Guest Author - Tracey-Kay Caldwell
You are passionate about your non-profit group, but the endless bake sales and fundraisers are just not meeting your budget? It might be time to apply for a grant. Applying for your first grant can seem overwhelming, but The Complete Idiots Guide to Grant Writing will show you that it is a manageable task. As the author, Waddy Thompson explains, you have probably already written your first grant proposal in the form of letter to mom and dad asking for more funds when you were in college. He shows you how that letter is very similar to the grant proposal you will write to secure funds for your organization. He starts with the basics, explaining to you what a grant is and if you qualify for one. In most cases in order to receive grants, your organization must be a non-profit or have fiscal sponsorship from a nonprofit organization. Grants are made for project support, for a specific project your non-profit would like to do; for general operating support (GOS), everyday expenses; and for capitol support, like buildings or computer equipment. Some grants will be issued to you in the form of challenge grants. These grants require you to raise matching funds.
Where can you find grant money? Grants are available from foundations, corporations, government agencies, and individuals. There are different types of foundations, and learning their specific limits in funding is key to getting your grant. A large established foundation will typically have a staff between five and two hundred. They will publish guidelines for applying for grants, have a staff that can guide you, and look at every proposal that comes through the door. When dealing with a family foundation, keep in mind their staffs are much smaller. If they don’t accept unsolicited proposals, then don’t bother applying unless you can find a personal connection with the trustee. Be sure to check their most recent grant award to see how it does or doesn’t meet their published guidelines. Community foundations are considered public because they receive funds from a wide variety of donors. These funds often decide whom to fund by considering request from their members. Some community funds will issue a request for proposals (RFP). Filling out an RFP is like filling out an application for a grant. Operating foundations exist to fund a research or service program. Their interests are narrow and do not usually fund outside projects. Commercial foundations are set up by investment firms to manage the philanthropic activities of their clients. You cannot apply to these foundations for grants. If one of their investors decides to make a grant to your organization, you will receive a check and possible a letter identifying the donor, but the funds allow for anonymous donations. Venture philanthropic foundations will expect a lot of involvement, in the form of providing management and technical assistance. They will expect you to provide some kind of return on investment (ROI) in the form of, social return through improved services, financial return when your charity performs more efficiently, or emotional return by making them feel ‘warm and fuzzy.’
You can also get grants from corporations. Corporations give away there money to further public relations and marketing opportunities. Many communities lobby corporations to commit to donating two percent of their net income. For example, the Minnesota Keystone club as a two percent and five percent club. The five percent club includes major U.S. companies such as, Target, General Mills, and the Minnesota Twins. Corporate foundations do not have huge endowments; they receive the majority of their funds as a donation from the parent corporation annually. Thompson offers the cynical suggestion that one target corporate philanthropy when the company is having a public relations nightmare. He says, “After the Exxon Valdez dumped millions of gallons of oil along the Alaskan shoreline, any environmental group that had asked for a contribution would have received it, but few would have wanted to associate themselves with Exxon at the time.” That is a warning to be heeded; you don’t want to create a public relationship nightmare for your own charity by accepting grants that work against your charities image. In addition to foundations, most corporations maintain a contribution office that makes in-kind donations of services and product. Many corporations have matching programs where they will match any donation by an employee, dollar for dollar. You apply for these programs with a simple application and proof of non-profit status. Applying for corporate sponsorship is different from applying for a grant. Here the corporation will be less interested in the details of your program, than in the demographics of your constituents and the potential marketing opportunities that sponsorship will provide. A sponsorship proposal should include a one-page cover letter summarizing the benefits to the corporation, the constituent demographics and the price range of sponsorship, not an exact price. Follow this with one-page summary of the benefits to the corporation and a one-page summary of sponsorship opportunities, including dates, location, attendance and expected media coverage. Include with this samples of prior press, reports and sample brochures from prior events. Thompson has included a sample corporate sponsorship proposal on the CD that accompanies the book.
Local, state and federal government agencies make grants to non-profit organizations to carry out programs that benefit the community. Government grants always involve forms, these forms may provide limited room for describing your program and this is where making every word count is important. Establishing a relationship with the local staff of elected officials is important. They can let you know of grant opportunities and legislation affecting your organization. Add the home and legislative offices for these officials to your mailing list. Begin looking for local and state grants by going to the government website and search for grants. Also, establish contact with the government agency, that most closely reflects your organizations purpose, whether that is child welfare, education, senior services, the arts, or prison reform. There are two types of federal grants, formula grants and project grants. A formula grant is basically a reimbursement for services you perform on behalf of the government. They typically fund the grant based on a mathematical formula, such as number of clients, times the average cost of providing that service, times a percentage they determine. A project grant is a competitive possess. You will submit a proposal to operate or plan a public service and will be judged against other proposal submitted for the same project. Whether you receive the grant or not, after the award is announced you should request from the program officer the comment of the people who evaluated your proposal. They are required to provide you with this information under the Freedom of Information Act and it will be useful in preparing your next proposal. Government grants come with a number of requirements and certifications. You will have to sign drug free and employment nondiscrimination statement, you will have to certify that you are in compliance with the Americans with Disabilities act, and you will be asked the ethnic and other demographic information of your board, staff, and constituents. If you know a legislator really well, you might consider line item “pork.” A legislator will insert an appropriation for your charity into a bill that is under consideration, if the bill passes with the appropriation in it, your charity gets the funds appropriated. Thompson offers a word of caution that, “Be aware when you seek a member item appropriation, you might be circumventing the government agency to which you would normally be applying. That agency might not be too thrilled that your appropriation could even lead to a reduction in their agency’s funding.”
Knowing where to get the money is only half the battle, convincing them to give it to you is the real challenge. Thompson shows you how to research the charity, learning as much as you can about why and whom they give money to. This information will help you develop a successful proposal. The heart of your proposal will be the program description. This should include the purpose of the program, why you are doing the project, how you will make it happen, who will do what, who will benefit, and how you will measure results. You will then take this information and customize it for your potential funder. You will make a checklist of all the elements the funder requires and you will write your proposal focusing on the elements of your program that meet the requirements of the funder. The next part of your proposal will be your budget. Many funders go straight from the cover letter to the budge when reviewing a proposal. The person evaluating your budget will probably be very familiar with budgets from organizations and projects similar to your own. When documenting personnel expenses in the budget, many foundations will require the salaries of executives involved in the project, even though this information may be publicly available on your charities 990 IRS form, black out salary information when circulating draft versions of the proposal for review. Rarely will a grant be paying the full salary of your executive; if the executive director were going to spend ten percent of his time on the project then you would document the expense in the budget as ten percent of executive director and include the cost of ten percent of his salary. The cost of the grant writer and other development staff cannot be included in the project budget. Direct expenses in the budget will include any cost directly related to the program. One percent of total direct expenses should be allocated for contingencies. Next, you will need to calculate your indirect costs for the program. This includes things like rent, utilities, insurance, bank fees, salaries and fringe benefits for administrative personnel. The CD included with the book has a Budget Builder that includes an excel worksheet for calculating these costs. A portion of you indirect costs can appear in your project budget. Funders want to know who else is paying for the project. In the income portion of your budget, include first, the request grant you are applying for, any in-kind donations you are receiving, grants you have received, and grants that are pending. Last, include the participant fees. In addition to your project budget, you will need to submit an organizational budget that includes all of your charities expenses for all of its programs and general operating expenses.
The first thing in your proposal that will be seen is your cover letter. This is where the research you did on the funder comes in. The cover letter should be friendly and have personality; the goal is to connect with the funder. It will summarize your program in a personal way, acknowledging any previous involvement of the funder, and how this project addresses the funder’s interests. In addition to the cover letter, you will include an executive summary that will present your program in a more formal manner. Both the cover letter and executive summary should include, a one-sentence statement about the program, the amount of the grant your applying for, the grants history with the funder, a highly condensed paragraph of you charities qualifications, one paragraph description of the program, a reference to the budget and a moving paragraph stating the difference this grant will make to your constituents and the community. Many funders will want to know the history of your charity. This is an another opportunity to personalize your proposal. Take your standard charity’s history and condense areas that don’t relate to your proposal and beef up those parts that do. Organize your history according to your principle accomplishments, highlighting heading with bold fonts and use bullet points to give prominence to your accomplishments. If you are a new organization, describe the history of how your organization came into being, and the background of your founders that motivated them to come together and start the organization. Testimonials and endorsement from other organizations can strengthen your proposal. Many funders will want short biographies of key personal on the project. These should be no more than a half page per person. You will need to enclose proof of your nonprofit status. On a separate sheet include a list of your board of directors and their affiliations, do not include personal address and phone numbers for your board members, Your funder will also be interested in any institutional funder who gave you more than $1000 last year. Finish your proposal packet with a general informational brochure, two or three press articles, and your annual report.
Clip your proposal together with a paperclip, and place it in a plain envelope and mail it by U.S. mail. Fancy envelopes and express delivery will look like wasteful spending to a funder. One week after you mail the proposal call to see if it was received and ask when you can expect to hear the results. Mark that day on your calendar and call a few days after that date to follow up. If your grant request is rejected remember to handle it with grace, you might be applying to the same funder in the future. If you receive the grant, call and say thank you. When you receive the award letter, have someone in authority sign it and return it with an acknowledgment letter that includes, a thank you, a statement that the grant money will be used as stated in the proposal, a brief statement of how the grant will benefit your charity, and a statement that the funder is receiving no benefit by making the grant. This statement will satisfy IRS regulations. A few days later, someone else for your organization should send a second thank you note, a note that does not repeat any of the language of the first thank you. If a member of your board used a personal contact to help secure the grant, she should use her personal stationary to send her personal thank you. Update your website, and anywhere else, you list donors to include your new funder. If it is a large grant you may want to issue a press release, but always get the funders permission first. Continue to keep your funder informed. Invite them to events related to the program, copy them with news coverage of the program, copies of your newsletters, and other publications that mention the program and any special publications created by the program. Funders will expect progress and financial reports on the project, at minimum once a year. Be sure to spend their money as you indicated you would in the proposal and keep careful records. Thompson’s book demystifies the grant process and makes you realize your organization can apply for grants. The tools he provides on the accompanying CD will insure you are successful in getting them.