877-829-5500 for an updated letter if yours is more than five years old or if it does not contain your Section 509(a) status.

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Recent grants received by our clients include:

$200,000 for an organization with a mission to transform inmates and executives by unlocking human potential through entrepreneurial passion, education and mentoring – for general operating expenses

$26,000 for an agency that provides services for abused and neglected children – $18,000 for programs and $8,000 for general operating expenses

$26,000 for an organization that provides a diabetic life skills training camp for children – for financial assistance for children whose families cannot afford the full tuition

$20,000 for an agency that makes necessary home repairs for low-income veterans, elderly, and disabled individuals at no cost to them. – for home repairs for veterans

$18,500 for a domestic violence agency – for the emergency shelter program

$11,500 for a school for severely developmentally disabled children – for therapy

$10,000 for an agency that provides therapy to veterans, first responders, and their families – for general operating expenses

$10,000 for an organization with a mission to provide hope and restoration of mind, body, and spirit to formerly incarcerated men – for general operating expenses

Murray Covens, Principal

murraycovens@northtexasnonprofitresources.org

North Texas Nonprofit Resources

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More About Why Grant Requests Are Denied

You applied for a grant and were denied, even though your program provides a positive impact on the community.  You thought surely the funder would understand your organization’s good intentions and how much you can help.  You question how anyone could possibly turn you down when you’re doing such good and important work that benefits people in need.  You wonder how it’s possible that your request was denied.

But usually when your grant request is denied, it’s not so much that your request was “denied.”

It’s just that other requests were selected ahead of yours.

Many grant applicants think that the main reasons for not being selected for funding are because the funder does not like your program, or because of the way the request was presented.  These reasons are rarely the case.  What many applicants fail to understand is the amount of competition for every grant dollar.  As hard as it might be to believe, and as important as the work is that your organization is doing, another organization down the block is doing work that is equally important, if not more so.  Funders have finite funding available for what sometimes seems like infinite requests, and each funder can fund only so many requests.

You rarely receive feedback from funders about why your application is not selected for funding, and when you do, you’re rarely told more than “We had so many applications and we can fund only a small percentage.  Feel free to apply again next time.”

You generally should, and are often required to, wait a year from the last request before applying again.

We had a client receive their first grant from a particular foundation on their sixth application.  There were no substantial changes in the personnel or operation of the applicant or the nature or wording of the request from the previous five applications.  Sometimes it just takes persistence.

Grant writing is not a get-rich-quick scheme.  It can take months or years to obtain funding from a particular funder.  And of course you might never receive funding at all.

A frequent reason funders do not choose an application for funding is because of being asked for too much money.  The amount of your ask is important.  It can tell a funder whether or not you did appropriate research or are just blasting funders with the same ask.

One prospective client we talked to had mailed out a batch of grant requests asking every funder for $100,000.  Some of the funders to which they applied didn’t even have that much in assets!  Foundations generally make annual grants of about 5% of their total assets.  So that $100,000 request was sent to some funders that make grants of less than $5,000 per year in total.  What a waste of time – both the applicant’s time and the funder’s.  Though this is an extreme example, the prospective client obviously had not done their homework and didn’t make appropriate asks to each funder.

Some funders will consider your request for a lesser amount than requested, if the amount requested was reasonable, but some funders only consider requests for the amount requested.  Though they might have approved your request for $10,000 if that’s the amount you asked for, they might reject your request if you asked for $15,000.  You usually have no way of knowing a funder’s policies about the amount of the request, so it’s important to make an ask to each funder that’s appropriate based on that funder’s funding history.

One frustrating reason for sometimes not being selected for funding is that, even though your research might show that a funder has made several grants for programs similar to yours, the funder might have decided that since they’re already funding several programs like yours, they’ll now focus on applications for other types of programs.  Again, you might have no way of knowing this, so you just need to try again next year when maybe the funder has decided not to fund one of the other programs like yours and then consider your request.

There are, of course, many mistakes you can make that will reduce or eliminate your chance of getting funding.  But often when your application is denied, there’s little or nothing you could have done to change the outcome.  Try again next year!

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$54,000 (2 grants) for an agency that promotes, protects, and advocates for the human rights and self-determination of people with intellectual and developmental disabilities – for general operating support

$50,000 for an organization that has innovative programs that connect the nation’s top executives, entrepreneurs, and MBA students with convicted felons – for workforce and entrepreneurship training

$50,000 for a school that develops urban youth through transformative education, equipping future leaders to impact their communities – for general operating support

$15,000 for an organization providing gifts and last wishes for children terminally ill with cancer – for general operating support

$10,000 for an agency that provides a residential program for women battling substance addiction – for general operating support

Murray Covens, Principal

murraycovens@northtexasnonprofitresources.org

North Texas Nonprofit Resources

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Why Grant Requests are Denied

Competition for grants is intense, and no matter how word- or picture-perfect your
proposal is, and no matter how well your proposal matches the requirements of
the funder, the funder still might decide not to fund your request.

As explained on the website of one small foundation:

“Desires for assistance or guidance in drafting proposals or inquiries for “feedback” regarding the evaluation of proposals are perfectly reasonable, but we are currently unable to comply with such requests.  We are a small family foundation with an all-volunteer group of board members who hold other full-time jobs.  We cannot demand that the board of trustees agree to any characterizations about the putative “strengths” or “weaknesses” of your previous grant or any new grant.  Applicants should also understand that the grading procedure used by the trustees means that grants are separated out at times by the smallest of fractions, and thus drawing a line becomes often brutally arbitrary simply because the standard deviations in the last “final set of grades” after discussion are almost totally nonexistent.  In so many instances, if the money for funding had still been available when proposals next in the final rankings were reached, the proposals would have been funded.”

As explained in a rejection letter by one fairly large foundation:

“Many factors are included in the evaluation of proposals by our foundation.  Geography
plays a role in that we may have exceeded our budgets in a given geographic area.  Program area plays a role in that we may have exceeded our budgets in a given category.  Some appeals, while meritorious, do not fall into a target area of our giving priorities.
Your proposal was well presented.  It was not denied because of failure on your part.  Each year we must decline many meaningful appeals for the simple but important reason that our funds are limited, while requests for those funds are not.”

As explained in the FAQ’s of one foundation in answer to the question “My grant was turned down. Can you tell me why?”

“Competition for grant funds is intense and there are a number of factors that determine if a request is declined.  Most frequently it is because we are unable to fund every request that we receive.  The Grant Review Committee looks for programs and projects that best
meet the areas of interest outlined in the grant guidelines.  We encourage those whose requests are declined to come back to us at a future time with another proposal.”

Recent comments our clients have received in denial letters from foundations include:

“The number of new grant requests we have received greatly exceeds the limited resources of our foundation.”

“Because we have a limited amount of funds available, declining worthwhile requests is an unpleasant necessity.”

“We receive many more requests than we are able to fund.  Given the challenging economic times and the reduction in available funds, unfortunately we are unable to support your request.”

“Because the number of funding requests continues to grow, it is impossible for us to approve all worthwhile projects.”

“Please be assured there was nothing deficient about your proposal, nor do we feel your program is unworthy.”

“We are a small foundation and receive many excellent requests.  Unfortunately, we just did not have funds for all the requests we received.”

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Recent grants received by our clients include:

$40,000 for an agency that meets the critical needs of homeless children – to purchase products for homeless children

$30,000 (two grants) for an educational and residential program for adults with intellectual and developmental disabilities – $20,000 for general operating and $10,000 for programs

$20,000 for an organization that provides housing, social, and educational services to homeless children and their families – for general operating

$20,000 (two grants) for an organization that gives youth in the juvenile justice system the skills needed to break the cycle of incarceration and create positive futures – for general operating

$15,000 for an agency that increases organ donor registries – for general operating

Murray Covens, Principal

murraycovens@northtexasnonprofitresources.org

North Texas Nonprofit Resources

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Grant Writing: Nothing Magical

Grant writers don’t have special powers.  There are many myths surrounding successful grant writers and grants programs.  Successful programs bring in grants not because a writer has “the gift,” but because the program is built like any other successful program – with vision, solid planning, discipline, and follow-through.

But, there are no shortcuts to the land of plenty.   Working with donors is … work.   When you are ready to get started or take a fresh look at your grants program, here are five rules that, if followed, can help set your program apart.

1) FOLLOW THE RULES

If you learn only one thing about grant writing, let this be it.  Effective grant writers aren’t magicians.  They are ordinary people who have disciplined themselves to follow directions very well.

Foundation program officers have stacks of requests for great projects from wonderful organizations.  They have to weed through the stack quickly, and the first proposals in the recycling bin are the ones that didn’t follow the directions.

2) YOUR ORGANIZATION?  YOUR CAUSE

Foundations and donors aren’t supposed to care about your organization. They should care about your cause.  Too often, nonprofit organizations forget there is a distinction.    It isn’t a foundation’s job to make sure you meet your annual campaign goal.  It is your job to equip them to address your shared cause together.

But what is your cause?  Your cause is the problem you are trying to solve.  Your cause answers the “why” question — the reason you do what you do.  It’s only after embracing the “why” that anyone will care about the “how,” the way your organization goes about addressing the cause.

The best grant proposals are the ones that present their organizations the way funders see them – as one of many approaches to addressing a broader cause.

3) DON’T CHASE SHINY OBJECTS

Organizations often seek grants when they are looking for a shortcut to meet a looming budget crisis.  Grants don’t work that way.  In these times, organizations often chase potential grant opportunities that only marginally fit their mission.  It rarely works because most funders see through it.   When it does work, the grant often becomes a burden and shifts resources from the organization’s core mission.  Grants can be enticing and flashy, but they also will define your organization.  Make sure you like what they say about you.

4) FOUNDATIONS ARE PEOPLE TOO

Two things you need to know about foundations: 1. They are founded and run by humans – people who think and feel.  2. They are founded to accomplish their own objectives, which may or may not align with yours.

Communicate with, write to, and engage foundations and their staffs like they are human beings.  And make sure you reveal your own humanity too.  Share your organization’s challenges.  Foundations are pretty good at spotting weaknesses, so being upfront about them shows you are realistic.

5) FOLLOW THE RULES

I think I already mentioned that.  I can’t stress this enough.  The biggest problem with foundations in reviewing proposals is organizations that don’t follow the guidelines.  Don’t give funders a reason to toss your proposal.

Again, successful grants programs contain the same components as any successful programs — vision, planning, discipline, and follow-through.  And they require leadership, solid financial management, and strong strategic planning.  They do not require special powers.

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Recent grants received by our clients include:

$40,000 for an organization that meets the critical needs of homeless children – for products for homeless children

$15,000 for an agency that arranges for gifts and last wishes for children terminally ill with cancer – for general operating

Murray Covens, Principal

murraycovens@northtexasnonprofitresources.org

North Texas Nonprofit Resources

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Letters of Inquiry

Many foundations have no website, no one answers their phone, and there is no information to be found regarding their grant application process.  Maybe you only know about them by seeing a press release sent out by one of the foundation’s grant recipients or published in the newspaper.  How do you apply to them for a grant with so little information available?

Draft a letter of inquiry!  To do so, you need to confirm that your organization is a potential match for the foundation, and identify a way to apply.

You can pull up the foundation’s profile in the Foundation Center’s Grant Database, or some other similar database.  While the profile might have limited information, it will usually list the foundation’s funding priorities.  Priorities can shift, though, especially in rough economies, so it is important to compare listed funding priorities with recent grants listed on their Form 990.  This comparison can highlight the foundation’s current interests.  You can also perform a quick Internet search to look for additional press releases from other grant recipients.

Some foundations require that interested applicants send in a letter of inquiry prior to submitting a full grant proposal.

A letter of inquiry is meant to introduce an organization to a foundation and to briefly summarize how a grant from the foundation would be used.  Based on the information provided in the letter of inquiry, the grant making organization will decide whether or not it will consider a grant proposal from the applicant.

A letter of inquiry typically has the following components:

·         Introduction

Introduce your organization. How long has it been active?  Where does it operate?  What does it do?  How many people does it serve in how large of an area?

·         Explain the connection

Mention why you think your organization’s funding needs would be a match for the foundation’s grant program.

·         Build credibility

Demonstrate that your organization is credible and productive.  Summarize recent accomplishments that relate to the funding agency’s goals and list any accolades your organization has received.

·         Briefly describe the proposed project and related need

What need will the project address?  Back up your assertions with data, if possible.  Explain how the funding will be used.  Be clear, but concise.  Provide overviews rather than details.  This is not the place to get into the details of project implementation, but rather to share your overall vision with a potential funder.

·         Request their consideration

Express your organization’s interest in submitting a full proposal for the foundation to consider.  Note that you are not requesting a grant at this stage, but rather the opportunity to request agrant by submitting a grant proposal.  You are asking for their consideration, not a check.

·         Conclusion

Provide contact information, thank them for their time, and make sure they know you are available to talk to them.

The ideal length for a letter of inquiry is two to three pages, though some foundations allow a limit of one page.

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Recent grants received by our clients include:

$25,000 for an agency that provides comprehensive housing, social, and educational services to homeless children and their families – for general operating expenses

$20,000 (3 grants) for an organization with a mission to change the educational, emotional, and financial futures of individuals, schools, and advocacy centers through creative arts programs – for general operating expenses

Murray Covens, Principal

murraycovens@northtexasnonprofitresources.org

North Texas Nonprofit Resources

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Common Characteristics of Nonprofit Organizations with Weak Grant Proposals

These are common characteristics of nonprofit organizations that present weak grant proposals:

  • Weak governance – The agency has a moribund or non-functioning board of directors that is not adequately overseeing the agency.  Examples: The board is very deferential to the board chair or the CEO, has spotty meeting attendance, or has little to no committee participation.
  • Poor program quality – The agency’s programs are ill-designed or inadequately staffed.  Example: The agency offers an educational program taught by untrained volunteers who operate without any curriculum guidelines.
  • Lack of results – The agency cannot demonstrate meaningful results for key, mature programs.  Example: The agency cannot show whether a long-standing afterschool program, the agency’s centerpiece effort, leads to any learning or behavioral gains among participating children.
  • Poor financial stewardship – The agency does not manage its finances responsibly.  Examples: The agency has generated worsening operating deficits for five years straight, but does not have a meaningful plan to reverse the decline, and the board seems uninvolved or unconcerned. Or the agency has complicated finances and significant revenues but cannot provide a recent audit or a sound explanation for lack of an audit.
  • Lack of candor – The agency fails to disclose important developments in the life of the agency.  Examples: The agency does not mention the resignation or dismissal of key staff, withdrawal of major support, or pending litigation.
  • Lack of planning –The agency is not planning adequately, or soon enough, for imminent challenges.  Example: The agency knows that a long-standing government grant, representing a significant portion of its revenue, will end in a year, but has not started developing other financial resources to replace it.
  • No need for service – The agency is providing duplicative services.  Example: An agency does not perform adequate community research before developing a new program, and therefore cannot demonstrate convincingly why its program is actually needed or how it is unique.
  • Not cost effective – The project does not appear to be cost effective, considering the number of people to be served, the total cost of the project, the amount requested, or the life of the project, especially in comparison to competing requests.  Example: The agency is requesting $100,000 for a $1 million piece of equipment, which will have a useful life of five years and serve 200 people.
  • Sustainability – The agency seems unlikely to be able to sustain the project over time.  Example: An agency projects it will need $250,000 per year in new philanthropic support to sustain a proposed program. But the agency has never previously raised more than $20,000 in a single year, and does not plan to add staff to its development operation.
  • Bad timing – The agency submits a request too early in the project’s life. Examples: The agency submits a request for a building program that is still largely conceptual, with no final architectural plans or firm cost estimates yet developed. Or the agency presents a request for a “demonstration project,” but has not yet decided how the project will be evaluated or how it might be replicated.

Funders consider many factors, including the following:

  • If the proposed program is well designed to meet a specific need and will produce well-defined, measurable, cost effective, positive change for the population being served.
  • If sufficient financial support is available from other sources to ensure implementation of the program and the program’s continuity after the grant period.
  • If the agency has strong leadership and financial stewardship.

What large, sophisticated funders look for when deciding whether or not to give to a nonprofit organization:

  • Mission statement – clear, focused
  • Board members – professional affiliations, diversity (professional, ethnic, and gender), personal involvement, personal giving
  • Staff – qualifications, accomplishments
  • Funding – financial stability, diversity of funding sources, sustainability
  • Budget – reasonableness, accuracy
  • Clients – socio-economic status, ethnicity, gender
  • Success – measurement, history
  • Collaborative efforts
  • Volunteers – level of involvement
  • Professionalism – without extravagance

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Recent grants received by our clients include:

$37,500 (several grants) for an organization with a mission to be dedicated to the well-being and education of low-income children in our community – $23,500 for educational programs and $14,000 for general operating expenses

$25,000 for a school for severely developmentally disabled persons – for their new program for adults

$17,500 (2 grants) for an agency that provides last wishes for children terminally ill with cancer – $10,000 for general operating expenses and $7,500 for wishes

$10,000 for a senior living community – for a stimulation room for seniors with dementia

Murray Covens, Principal

murraycovens@northtexasnonprofitresources.org

North Texas Nonprofit Resources

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What Percentage of Total Expenses Should Go Toward Program Expenses

Prospective funders often ask nonprofit organizations “What percentage of my donation goes directly to the cause?”  If your correct answer to this question is anything less than 100%, no one should donate to your nonprofit organization.

Starting today, you might choose to change the way you’ve been answering that question.

Your answer to the question is typically taken from the statement of functional expenses, which breaks down expenses by three categories – program, management/general, and fundraising.  If all expenses of your nonprofit organization are necessary and reasonable, and all are required for your agency to provide its services and serve its clients, then the way you split expenses on the statement of functional expenses should be irrelevant to funders.

Among charity watchdog organizations, the Better Business Bureau says at least 65% of expenses should be for programs; Charity Navigator says the most efficient charities spend 75%+ on programs; and the American Institute of Philanthropy says at least 75% is ideal.  Our experience is that the standard most often quoted by foundations is 75%.

But, the traditional split of expenses between program, management/general, and fundraising is close to meaningless because there is little consistency between nonprofits in how they record these expenses.

A study reported in Functional Expense Reporting for Nonprofits, The Accounting Profession’s Next Scandal?, by Kennard Wing, Teresa Gordon, Mark Hager, Thomas Pollak, and Patrick Rooney, published in 2006, found that:

  • 37% of nonprofits with at least $50,000 in contributions report zero fundraising costs.
  • One-fourth of nonprofits reporting $1 million to $5 million in contributions report zero fundraising costs, as do nearly one-fifth of those reporting more than $5 million in contributions.
  • 13% of nonprofits report zero management and general expenses.
  • 7% charged all accounting fees to programs, and another 20% split them across more than one category—despite the fact that Form 990 instructions use accounting fees as an example of what is meant by management and general expenses.

There are no nationally consistent norms or enforced standards for allocating expenses between the three categories.  Most ratios (program expenses as a percentage of total expenses) are based on self-reported data and rationales from the Form 990, which, the above study and other research have found, are often rife with inaccurate and inconsistent accounting and reporting, meaning one cannot accurately compare the 990 of one organization to that of another.

We have found that many of our clients, for example, split the executive director’s salary between functional categories after a brief thought process as follows – 75% program, 15% management/general, and 10% fundraising.  Often, expenses are functionally allocated by inexperienced people, maybe even the executive director’s next door neighbor’s cousin who’s just trying to help out, and the results are used on the 990 and even make their way to audited financials.  And yet funders look at the results of that thought process, the reporting of amounts by functional category, as though they’re meaningful – as though reported program expenses of 76.3% for one organization is really better than the 72.8% reported by another organization.  They say the organization reporting 76.3% is more “efficient.”

Actual costs vary between nonprofit agencies based on many factors other the “efficiency” of the organization.  One organization may record staff time as administrative costs, while another might record it as program costs.  Some nonprofits may not record certain staff time, such as time spent on grant writing or event planning, as fundraising costs, though most others do.  Fundraising costs can vary based upon the age and type of the organization.  Newer organizations tend to have higher fundraising costs because they have to build donor lists and contacts.  Organizations dealing with controversial issues, such as AIDS, often have higher fundraising costs because it may require more effort to raise the same amount of funds as other nonprofits do with less effort.  Organizations that provide services to abused or sick children generally have the easiest time raising funds, and often the lowest fundraising costs.  But that doesn’t mean they’re doing a better job on fundraising than organizations with a less popular mission.

Some funders take issue if a high percentage of a nonprofit’s total expenses is for salaries.  But salaries as a percentage of total expenses vary greatly between nonprofit organizations depending on an agency’s mission.  One client of ours provides wishes for children dying of cancer (not Make-A-Wish Foundation), and only 20% of total expenses are for salaries because most of their expenses are for outside organizations providing the wishes.  Many nonprofits have 50-75% of total expenses as salaries because most of their services are provided by staff and not vendors.  One of our clients has a private school for severely developmentally disabled children and they have a 1:2 teacher/student ratio.  Does that mean they’re less “efficient” than a school for “normal” kids with a 1:15 teacher/student ratio, or less deserving of donations?

Much of the amount paid to vendors for services and supplies is paid by those vendors for salaries in their own business, but funders never question those salaries.  Is it better to pay vendor’s salaries than staff salaries?

We hope you finish reading this blog with two take-aways:

1.  Ideally, when a prospective funder asks “What percentage of your organization’s expenses is spent for programs?, your answer should be “100%.”  If that answer isn’t appropriate under the circumstances, a good answer might be:

“100% of our expenses are necessary for us to provide our programs.  We don’t make any expenditures that are not required for us to be able to operate our organization.  In order to comply with IRS requirements (and Financial Accounting Standards Board requirements if your organization has audited financials), on the Statement of Functional Expenses we report X percent (insert the percentage from your most recent Statement of Functional Expenses) of expenses as direct program expenses.”

2.       If you are not currently recording at least 75% of your organization’s expenses as program expenses, change it today.  As discussed above, there is no consistency between nonprofit organizations in allocating expenses between program and other, and many other organizations very similar to yours are reporting a far higher percentage of expenses as program than yours does.  You should be very aggressive in deciding how to allocate expenses – not inaccurate or deceptive, but aggressive.

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Recent grants received by our clients include:

$711,000 (over 3 years) for an organization that provides real-world values-based business skills to inmates so that once they are back in society they have the tools, skills and support structure to pursue healthy, fulfilling and productive lives – for workforce training

$255,000 (over 3 years) for an agency that sparks community restoration by engaging in mutually-transforming relationships with future leaders of West Dallas – for mentoring

$50,000 for an organization that restores and empowers formerly trafficked girls and sexually exploited women and their children – for general operating expenses

$40,000 (2 grants) for a high school for at-risk students that develops urban youth through transformative education, equipping future leaders to impact their communities – $25,000 for general operating expenses and $15,000 for math and reading programs

$30,000 for an organization that works to prevent the spread of HIV and serves persons living with HIV/AIDS and other vulnerable populations – for their transportation program

$29,500 for a primary-care, full-service clinic assisting families who have limited resources – for healthcare for women

$25,000 for an agency that strives to to prevent homelessness and stabilize those at risk in decent, affordable, and permanent housing, and to empower them to solve their own housing problems in the future – for their family financial empowerment program

$17,500 (2 grants) for an organization that provides needy families with children in the last stages of terminal cancer assistance in creating “Everlasting Memories.” – $10,000 for general operating expenses and $7,500 for wishes

Murray Covens, Principal

murraycovens@northtexasnonprofitresources.org

North Texas Nonprofit Resources

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Just Because a Foundation Approved Your Grant Request Before Doesn’t Mean They’ll Do It Again

There is a common misperception that if your organization receives a grant from a particular funder, you’ll probably receive a grant from them next time you apply as well.  This assumption is a mistake – and often a costly mistake.

Even if your organization received a grant from a funder last time, the next time your organization applies, your application will be reviewed the same as for all other applicants.  This generally applies even if your organization has received a grant from the funder for multiple years in a row.

You should not assume in your budget that your organization will receive a particular grant, and you should always be seeking new grants.  You can’t depend on previous funders always giving your organization another grant.

Funders might change their funding focus areas.  Foundation board members, especially new board members, might change the criteria by which applications are reviewed.  The board member who championed your organization in the past might have left the foundation.  Or a funder might just decide that they want to spread their funding around to other organizations, the same as you might do with your own personal giving.

Most funders don’t like to receive phone calls asking why, since your organization was funded last time, your application was denied this time.  If you personally made a donation to one charity for a few years in a row and then decided that you wanted to spread your giving around to other charities instead, would you like to receive a phone call asking why you didn’t once again support the same charity?

One former client of ours from a few years ago received a grant from one foundation every year for several years, and suddenly one year they were denied, even though nothing had changed with the organization.  The board chair of our client decided to write a letter to the board chair of the foundation saying that after having received funding for so many years, the organization had included a grant from the foundation in their budget, and wanted to know why this year’s request had been denied.  Not only did the foundation not respond to the letter, but the organization hasn’t received a grant from that foundation since.  The foundation might have resented being told more or less that a grant had been expected.

A large faith-based organization contacted us awhile back and said that for many years one funder had provided $8 million of their $9 million annual budget, and that funder had just given them one year’s notice that they were completely backing out.  The organization admitted they had done little to find new grant dollars over the years because of the one large funder, and they had no idea how they were going to make up almost 90 percent of their large budget in such a short time.

A few years ago a small afterschool program had received 100 percent of its funding from one funder for many years, and had not sought any additional funding sources.  That funder suddenly had a disagreement with the organization and gave them three days’ notice that they were terminating the monthly checks they sent.  That organization was saved when there was a news story about their predicament and a couple of local foundations came to their rescue.

If you think you’re sure that your organization will continue to receive funding from a particular funder, can you imagine contacting the funder and asking them, assuming everything stays the same with your organization, if your organization can count on continuing to receive funding this year and next year and the year after that?  Most funders would not respond well to that question, and your organization shouldn’t make such an assumption.

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Recent grants received by our clients include:

$50,000 (2 grants) for an agency that teaches transitional life skills to young men and women with intellectual and developmental disabilities – for general operating expenses

$40,000 for an organization that transforms convicted felons by unlocking their potential through entrepreneurial passion, education, and mentoring – for general operating expenses

$15,000 for an agency that provides financial and social assistance to families of children battling cancer – for general operating expenses

Murray Covens, Principalmurraycovens@northtexasnonprofitresources.org

North Texas Nonprofit Resources

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Still More Myths About Grant Writing (continued from last week)

8. Some professional fundraisers can raise grant money “guaranteed.”

Anyone who guarantees that they can obtain grants fr your organization had better be speaking in colloquial terms.  If someone pitches to your organization that they can actually guarantee raising your organization money – be very leery.  While most strong nonprofits have excellent chances at raising grant money – there are no guarantees.  This is why any fundraising process must be long-term.  An organizational investment in the process must be made.

9. Grants are just for start-up nonprofit organizations.

No.  Do not leave potential donations on the table.  If your organization is raising money in many methods but not grant writing, ask yourselves ‘why’ and learn about it.  Consider doing it!  Grant writing’s cost/benefit ratio, when the program is well managed, is excellent.

10. Start-up nonprofit organizations should only try to raise grant donations.

Any support that you raise at this stage of the organization will pay off in spades if you maintain it well – into the organization’s future.  Go from thinking ‘start-up’ to thinking ‘long-term.’  Diversified fundraising provides more safety and security to your organization’s financial future.

11. Public relations isn’t important to our raising grant money.

Control what others are saying about your organization by disseminating your strong track record and successes.  Be sure that your board is telling friends and colleagues why they volunteer with your organization.  Provide clients, constituents, and potential donors with information.  Call the press after a big success or when you launch or break ground on  a new innovative initiative.  Grant donors are just like any other kind of donor.  They invest in successful organizations working for causes that they’re passionate about.  Get the word about your organization out there.

12. We board members and/or I, the executive director, can just take a leadership nonprofit position without being responsible/proactive about learning the latest in nonprofit governance, without understanding my legal and fiscal responsibilities to the organization, and without learning about fundraising and its latest paradigms.

Anyone working for a nonprofit whose leadership acts this way – be warned.  You are not working for a well-run or healthy organization.

13. Nonprofits are meek organizations that are lesser than ‘for-profits,’ provide an opportunity for people to contribute to their community, and hardly receive government oversight.  We can be lax and get away with stuff.

Read the latest press on Congress’ recent initiatives to increase American nonprofits’ reporting to the federal government.  In particular, they want to oversee what percentage of funds raised is going to your mission’s programs, and whether you’re legally and professionally accounting for your receipts and costs.  Meanwhile, donors are smarter and more proactive today.

14. Straying from our mission statement (or the scope of its work) is OK.  Nobody will know or care.  We can still raise donations, including grants.

Nonprofits succeed with community support – not in a vacuum.  Your reputation is everything in fundraising, let alone grant writing.  If you aren’t on your mission statement’s message, why are you still operating?  Either correct the scope of your work, close shop, or reorganize as a new agency with a new mission statement.

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Recent grants received by our clients include:

$40,000 (3 grants) for an agency dedicated to the education and well-being of children – $30,000 for a summer reading program, and $10,000 for snack packs and summer lunches for children

$29,000 (2 grants) for a domestic violence agency – $24,000 for general operating expenses, and $5,000 for services to children of battered women

$25,000 (3 grants) for an agency that provides last wishes for children terminally ill with cancer – $15,000 for wishes, and $10,000 for general operating expenses

$20,000 for another domestic violence agency – for services to children of battered women

Murray Covens, Principalmurraycovens@northtexasnonprofitresources.org

North Texas Nonprofit Resources

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More Myths About Grant Writing

1. Our organization needs to just go get a grant or two, and we’ll be set.

Wrong.  Grant writing must be a part of a diversified, long-term, supported fundraising (or development) plan.  For example, your fundraising could include grant writing, an annual appeal, bequest planning, envelopes in your monthly newsletter, a major donor program, and a walk-a-thon special event.  This takes experience, commitment, and work. A new fundraising method often takes two or three years to make money, and it takes a lot of planning. Your fundraising must be ongoing and diversified.

2. Grant donors are just the wealthy giving their money away so that they can feel good.

Wrong.  Today’s grant donors are savvy.  They do not just sign away checks.  They select causes that they are passionate (and informed) about to effect change in our world.  They often research which nonprofit organizations are mission-driven, healthy organizations, successful at their mission statement’, and good to work with.  They often expect reporting, and always program success and results.  Grant donors talk to one another and share information about bad apples.

3. We can just dive in and apply for a grant.

Wrong.  Successfully getting grants takes planning, learning what to do and how to do it well, professional know-how, commitments to the process from leadership and staff, time, research, writing drafts and re-writing, patience, relationship building, communication, public relations, and more.

4. There aren’t any grants out there for our organization.

Probably wrong.  Unless your organization is trying to perform some obscure service, most every cause can gather some support.  If your cause is having a tough time raising support, perhaps you need to develop educational materials about what your organization is doing and how your community can help.

5. Once we receive the grant, we’re ‘home free.’

Wrong.  Seeking grant money is part of a fundraising strategy.  It is not a short-term venture.  No organization dedicated to its mission can do all its cause needs through the funding of one grant.

6. Whether or not we receive a grant depends mostly on how good our grant writer is.

Wrong.  This is a common incorrect assumption.  Raising grant money is a team effort.  A professional grant writer must be reputable, successful, and knowledgeable about potential funders.  They have to be very good at what they do.  But they do not work in a vacuum. Staff, leadership, and even volunteers must be dedicated to the grant writing process, as it often requires proof-reading, fact-checking, research, pulling necessary agency documents, feedback, draft mark-ups, etc.  Also, a grant writer must provide a great grant proposal but the agency’s reputation, track record, relevance, effectiveness at its mission work, financial health, etc., are more important factors to the grant donor.  Grants are awarded based on many attributes, 99% of which are the organization’s – not the grant writer’s.

7. The board does not need to be involved in obtaining grants.

Wrong.  Grantors who choose to meet with perspective grant recipients (some do, some don’t) should be meeting with the highest level representation from your organization, such as board members and the executive director.  This is called peer-to-peer relations.  Treat any potential donor with respect and interest.  This should come from your leadership to demonstrate your care for the relationship with them.

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Recent grants received by our clients include:

$40,000 for an organization with a mission to give youth in the juvenile justice system the skills needed to break the cycle of incarceration and create positive futures – for general operating expenses

$25,000 (2 grants) for an agency dedicated to the well-being and education of the children in our community – $15,000 for a summer reading program, and $10,000 for snack packs and summer lunches

 

Murray Covens, Principal

murraycovens@northtexasnonprofitresources.org

North Texas Nonprofit Resources

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