If you are part of a nonprofit thinking about applying for your first grant, you will find lots of guides to researching and writing proposals. You won’t hear as much about the things your nonprofit organization should do before applying for a grant. Here are four steps you can take before you formally apply for nonprofit grants that will simplify the process for you and your organization:
1) First off, you’ll need to secure either federal tax exempt status for your nonprofit or a partnership with an existing agency to act as your representative.
The terms nonprofit, tax-exempt, charity or more technically 501(c)(3) are used interchangeably for organizations that pay no federal income taxes don’t seek to make a profit. Only recognized nonprofit organizations are eligible to receive most grants. You will be asked to enclose proof of nonprofit status with every grant proposal.
If your organization doesn’t yet have 501(c)(3) nonprofit status, it can ‘borrow’ tax-exempt status from another organization that already has it. This is called fiscal sponsorship. It is a common process for organizations just starting out. If you want to go this route, you’ll need to include proof of the sponsor’s tax-exempt status in all grant proposals.
2) Next, you’ll want to professionalize your organization with a well-crafted mission statement and a strategic plan that have the support of both your board of directors and senior staff.
One of most important things you need to establish in any grant proposal is the stability and sustainability of your nonprofit organization. Most potential funders will want assurances that their money is going to an agency with strong leaders who have proven themselves capable of implementing the project described in the proposal. Is your organization credible? Does it have capable leadership in both governance and management? Does it have a solid track record of programs and services? Mission statements and strategic plans are both great places to establish who you are, what you stand for and what you have accomplished.
As for the difference between mission statements and strategic plans; think of a mission statement as the place to sketch the grand over-arching mission behind your organization, while strategic plans are about more specific and immediate concerns. Your strategic plan should focus on what you are working on and what you want to accomplish in the coming year and it should be updated annually to reflect the growth of your agency.
There is an additional benefit from having a professionally-crafted mission statement and strategic plan when the time comes to craft a grant proposal. Some important elements of the proposal can be culled and condensed from strategic plans and other existing documentation. You can then use these elements in different ways across different grant proposals.
3) Establish reliable funding sources from a donor base and client service fees, etc.
Grants need to be thought of as part of a long-term plan to fund your nonprofit, not as a quick-fix solution to financial problems for the organization. Grant writing needs to fit into a larger funding plan including volunteer drives, fees for services, and in-kind gifts from local businesses.
Start by developing a donor profile to figure out where your organization is already getting money from and how much you receive from each source. A good candidate for a grant is an organization that already has funding on hand, but could do more good with access to more resources.
4) Engage in collaboration and partnership with organizations doing similar or related work in your local community.
Foundations are placing greater emphasis on the importance of collaboration for grant seeking nonprofits. As an organization you should be calling around and staying in touch with neighborhood boards and other nonprofits in your geographic area to find out how you can collaborate with them on new and unique projects. Sometimes these collaborations can even lead directly to an effective grant proposal.
It is critical to have members of a collaborative send signed letters of support with the grant proposal. These letters should confirm the scope of the work that each organization has committed to provide and ensure the grantor that the organization is engaged and ready to work when the grant is made.
Make sure to emphasize how your collaboration spreads costs and saves money for your organization and your partners. Collaborating with other nonprofits may also allow you to qualify for broader criteria with funders and get access to a funder who you wouldn’t otherwise qualify for without partnering with another organization that works with a different population.
Grant writing can be a complicated and confusing process for nonprofits to wade into. Following these steps before applying for a grant will improve your chances and make the process far smoother and simpler for you and your organization.