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
This blog is a re-post from April, 2014
Recent grants received by our clients include:
$90,000 (2 grants) for an organization that helps women and teens escape sexual exploitation - for general operating expenses
$40,000 for an organization creating safe, more stable neighborhoods, free from crime and urban blight – for general operating expenses
$25,000 for an organization that connects the nation’s top executives, entrepreneurs, and MBA students with convicted felons to prevent recidivism, maximize self-sufficiency, and transform broken lives – for general operating expenses
$11,500 for a clinic for children from low-income families - general operating expenses
Murray Covens, Principal