How the Grant Acquisition Process Starts Long Before You Submit a Proposal
I cannot tell you how many times I’ve overheard people who are not in the professional business of grants, confidently advise others of how easy it is to get grants. “You have a non-profit! You can just get a grant…” and then, believing the ease of the process, small business leaders scuffle to get their limited funds together to hire a grant writer (who costs somewhere between $50- 125 per hour), assuming that the grant writer will certainly win them their award. Because they have very little knowledge about the granting process, when they begin working with a grant writer, it all comes out, and the grant writer and organization both realize, rather quickly, that they didn’t need a grant writer... yet; they needed a grant consultant to position them in advance…
There are so many misconceptions about getting grant money. Many people think that grant money is free money, and once they get it, they can do whatever they want with it, even if that means something totally different than what they proposed when they applied for the grant (you better have a great accounting system and compliance plan in place because mismanaging grant funds can land you in jail, buddy). On the other hand, some people think that if they hire a good grant writer, they are certain to win a grant. The likelihood of winning a grant has very little to do with your grant writer, and much more to do with your project design, operating budget, previous professional work history, and your budget narrative. Your grant writer simply professionally, technically, and poetically transcribes what you already have in place.
The grant process entails so much more than having a great program and a great idea of why you deserve funding. There are thousands of people applying for the same grant with the same idea as you, and grantors are experts at sifting through to find the best qualified candidates based on alignment and likelihood of actually executing the mission. It’s an old cliche in the grant industry that if you don’t already have the budget, you can’t afford the grant. Here’s why…
Grantors want to make sure you don’t mess up their money and have them looking crazy for funding your business.
If you have never managed the amount of money you’re asking for, you may very well get the money and ball out of control, forgetting you had a project to fund… and then, you can’t fund it, and the project goes belly up… and the grantor’s name goes down in flames with you because you got that shiny new money … sounds like those PPP problems, right?
Here’s what you need to know about preparing your company long before you apply for grants.
Let’s understand the purpose of grant funding and why funders are willing to fund.
Types of grantors:
Government (federal, state, local)- Public
Community Based- Private
Private grants are typically birthed out of a need for large companies to write off a portion of their taxes. Non-profit organizations (or fiscal sponsors for for-profit organizations) often carry tax-exemption status, meaning if a company donates to them, they can write off a reasonable amount of the donation. This can shelter a large percentage of their annual profit.
Private funders look for organizations that are doing work, within the community, that they have an interest in. For example, a private medical group may be interested in funding a community based organization (CBO) that offers mobile COVID-19 testing in impoverished communities. This executes their outreach mission, and it provides them with metrics that make them look good. They can say “we were able to service 7,000 community members by getting tests to people who lack transportation in low-income communities.”
This looks good for the stakeholders, and because the community knows their name (from the outreach initiatives), it drives community members to patronize their medical group, increasing their sales. This offers multi-directional gains.
Public grants are offered to fulfill a public need with taxpayer dollars. Public funds are given to community based organizations to address specific needs within the community. With this in mind, public funders are looking to fund organizations they can trust to properly manage the funds and to execute the funder’s stated mission.
The way they assess your ability to comply with the mission is based on your company’s:
Past performance- this helps them assess whether or not you have experience working in this sector and if so, how well you managed the project in the past.
Operating Budget- this helps them to assess how well your business raises capital to operate functionally and how well you have managed the company’s funds without grant assistance. Seeing an operating budget equivalent to or larger than the amount you are asking for gives them assurance that you are more likely to manage large sums of money successfully.
Program/Project Design- this helps them assess your strategy and filter through faulty program designs that are either not aligned with their mission or not likely to be successful. Grantors can sniff out project designs that were thrown together just to apply for the grant, and they aren’t as likely to fund designs that weren’t already operational or aligned with their current mission.
Sustainability Plan- this helps to assess your likelihood of maintaining the program if they stop funding your project. This matters because grantors don’t want to be your sole source of funding or purpose. They want you to continue the work beyond their paycheck.
While some organizations can successfully get grant funds without having positioned themselves with these factors in mind, 80-90% will not. Because of which, it’s essential to begin positioning your company for grants long before you start applying for them. Hiring a grants consultant preferably 6 months to a year BEFORE you begin applying will put you in a much greater position to win awards.
Here are a few ways you will need to position your company:
Develop a formal operating budget that includes everything your organization needs to operate comfortably and offers a buffer for growth (consultants, technology, accountants, etc.). Do not play small here, but also be reasonable. Your budget should include at least 20-30% profit margin.
In your budget, diversify your revenue streams. For example, depending on your business model, you should have line items for fee-for-service, products, grants, fundraising, and donations.
Have a strategic plan to acquire necessary funding to ensure your business is operating in the green or black, execute the plan, and manage the money properly once you do acquire the funds to build-up your bankroll.
Keep accurate financial records and monthly financial statements.
Get your business’s paperwork in order.
Develop formal, standard operating procedures and systems that add flow to your organization. Professionalize your operations to help you account for your company’s projected sustainability.
Expand your network, develop community based partnerships, and begin scouting granting organizations. You will need to network with funders so they can become familiar with your work. Sometimes, grantors will come to you and ask you to apply if they feel you have the capacity.
Develop objectives and track your company’s performance annually. These metrics should be documented in formal, internal reports.
There is so much more to share about grants… and we are just getting started. Subscribe to our newsletter for article updates, classes, and workshops. Also, if you’re seeking consulting services, feel free to visit our website (www.sjonesbooksaneducation.com ), give us a call at 850-559-7528 or email us at firstname.lastname@example.org
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