Tuesday, January 02, 2007

How Do We Afford Grant Writing?

[Note: This post specifically addresses how NON PROFIT entities can pay for grant writing services or staff. If you are an individual looking for grant money, see my post about Individuals and Grants http://thegrantplant.blogspot.com/2006/10/are-there-grants-for-individual.html]

Applying for grant money (especially as a start up non profit or for new programs or new projects) is a great way to raise donations that should not be avoided. Grants are important ways to raise money because usually they are larger amounts than an individual donor gives in one donation; grants are community support for your organization, project, or program; and the most beneficial outcome of receiving a grant is that the grant donor (i.e. a foundation, local business, local government, etc.) likes what you are doing, likes your organization, and sees a future for your work and mission statement. That is a vote for a future donation and it should not be taken lightly. Developing this relationship will be important to your organization's future fundraising. No organization can afford to ignore any of these benefits. See my post http://thegrantplant.blogspot.com/2006/11/dont-leave-money-on-table.html

How, though, do you apply for grants if you don't have the staff, volunteers, or money for a contractor to do the grant application work? You may know that it takes a coordinated effort to raise grant money. The person who is going to apply for grants for your organization is going to have to understand what work is done at your organization, specifically what projects and programs are happening now, and what work your group is planning for the future. The grant writer will also have to understand what your fundraising work is and what was done historically to raise money. Next, they will have to research who will donate to your agency (based on your mission, cause, and work) and they will have to whittle this list down to 'who will most likely donate a grant to us based on our work and mission and their history of giving?' (i.e. which projects/programs do they like to fund). Frankly, this is a lot of work and it takes someone who is dedicated to completing the grant raising process and can follow through. You can't just pick one of your volunteers or a staff member and ask them to get your group $10,000 in grant donations. You can, I should say, but you shouldn't expect specific results if they don't have experience successfully raising grant money. Consider, too, that getting a staff member to raise one grant for a project or program that they're heading up next year is one thing. It's quite another to have someone dedicated to raising grants for your organization regularly, and for all new programs and projects. This is an investment in not just your upcoming programming, but it's an investment in your organization's overall revenue stream.

This leads us back to your question, above. How do we raise grant money if I can't find staff or money to do so?

1. Plan. You must plan. The planning should involve determining what program(s) or project(s) will require grant money. Perhaps they're each partially paid for by your current operating budget. So, maybe you're hoping the rest could be covered by sponsors and grants. The planning should also include creating a description of the project or program including all of the details (who, what, when, where, why, how). Also state what the expected outcomes are and how you will determine if these were met or not. A budget, date, location, list of staff/volunteers, expected clients/attendees, etc. must be included. All of this information will need to be handed over to the grant writer who will include this in the grant application.

2. Give Yourself Time. Your planning must be done well in advance. You can't start planning months or weeks before the project or program and expect that this allows enough time to raise a grant. Raising grant money takes time. Expect to plan at least a year before your project or program starts if you are also needing to hire a grant writer. You will have to hire a good grant writer (staff or contractor), they will need a small amount of time to learn about your organization mission and projects. In addition the application process to apply for the grant will take at least 3 or 4 months, usually. You, of course, can try to locate a good grant writer volunteer but these are rare; most grant writers who are good at what they do charge for their professional service. Do not plan on finding a volunteer grant writer who IS GOOD at what they do. See my post http://thegrantplant.blogspot.com/2004/07/what-are-steps-to-hiring-grant-writer.html

3. Implement a new or additional revenue stream to raise money specifically for the grant writing work. Perhaps you don't need to start a new fundraising event or appeal. If there are costs in your current annual operating budget that can be cut, re-allocate that money to the cost of a grant writer. Then you have that much less to have to raise in extra 'new' fundraising. If you are going to begin a new fundraising method specifically to begin to raise and save money for grant writing costs - keep in mind that it takes approximately 3 - 5 years to begin to MAKE MONEY on a fundraising method.

If none of this leaves your organization with enough potential to begin that grant writing that you need - take a dedicated major donor (who gives regularly and usually in large amounts) out for lunch and tell them about your agency's need. Ask them if they can support your grant writing costs. You may also want to consider sending an appeal letter to your regular individual donors and ask them for a set donation amount to support your organization's grant writing needs. I must warn, though, that these two suggestions do not allow for future sustainability. If you get a one time large donation from one of your major donors and some substantial amount from your one time appeal to your individual donors; you will still need to raise the same amount of money for your grant writing (if not more) next year.

4. The best plan is to set aside any extra donation money raised this year to save towards a new grant writer, and budget for a grant writer in your annual operating costs for the coming year and thereafter. If there isn't room to add this cost then go to your Board, Development staff, and Development Committee and ask them to work with you to plan out and then implement additional fundraising for the additional new cost to pay for grant writing. It is an investment in your organization's future. If your organization's managed well; the cost of grant writing will be far less than the grant money raised. Pull the numbers together and study the cost/benefit ratio.

This leads to a very important point. No portion of a received grant should ever be paid out as a commission payment to a grant writer (i.e. writer's payment contingent on receiving a grant) because the grant writer is providing a service, as a lawyer or an accountant does. Grant writing is a long term fundraising strategy requiring more time than it takes to form and mail one grant application. Grant writing, as a component of the agency’s overall Development Plan, is an investment in acquiring donations. Any consultant should mostly be removed from the relationship between a non profit and potential donors. Staff grant writers should also be removed from the relationship, as your organization will want to have 'peer to peer' contact with grant donors. This means that if a representative from a potential grant donor contacts your group you'd want them to talk with your Board President or agency Executive Director so that they understand that you take the communication (or relationship with them) very seriously and it's important to your leadership. Lastly, foundations do not want to pay for a non-profit’s grant writer fees. A grant is given to any non profit because the money is intended to go to meet the non profit’s program or project, not to a consultant. If a grant donor finds out that you're using their donation to pay for grant writing costs (and not using their donation to meet the need in your community that they gave the money to your organization for) they may never donate to your group again; and worse, they may share their experience with you with other grant donors. This could be a catastrophe for your organization and its future.

Grant writing is a sound investment; I'd argue that it's a critical one. It requires planning, saving, and allocating annual operating money, or budgeting. It is a part of your organization's total fundraising plan and therefore also a part of your organization's fundraising cost. Grant writing is an investment in your group's future programs and projects and if your group's operations are managed well; the cost of grant writing should be much less than the money that your grant writing brings in annually (if they're staff, probably after two years; if they're a contractor it should be from the start).

You can afford grant writing and need to as no group can afford to leave money on the table.


Anonymous said...

I need to prepare a case study dealing with the cost benefit analysis of hiring a grant writer or professional fundraiser. How do I find the figures to give them?

Arlene M. Spencer said...

Dear Anon, I would contact at least two grant writers who you want to work with potentially, let them know exactly what services and products your organization will need, and ask them for a quote. You can use their quotes (give the dates of them) as reasonable and current costs. You can also budget for this expense based on these quotes. If the grant donor requests it, you may also include copies of their quotes in the grant proposal. Be sure that you figure all costs (not just the consultant's expense) in the budget for the grant writing work (e.g. postage, subscription to prospect for potential donors, your time, anyone else's time involved such as the bookkeeper, etc). Good luck! Arlene

Anonymous said...

Hi Arlene,

Would it be smart to learn how to become a grant writer and utilize the training to write my own grants for my start up non-profit organization?

Arlene M. Spencer said...

Dear Anon,
Hello, and thanks for reading and commenting.

As is so often the case, it depends.

The thing is you will be starting a brand new organization (which entails a lot of networking), you will be launching the organization's programs, and then also learning and implementing a new grant program. Truly, this is A LOT of work.

If you have a strong board that is made of members with excellent, recent, successful experience in the various areas necessary to launch and then grow a nonprofit (i.e. fundraising/donor care/management, board development, volunteer recruitment/management, program design/management, networking and connecting with others in the community, plus the usual admin; then you might have the 'room' and realistic time in your schedule to do this. If, though, you are the only team member (for now, ideally), or if it's just two or three of you - you might want to consider pinpointing a really excellent local grant writing and work on recruiting them to the board and hand the responsibility over to them.

If you do go the route of learning on your own, welcome, and be sure to look at our blog post labels (lower right hand side of the web page), especially "how to"; and look at the resources we recommend (upper middle left hand side of blog page) and other blogs we recommend (blog roll, left hand side of web page). My blog and tons of other reputable ones, online, are excellent resources to learn from (and are economical: free!).

I wish you the very best in your endeavor for the community! Arlene