Grants: 101

Next to making personal fundraising asks, grant-writing is probably the tactic that scares new fundraisers the most.  Grants seem mysterious and technical, and it often seems as if it takes some kind of magic mojo to find the right grant, write the perfect proposal, and get your project funded.  I’m here to tell you that while there really isn’t any mojo involved in the grant process, there is lots of hard work, and a good bit of frustration.  That being said, most mid- and large-sized ministries find that grants make up 15-25% of their total fundraising revenues.

If you’re really new to fundraising, and aren’t sure which grants to seek and the in’s and out’s of the grant writing process, take heart because it’s not rocket science.

Grants are simply sums of money given by a “grant-maker,” usually a non-profit, corporate, or family foundation.  In order to be awarded the grant, the charity seeking the grant must go through an application process, which is often a long and laborious process. The grant-maker then makes a decision and awards the grant.

Types of Grants

Grants take on an unlimited number of variations, types, and mutations.  Some grants are one-time grants, others are multi-year.  Some grant-makers fund capital projects, others fund growth initiatives, while still others only fund general operating expenses.  Some grants are given on an ongoing, rolling basis, meaning that you can apply at anytime during the year and decisions are made several times per year, while others only decide on proposals once per year, or even once every two or three years.

Types of Grant Applications

Just as the type of grant offered varies from grant-maker to grant-maker, so does the application process.  Some foundations allow you to simply submit an application, which may range from 1 page to 10 pages or more.  Other foundations may ask that you submit a “letter of intent” (LOI) or query letter that summarizes your request, and then, once that letter is submitted, you may or may not be invited to submit a complete grant application.  Other foundations may even require a site visit as part of the process.

Follow the Program

No matter the type of grant or process for application, be sure to follow the directions of the grant-maker exactly.  I often tell charities that writing grants is like applying for the Publisher’s Clearinghouse Sweepstakes.  There are lots of hoops to jump through… lots of things to place here, attachments, schedules, financials, signature pages, checklists, etc.  Follow directions to the letter, if you want to have the best chance of having your grant funded.

Research is Key

Perhaps the most important step in raising money through grants comes before the grant proposal / application is even written.  Before you apply for a grant, do some research, and be sure that you meet the foundation’s criteria.  Grant-makers have lots of different areas of specialization, and a single grant-maker may offer three, five, or a dozen different grant programs.  Be sure that your charity and project meet the objectives of the foundation, or else all of your hard work will be for naught.

Most foundations list their criteria on their websites.  Do some research to find out what the foundation’s area of interest is, what programs they offer, when their deadlines are, and what their average grant size is.  There’s no point applying for a grant from an organization specializing in funding dog shelters in southeastern Kentucky if you are running a high school arts program in Maine.  Likewise, if you’re looking for $200,000 to start a new homeless shelter, it will take lots of time and efforts to raise that money if you are applying to foundations with an average grant size of $1,000!

Writing Grants: There is No Secret Formula

Once you’ve found a program that you think you qualify for, it’s time to write the grant proposal.  The truth is that there is no secret formula to writing successful grants.  The only true do-or-die for grant writing is to follow the directions of the foundation offering the grant, and make sure you include all of the information they request.

Some other tips that will help you succeed are to be sure you write in good, crisp, readable language, to make sure you present your proposal in a business-like fashion, and to use emotion… foundation executives receive lots of proposals, so to make sure yours stands out, you’ll need to tug on the heart strings a little bit (but not too much).  Finally, if you have questions, go ahead and pick up the phone and call the foundation to ask.  They won’t bite, and often, calling will help you get a leg up by letting you tailor your proposal exactly to the objectives of the foundation, instead of what you think those objectives are.

The Delusion of Foundation Gifts

The loudest kind of gift in fundraising is the “grant.” Ministries can shout from the highest rooftops about grant funding, donations that average from ten to twenty-five thousand dollars, because the foundations appreciate the attention. There certainly are big grants to be realized for organizations in the religious sector (according to the Foundation Center 2012 Report), the average gift is $90K, the median $20K.   When ministry leaders read about “that other organization” that benefitted greatly through a certain foundation’s gift it’s especially tempting when the organization is struggling to raise funds.

However, seeking grants is a cruel mirage to naive and unfocused ministry leaders. Following are the top seven myths about foundation grants that trap unsuspecting ministry leaders and boards.

  1. Foundation’s give more than individuals. Not true! In fact, just 14% of all giving in the US comes from foundation grants, while 73% of gifts come from individuals, according to the 2012 Giving USA report.
  2. Unlimited opportunity. While, there are more than one hundred-twenty thousand foundations in the United States, according to The Foundation Center 2012, just 2% of all grants are made to the religious sector. The rest of the grants are given to education (23%), health (21%), human services (15%), public affairs (12%), arts & culture (11%), the environment & animals (6%), and the sciences & technology (4%). This means that, 98% of them will not fund your ministry. Out of that 2%, there are probably less than ten viable prospective foundations that will grant large dollars ($50K+) to ministries like yours.   Keep in mind too that their first gift will likely be a small one to test how well you steward the gift and how well you follow up. Most foundations will give a maximum of 20% of your overall need to a project or opportunity. They want to be assured that they are giving to ministries that are well managed and financially supported by other engaged-givers.
  3. It’s easier than donor development to individuals. Wrong! Instead of working to convince just one person or couple, large-dollar foundation grants are usually decided by many people including an administrator, and a board or committee. Like individual development, successfully securing foundation grants is about building relationships, except there are a lot more people in the equation. This is why it’s so important to connect with a member of a foundation’s board and get to know the administrator so that you can learn what it really takes to be a qualified candidate. More than that, your ministry will have a far greater chance to win a grant if you have an “insider” that is championing your requests.
  4. We can hire a “grant-writer” to do all of the work. (This sounds just like ministries that hire a development director to raise all the money…and how’s that working for you!?!) Yes, part of this statement is very true. A grant writer is an invaluable resource in this process. They can help you avoid many of the most common mistakes as well as help you to steer clear of those grant opportunities where you have little chance. However, no grant writer knows your organization like you do which is why you need to plan to invest a great deal of time working with them. So if you hire one, and the better ones are not cheap, plan for a long-term relationship (5 years minimum). The upfront time commitment to get them up-to-speed is lengthy, but after five or six grant requests, they will be able to work more independently. Understand that your success rate, when compared to other qualified applicants without insider relationships, will be no better, so expect to be turned down often.
  5. Great ROI (Return On Investment). Many believe that the time it takes to apply for grants is relatively small, especially when there is a chance to bring-in a large gift. Most believe that even if they apply for twenty grants and just one actually win’s funding, it can be seen as a victory. But the reality is that ministries that take this approach spend more than 40% of their “development” energies that end-up raising less than 5% of their budgeted income.
  6. It’s easy. The average number of attempts before successfully getting a grant is 8! 45% of grant applications are rejected because the applicant didn’t fill in the required information, or did so improperly. Of those that get through, 50% are rejected because the foundation does not fund the kind of organization or specific kind of need, or does not fall within a certain geographic boundary. Of those that get through that process, 80% are rejected because no one on the foundation’s board knows anyone affiliated with the applicant’s organization. (source. Foundation Directory Report 2012)

I don’t write this to dissuade any ministry from applying for foundation grants but as a way to punctuate the point that doing so should be a part of, not substitute for, a broadly balanced approached to raising ministry partners.

There is no magic bullet in raising large-dollar gifts, especially when it comes to foundation grants.

Conversely, gifts from individuals, even when they are significantly larger donations, are usually quiet. Those who give to ministry work are often giving as an act of worship. They practice the Matthew 6 Principle in that they try not to demonstrate their righteousness before men.