Grant strategies to build nonprofit capacity
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What is your nonprofit's annual revenue?
$1m - $2m
Local Community Nonprofits
When the phone rings here at SG HQ, it's usually a chance to have great conversations with people in the nonprofit sector – whether it's chatting to an organisation I know well or connecting with one for the first time.
Occasionally, though, I get a tough phone call, and they often start like this:
"Our government funding runs out in six months and we need grants!"
These conversations always bring home for me three important lessons.
Diversity is key to sustainability
No matter what the source of the funding – government, corporate, philanthropic – the old adage about eggs in baskets is truer than ever.
Having one major source of funding, however long-term it may be, opens your nonprofit up to the risk that, if that source dries up, you will be unable to continue to deliver services, or even to operate at all.
The key to sustainability is having diverse fundraising streams that allow you to manage risks and prepare for a time when one or more of those streams may diminish or become much harder to maintain.
Although we too often see organisations who have been reliant on government funding left in this situation, it applies just as much to any other funding source: an over-reliance on personal donations or corporate funding, for example, could be your undoing in an economic downturn.
How, then, do you diversify?
Planning and timing are everything
Fundraising planning is imperative to building a sustainable and diverse model.
If you don't have these skills within your organisation, there are people who specialise in helping, and can provide a valuable fresh perspective (just be sure to do your homework before appointing someone).
When you do this planning can be just as important as how you do it.
If you're trying to do this planning at the point where one of your main sources of fundraising revenue has ended or is about to end, it may already be too late – or at least it will be much more difficult.
If you don't already have plans in place for diversity and sustainability, then now is the time: make them and implement them before you become aware of just how much you need them.
Planning for sustainability will also help you identify where each type of fundraising fits in your organisation (grants included).
Grants play a specific role in fundraising
Sometimes nonprofit organisations still see grants as a solution to their problems: there's money out there, so we'll get some of it to carry on doing what we do.
But like any form of fundraising, grant-seeking needs to be done well and with a clear understanding of where it fits into a broader strategy.
Grants, in general, are awarded for time-limited projects or activities. They are not a suitable source of funding for the day-to-day running of your organisation.
What's more, funders seek to invest in those organisations who have the proven capacity, and financial stability, to deliver the best possible social outcomes.
Grants also often have a long lead time: there might be six months or even longer between preparing and submitting your application, and hearing the result.
You need to be selective about what you apply for, ensuring that the funder's timeframes fit in with your own.
When done strategically, grant-seeking is a great source of funding for nonprofits. But ensure that you plan ahead, diversify, and invest in more baskets for your eggs if you need to!