When your organization needs money, you make think the obvious solution is to start applying for grants. But is that actually the best option for your nonprofit right now? In the latest episode of the Nonprofit Jenni Show, we explore what your nonprofit needs have in place before applying for grants.
Advice from the “Grant Whisperer”
My first interview guest in this podcast episode was Carter Abel, an experienced grant writer and the Executive Director of Gigi’s Playhouse Nashville. Before taking on his new role at Gigi’s, Carter worked with a wide variety of nonprofits which needed a grant writer or development consultant. Carter warned all his clients against becoming too dependent on any one revenue stream, including grants, because a development strategy needs several forms of revenue to be sustainable.
(Not sure if your development strategy has a healthy balance of revenue streams? Carter recommends checking out the annual Giving USA study for insight on where most charitable giving comes from nationwide.)
What to Consider Before You Hire A Grant Writer
Because Carter has so much experience as a grant writing consultant, I asked him to give his advice on selecting a grant writer for your nonprofit. But first, he suggests that before your nonprofit ever applies for a grant, you should:
Have other sources of funding in place.
Set up internal controls and accounting systems.
Have the time and systems in place to manage relationships with grantors, track program outcomes, fulfill reporting requirements, and manage the administration of any grants you receive.
I loved how Carter described what will happen if you don’t take these steps before applying for grants: “Is it likely that you’ll be funded? No. If you do get funded, is it likely you’ll be funded again? Probably not!”
When you do decide to hire a grant writer, Carter suggests you consider:
Whether the grant writer is qualified. He recommends starting with referrals from other nonprofit leaders you know so you can be sure the grant writer has a good track record. You can also search for grant writers who have a certification from the Grant Professionals Association (GPA).
Whether the grant writer has a solid success rate in obtaining grants. Remember that the grant writer is not the only factor which determines whether you get the grant, so they shouldn’t have a success rate which is too high. (For comparison, Carter had about a 70% success rate as a grant writer.) Obviously though, too low of a success rate is a bad sign as well.
How the grant writer will impact your relationships with funders. If your organization has a negative relationship and history with a grantor, you’re unlikely to get another chance at funding from them… Even if the relationship is fully in the hands of an outsourced grant writer.
How the grant writer prefers to be paid. Carter recommends only entering into a contract with a flat hourly rate, as well as a cap on their hours (at least at the beginning of the relationship). It’s both unethical and disrespectful to pay a grant writer based on commission.
How to Build Positive Relationships with Grantors
You may have noticed Carter mentions relationship management pretty frequently when he talks about grant writing. This is because grant making organizations are just like any other funder--they rely on their experience with relationships to decide which organizations are credible and trustworthy. Carter recommends beginning a positive relationship by researching:
How the funder prefers to receive communication. This preference may be stated on their website, but you may have to reach out and ask them directly.
The funder’s mission and focus areas. If you don't know if your mission/program is exactly in line with their mission, ask! The funder will appreciate your efforts to avoid wasting their time with a proposal which does not meet their requirements.
Who the grantor has funded in the past. You can look at a grantor’s 990 to find out which organizations they have funded in the past years and guess whether they are likely to fund your organization. The 990 will also tell you how much money was awarded to each grant recipient, which can inform how much you request in your application.
Advice from Grant Writing Expert Holly Rustick
My other interview guest in this podcast episode was Holly Rustick, a grant writing consultant and the best selling author of The Beginner’s Guide to Grant Writing. Holly also has her own free podcast all about grant writing called Grant Writing and Funding.
How to Know If Your Nonprofit is Ready for Grants
I know that when Holly starts working with new clients, she always conducts a “Nonprofit Wellness Audit” before helping them apply for grants. This audit identifies areas of weakness which may hamper a nonprofit’s attempts to secure grant funding. Holly says some of the questions she’ll ask clients during her audit include:
Do you have fiscal policies and procedures?
Who is on your board? Are any of your board members part of your family?
How many board members do you have and how are duties structured?
Do you have a conflict of interest policy, and do you follow it?
Have you developed robust by-laws?
What is your projected budget for the year?
Do you have diverse funding sources?
What type of fundraisers have you completed so far, and how much have those brought in?
As you can see, grantors want to know that your nonprofit has a proven track record of raising and managing funds before they award you with a grant. There are countless ways to raise money for your organization through tactics such as peer to peer fundraising, charity events, ambassador programs, and more. One of my favorite fundraising tools for any occasion is DipJar, a gadget which allows your nonprofit to collect credit card donations at a set amount you choose, and I’m so glad they sponsored this podcast episode! You can actually get an exclusive discount with DipJar if you are one of my podcast listeners.
Different Types of Nonprofit Grants
Once your nonprofit is fit for grants, consider the major types of grant making organizations:
Federal and State Agencies -- There are 26 federal agencies which offer grants, and you can search these opportunities for free at grants.gov. Many state governments also offer grants and contracts to nonprofits. However, Holly points out these grants often aren’t the best first option for nonprofits which are new to grants because many require matching funds, and most require your nonprofit to have the ability to spend the money first before applying for a reimbursement from the government agency providing the grant.
Foundations -- These may include local community foundations, family foundations, corporate foundations, and many more. If you work for a small nonprofit which is new to grants, local foundations which are based in your region may be the best place to start. You can often get to know the grant administrators face-to-face, and their mission is likely to be based on supporting local nonprofit efforts.
Get Help Creating a Sustainable Fundraising and Development Strategy
Don’t forget, Nonprofit Jenni offers free initial consultation calls to help with your management, marketing, and development needs. Schedule your free half hour call now to talk through your current funding challenges! And don’t forget to subscribe to the Nonprofit Jenni Show to have new episodes automatically download to your mobile device, tablet, or computer.