Monday, October 30, 2006

Are There Grants for an Individual?

[Note to readers: Be advised that I am not a lawyer and am not giving legal advice in this or any of my Blog postings. If you need legal advice, hire legal counsel. This, and all of my Blog postings are intended as general information, only.]

You may ask me, "I'm an individual and I'm wondering if I can get a grant for something that I want to buy, or for something that I need to finance. Are there grants for individuals out there?"

I can not tell you how many times I have been asked this. People mean well when they do. I've been asked by minority women, folks starting up for profit businesses, and artists and scientists. I even saw an ad in our local newspaper posted by someone hoping to hire a grant writer to raise grant money to help buy a house for him/her.

I understand that many times people start businesses to increase their income and are starting from scratch. Similarly, people are hoping for finances to support their admirable goals; buying a home or creating a piece of art. All of these are things that our society does value.

First, let me be clear that a grant is the donation of a pre-determined amount of money, that is given without the expectation of financial pay back, and the money is given either at one time or over an agreed upon timeline. Grant donors usually expect to be able to claim a tax benefit for their donation and this requires (by federal and usually state laws, too) that the non profit be what's called a 501 (c)(3) non profit, which is roughly described by the Internal Revenue Service as an entity that provides service, support, or products and does not take income for their services, support, or products. (And if you're imagining it, you can not form a non profit to simply receive grants for your personal use. This is illegal.)

Grant donors (i.e. foundations, corporations, businesses, etc.) give grants for more reasons than just the tax benefit. They usually give grants to help those who are at a disadvantage in our society (i.e. of a low income household, a minority, returning to work after being battered, etc.). They also usually give grants in one or a few areas of their interest (i.e. the environment, Christian churches, to fight cancer, the school that they attended, etc.). In other words, grant money is directed to where the donor wants it to go. They want their money to have the greatest impact in the community, possible. This means that they'd rather grant a $5,000 donation to help say, 30 families, or 250 people rather than give that $5,000 to one individual. Also, grant money is not just available willy-nilly. Grant donors manage where the money is going, specifically how and on what the money is going to be spent, and often require a report after the grant is spent including what the benefits of their donation was, including receipts, and documentation to prove the results. They can have legal recourse to get the money back if it is not spent as it was agreed to be between the grant donor and the recipient entity.

When asked about the possibilities of getting a grant, to benefit an individual, I always reply: It is very unusual (and I mean 99.9% unlikely) to find grants for individuals. If you hear of one being offered, I would bet that it is a scheme of some kind.

In, fact, I advise you to be leery and very skeptical of anyone offering a grant for individuals, UNLESS (and this caveat isn't fail safe, so be cautious) the grant is offered by a municipality, government, or a personal benefactor that you know is honest and safe (and then I'd get an explanation of the donation in writing and signed by you and your benefactor). Governments are the safest bet if you hear that one is offering a grant for individuals. Each year the Federal, or maybe state, city, county, tribal, etc. government set aside money in their annual budget for specific support or assistance. This money, though, is usually directed to government partner entities in the community, or to non profit agencies. Not all governments budget for causes, and not for all causes, and the majority do not offer grants to individuals (and even if they gave a grant for an individual last year, it doesn't mean that they will this year - call and check). If they do, you will need to confirm by calling their office directly, to check if they are truly offering the grant. If they are an all is on the up and up; request the application form, get the due date, and be sure you know who can apply. For instance, municipalities will often only offer grants for perhaps minorities or women. It depends on what issues the grant is intended to serve in your community. Call and ask questions.

Even when a government offers a grant for an individual, the grant is often not available for individuals to apply for, but is available to non profit entities, only, to apply for, and receive. The recipient non profit would then disseminate the funds to the person that the non profit knows is in need (i.e. a client that they're serving, or a student attending their college in their art program, etc.). If you call and ask, the government will let you know who the intended recipient of their grant is.

If you want money and are intending to spend the entire amount on your need or goal (in other words, it will serve you or your family), then my suggestion to you is one of the following:

1. Locate a non profit in your area that can assist you in reaching the goal or need that you're wanting a grant for. For example the person who put the ad in the paper requesting a grant writer to help him/her buy a house would do well to talk with a housing assistance program that offers help to home buyers, or to a legitimate financial assistance program. You may get your goal or what you need without having to pay back money for the help. For every need/goal there is most usually a non profit in your region that can assist you - if you or your family are in need. Call them to get a feel for whether you are a likely candidate for their assistance.

2. Go to a bank, credit union, or other safe and reputable lending institution and apply for a business, or home, or supplies, etc. loan. If you are in need but have some income of your own, already, this is a good option if non profits don't feel you qualify for their assistance.

3. Write up a business plan and raise individual investors to support your business or project. These folks aren't giving you the money; but are expecting to be treated as investors in your venture and likely expect their money back in a set time period, with interest or they expect to earning some kind of regular dividend based on earnings. Be sure to get any financial agreement in writing and signed by all parties involved.

4. Hard work and time lead you to get your goal accomplished, too. Take a job, set aside the same amount of money regularly, to save to begin buying what you need or want to start (business, art piece, buying a house). Once your goal is up and running or is purchased, you can determine if it's financially feasible to quit the job. For instance, if you've saved and begun that business that you wanted to start on the side of the job you've taken, once you're making more money that your expenses and that amount could equal a pay check, research if it's time to quit that job and work for yourself; maybe it is!

5. If none of these ideas work for you, there are other ways to safely and legitimately invest in your needs or goals. Talk to folks in the field that you're hoping to work in, who you trust, or people knowledgeable about what you need about how to get financial support. Ask them how they did it and ask them for advice given your situation.

Another caveat: if you are a scientist or an artist and are trying to raise grants for your scientific research or your artwork; you are in a position to be able to apply for grants without special needs requirements. This is usually done via the institution, school, or company that you are conducting your work for. In other words, while the grant will be spent on your personal work, the money will be given to your employer or school and then directed to your work, as outlined in the agreement between you and the grant donor.

Do not apply for a grant that requires you to give your credit card account numbers, Personal Identification Numbers, debit card account number, or other personal identification information related to your money. Also, do not accept a grant that requires you to pay back the money (without interest, or with interest). A real grant does not require financial pay back. No legitimate grant application will ask for this kinds of information.

If you do receive a legitimate grant from a legitimate entity (i.e. your county gave you a grant for an art piece your going to install on Main Street), they may require you to provide them with a budget of your expected expenses and for a financial statement of your income and expenses. This is not unusual. They may also need your Social Security Number for tax requirements. If they do, ask them why they need the information. They should also provide a written agreement between you and the grant donor, that you both sign and receive copies of, that clearly states the nature of your agreement with them and that the money is a donation.

In any and all financial situations between you and another person or entity, get professional advice as to its legitimacy and the fairness of the agreement, to be safe. Ask a lawyer, a financial adviser, and other professionals that you trust for their direction.

To locate resources that are set up to assist those in dire circumstances, read my post, A Bit More for Individuals Looking for Grants


Bottom line? Everyone needs more money than they have, but no one gets a free ride. This is why if it sounds too good to be true, then it most likely really is. Listen to your gut. You'll most likely have to locate the financial assistance that you need in the traditional channels suggested above. If, though, you are a low income household, a minority, returning to work after having been battered, handicapped, a youth on the streets, etc. then there are programs out there that can assist you legitimately (local governments, non profits, religious groups, schools, etc.). Please access them.

In your good efforts I wish you luck, and I understand needing help. But, I urge you to be very cautious of grants offered to individuals. They are mostly a scam.

Tuesday, October 24, 2006

Why Is Marketing Important In Grant Writing?

Marketing isn't just important to your non profit's grant writing; it gets your name in front of everyone; potential donors (grant donors, major donors, corporate donors, etc.), potential clients, other non profits working for the same cause, the general public, etc. Marketing your organization; its name, its work, its track record and successes, connects your organization to people in your community.

Making your non profit's name and work known to the community may sound like something that 'would be nice for your organization, but isn't high on the office's 'to do' list', yet.

Consider marketing strongly before putting it off.

You work for Big City's Rollerskate Museum and with all of the recent growth in town, your colleagues conducted a study and found a predicted increase in interest (an increase in visits to the museum and increased membership and donations) over the next ten years. This led your board and key staff to plan for the growth and plan for the increased fundraising need. You and your org's staff and volunteers are going to work to raise $3 million during a capital campaign that starts in three years. A marketing plan is going to increase the money raised for your capital campaign because it will help educate potential donors about who your organization is and what you do; and marketing will reach more people in a given space of time than you could. If a two minute radio ad reaches 10,000 listeners, locally, with basic information about your group, and how to donate; how could you possibly reach the same people, personally, in two minutes; and more importantly, raise the number of donations that the radio ad will generate?

Your organization is like every other organization; increased needs are on the horizon for each of us. Every non profit faces an increased need for money. If your organization isn't planning an increase in staff, programs, or other organizational business in the future (which is rare); then the cost of living (i.e. gas, rent, utilities, salary etc.) will go up sooner than later. All organizations are always facing how to both maintain current operations, financially, and also raise the additional increased financial resources necessary for growth (even if it's just the organization's cost of living that increases).

To raise donations you must compete with every other non profit that also needs money. How will you do this successfully? By getting the word out there that your organization meets its specific need that it addresses in the local community; and that no other organizaiton has achieved the benchmarks that your non profit has with the level of success that it has. Your mission and track record will set your organization apart because it's where your group becomes unique.

In order to put your organization's name in front of the largest number of potential donors, and to educate people about what your organization does and how successfully it meets local needs; you must develop marketing tools. These assist in every aspect of your organization's operations; not just grant writing or fundraising. Your agency's mission statement and its goal benefit, too.

Each of the following are marketing tools; a strong website; a regular Blog; Internet bulleting board to generate dialogue; E-mail updates to clients or colleagues; agency newsletter; regular press releases; tv or radio commercials; billboards, attending conferences to speak or with an information, service, or recruiting booth; conducting classes; having staff or volunteers publish in your field; recruiting board members with strong financial and community (business or social) ties; developing stickers, t-shirts, buttons, pencils/pens, etc. for hand outs; telephone banks; your staff and volunteers telling their friends, colleagues, and family about your organization and its work; developing leave-behinds (i.e. an information sheet, an information packet, etc. about your organization); attend local professional affiliation organizations in your non profit's field and talk to the group about your org, etc.

Which marketing tools is right for your organization will require planning future needs and goals and then weighing the cost/benefit ratio for each marketing tool, considering which marketing items will help the most, what information should go into the marketing piece, and which tools are the most effective for your potential donors and region. Often, this requires that your organization hire a professional marketing consultant, at least in the planning phase, who will work with your board and staff. The consultant will direct your planning and help you decide what is necessary and which marketing tools will provide your organization with the most 'bang for the buck'. Ask colleagues at other non profits who have recently ran a successful marketing cmapaign, or ask local affiliates of reputable national or local marketing organizations if they have a list of consulting marketing professionals in your area.

The money spent on marketing will come back to your organization in increased benefit. How? The more that a foundation's program manager, say, hears your organization's name or reads about your mission statement - the more familiar your organization and its work is to him or her. This helps if, say, you've applied to a larger local foundation two times in the past and have not yet received a grant - it may be because they aren't sure who your organization is or how successful it is at its work. Their own knowledge, as local members of the community, is often very important in a foundation's decision to give a grant or not. This can especially happen to non profits who may have existed (even successfully) for years, but is only now starting a grant writing program in its fundraising work. This is equally true of donors of all kinds. The only way that a donor can decide to give to your organization is if that donor knows about your organization and its work.

Marketing is important to each aspect of your non profit's work and so, everyone involved in your organization's work is important to marketing. This doesn't mean that each volunteer or staff member has to be a terriffic public speaker. What it does mean, though, is that even say, a social worker, working for your organization can provide a plug for your organization at a program that they run. Or, a board member volunteering for your environmental books publishing organization can tell a colleague, or three, about your non profit and its recent successes, at their next corporate retreat. Everyone involved in your work can contribute.

Simply put, specifically to grant writing, marketing is an investment into increased fundraising success and attributing your agency's great work to your non profit's name to increase local awareness on the greatest scale possible. What non profit couldn't use this kind of help?!

Tuesday, October 17, 2006

Seeking Grants for New Programs Or Start Up Non Profits

Fundraising planning must be a new non profit's priority.

My point is underscored by a real local agency doing needed important work. This agency is seven years old and just starting to grow. At its start the organization's administration was sincere, but sporadic and distracted. Now it is being run by organized, committed, and concerned volunteers, who among other improvements hired their first Executive Director. The Board is being developed. They are also expanding services to meet new local needs.

With the expanded services comes the need for more money.

Their only method of raising money has been writing grant requests. Today this organization is eager to raise the money to hire a part time Programs Manager and a part time Volunteer Manager (who may wind up being one employee working these two positions).

They're in an exciting time in their growth. This org is transitioning from one with goals; into an organization meeting needs. This is a great accomplishment for the local underserved population that they work to assist.

I understand that the volunteers and staff of this organization are eager and excited to provide the much need services to their constituents. I understand, too, that they are not fundraisers, first. Rather, serving the community is their whole motivation and THE part of this agency's work that they enjoy. But, I have a few concerns that they can address now, to do something as basic as secure the future of their organization!

Concerns:

1. This organization has only been raising funds through grant writing. While it is one avenue of fundraising that start up non profits should develop, it is not enough to expect all of your agency's cash flow to come from one revenue stream ever, even while starting up! Add other methods, maybe special events, annual appeals, bequests, online donations to your website, a regular request in your quarterly newsletter, major donor development, corporate sponsorships, etc. to your fundraising plan. One method of fundraising is dangerously not enough for any organization (large or small)!

2. They plan to develop their fundraising. Right now they are looking for a consulting grant writer. Some day they'll hire fundraising staff. Again, this is dangerous. On average it takes three years to begin to actually receive more funds than it costs to raise them from a new fundraising method (and this varies depending on the method of fundraising). Let's say that this organization begins a major donor campaign in 2007, to develop local members of the community who will give to their organization at large gift amounts. This means that they can expect to make more in donations than they're spending towards the major donor program, only beginning in 2010. Yes, it takes this long and costs that much; but the long term benefit is financial security. Long term vision and planning are key! Volunteers and staff are requisite in order to implement multi-method fundraising plans. The cost/benefit ratio must be researched.

3. Any entity (foundation, government, major donor, corporation/business, etc.) who may donate larger amounts to this organization's great work will expect that they are giving to a sustainable program or project. If there is no indication that the agency can sustain itself, its' growth, or its' programs/projects; then donors will not see why they should give. Organizations who expect to succeed in their growth must complete their due diligence in their fundraising work; there must be a well rounded development plan (or fundraising plan) that the Board and Development staff have agreed upon and implemented into action. Non profits are always under stress to meet fundraising expectations, but if planning is realistic and based on what is truly reasonable to expect (given the organization's past fundraising capabilities, the local community's fundraising climate, the level that the local community is saturated by the fundraising strategy that you're implementing, etc.) then the fundraising goal will be met!

4. In the beginning of a program or project grant funders like to get involved from the outset. At the point of initial planning call the foundations that you're considering asking for assistance (if they don't mind calls) and tell them, 'we're just starting out the planning of this upcoming project, we thought you guys might want to work with us to meet this project's goal in our community'. But, after the project is underway don't expect these donors to give again. You will have to have developed a fundraising plan based on the project's budget that will sustain this project. For instance, if you are expecting a salary to repeatedly be raised year after year through grants, please think again. Overhead is not a favorite budget line item that grant donors will regularly support. In the fundraising plan get the salaries off of the 'to be raised by grants' list. Instead, raise the cash flow for salaries maybe via annual donor support, or annual special events, or some other more reliable annual method.

The Point:

Fundraising must be a start up non profit's initial concern.

In order to raise funds you must have planned out your organization's fundraising strategy, goals, and plan; and implement them. Donors only give to orgs with futures.

In order to support the growth of your organization (which will involve marketing, starting new programs, hiring staff, raising larger dollar amounts, growing a volunteer base, training, and managing increased administration) there has to be money being raised that pays for the current agency work AND the additional (increased) agency's work in the future.

In order to secure the future of your organization, and more importantly, to be sure that need in your local community that you're addressing continues to be given assistance; you must have a healthy, diverse, well researched, and realistic fundraising plan.

A word to the wise; strategic fundraising planning can not be an afterthought. It must be among the first work a new non profit plans out and does.

Tuesday, October 10, 2006

Why Do Donors Give Grants At All?

You're grateful that there are grants in your community to apply for. Your organization is a strong one with a great reputation. You've done a great job (or your executive and board have done their work) at getting your agency's name, work, and reputation out in the community. Your organization is innovative, collaborative, communicative, honest, well managed, and successful. You and your non profit have been very successful at raising grant donations.

While you are thankful, you wonder how is there such a proliferation of donation options 'on the table' for your organization and other non profits?

Foundations, corporations, local businesses, governments, individuals, families, estates, and all others who donate grants do so because:

1. They care about some particular issue or issues to the point of wanting to get involved.
2. They have the financial capacity/ability to donate grants.
3. They want to contribute to the community or society and see positive outcomes.
4. There may be a financial bottom line benefit to corporations or other for-profit entities that donate grants, expertise, or items in kind. But, money is not always the motivation behind donating, even for for-profit enterprises. And, even if their motivation is less altruistic than some, businesses' good works are equal to any other good deed!

Some are brought to donating grants through personal experience, or sudden needs in the community. For instance, perhaps a family has sadly struggled alongside their loved one while he or she battles cancer or an addiction. Or, perhaps a sudden need made itself known, locally, when a large piece of private land went up for sale, and word is, a local developer is ready to buy and build on it. The family may decide to fight cancer the one way that they can; providing funds to researchers, or to organizations assisting those with cancer. Maybe a shipping tycoon loves the forests, watershed, and animals on that piece of private property and wants to out bid the developer, to donate the land to the public as a park; preserved from development forever. To go one step further, maybe they see where they could assist with other projects in the same cause in the future. From this vision they decide to form a foundation to give grants indefinitely.

Others appreciate the effective, reputable, honest, ethical work of a single non profit (perhaps a university's research department or a heroin rehabilitation program) and have set aside grant money to be given to that organization for X number of years into the future.

Governments who offer grants may be directing federal (grant) dollars (allocated by the President and Congress for specific causes or diseases, etc) into their jurisdiction to the benefit of their community. Government may also be aware of a specific problem uniquely plaguing their community and may allocate some of their own local budget to fight this problem (such as domestic violence, minority owned business support, the need for art in the community, etc.). Keep in mind that governments can be cities, counties, states, federal, tribes, etc.

The bottom line is that those who donate grants do so because they want to get involved. They want to see that their money and efforts provided effective outcomes in the community. They want to find reputable successful partners in the community who they know they can give grants to again, in the future, to get the intended work done. This is really important to keep in mind when prospecting for potential grant donors, when forging relationships with potential or actual granters, and when reporting back to the grant donor after the grant project/program is done. If you keep in mind why your grant donor is involved it will help you both to work to your community's benefit in a partnership. This is the key. Relationship building!

Tuesday, October 03, 2006

Waiting For A Response To Your Grant Request

You've sent off six grant requests asking for $30,000 each. Your organization, Model T Restoration Effort, needs to provide four Model T's, in your organization's museum, with refurbished motors.

You researched what foundations would likely be interested in supporting Model T Restoration Effort's project and mission. These six foundations appeared, after reading their grant guidelines, to be prime candidates. You contacted their program managers (they all encouraged phone calls to begin the grant request process). After talking to the first foundation, their program manager suggested that you also request funds from two other local foundations interested in old cars. He thought they'd enjoy being involved. Most grant donors do not wish to fund the entirety of a new program (or whatever the grant request is for), so it is best to apply to several grant donors for portions of the total amount needed to begin and/or run whatever the grant request is for.  Some grant donors do not mind a grant request coming to them asking for the total amount needed.  If this is the case, they will indicate this in their giving guidelines.  Let's say that that after prospecting for grant donors, we located six viable potential grant donors who do allow applicants to request the full amount needed from them.  This lead you finally deciding to request the full $30,000 from each of the six foundations that you applied to.

Your volunteers and staff know that if you could get these four antique cars operating, it would generate some income (from Model T rides on Saturdays) and it would encourage more interest in the Model T (by the public riding in an actual refurbished Model T car).

Your Executive Director and you and your Board are eager to get those Model T's engines working. Now, you have to wait to hear back.

Each foundation's guidelines are different. Some indicate in their guidelines how long the grant application process is. For instance, the We Love Old Cars Foundation states in their guidelines, "Grant applications are accepted four times a year; March 2, June 2, September 2, and December 2. Within three weeks we will respond to your request to let your organization know whether we accept your request. If we do not, we will indicate in writing why we are not accepting the request. If we do accept your grant request we will inform you in writing, and if there are any other materials that we need to make our decision, we will request them, then. If your grant request is accepted, within the four following weeks after being notified that your request was accepted, you will be notified as to whether we are going to fund your project or not. If we do not fund your request, please know that we are limited to our capacity to provide funds, and in no way are commenting on your project or your organization's work."

This foundation has laid out clearly for your organization what is going to happen and when. If you have applied to a foundation that does not state this kind of information in their guidelines do one of two things. If the foundation doesn't mind phone contact call them and ask what their process and timeline is. If the foundation doesn't want personal contact ask colleagues at other non profits who have requested grants from the foundation what the foundation's process and timeline was in their experience.

Do's and Don't's During Your Wait:

Be willing to follow the foundation's process and timeline. If the foundation requests additional information for your grant request (i.e. a list of each Board member's current or retired job, a meeting face to face with your Executive Director, or a visit to your museum, etc.), get the information that they requested to them in a timely manner. Do not hound your contact at the foundation.

Feel confidence in your organization's success, track record, reputation, collaborations in the community, and the number of grants that you requested and received in the past.

Also, feel confident in the number of requests that you submitted. Submitting six requests for the full amount (because for each foundation it was appropriate) insures better odds. The foundations will likely discuss your request within their own foundations, and then among the other foundations that you also submitted requests to (because as you've read in previous posts, here, they do know and talk to one another). If one organization submits the full amount - then, your project is set. Or, your project is also set if the foundations decided among themselves to each contribute amounts to total $30,000. If, though, one foundation provides a grant for $5,000 and only one other provides a grant and it's for $10,000; then you do have another $15,000 to raise - but you are half way there. You could, then, go to your major donors or other potentially interested foundations/donors and let them know that the two foundations have granted half the money needed; and ask could they match the rest. Receiving even one grant for part of the total amount you need leads to to the strong potential to raise the rest of the money. If potential donors learn of the local commitment to your project (even just one foundation's partial donation towards the whole amount) they will feel more confident in contributing, themselves. This is also a form of community building.

When you receive a grant proposal response; open it with confidence and a strong determination to see the project or program through, no matter what the response will be.