Are You Prepared For Grants?
Congratulations! You have received your 501c3 tax exempt status from the IRS and are now looking to secure funding for your organization. Most organizations will begin to look at grant funding opportunities as the primary source of income for their activities. However, many boards of directors are unfamiliar with the grants application process and are not prepared for the lengthy process.
Consider The Following:
In this day in age when grant funding is extremely competitive, it is vital for organizations to take the steps required to prepare for success. Please take into consideration the following items prior to submitting any grants applications. The majority of the items listed below are required by ninety nine percent of funders and they will recognize if you prepare them last minute and without preparation. If you are not prepared, the chances of receiving grant funding may decrease significantly.
Establish A Board Of Directors
Your organization will need to establish a governing body or board of directors made up of professional individuals that are active within their community. Grant funders will often request biographies of each director to be submitted with the application. Directors are elected for the oversight and management of the organization, potential funders are looking to see that the directors are passionate about the organization’s mission, are contributing to the organization with their time and treasurers, and that they have ties to the community.
The biographies will demonstrate to the funders that any donations will be handled correctly and exclusively for the furthering of the organization’s mission. Make sure that all directors are aware of the responsibilities and expectations that will come with their position prior to listing them on grants documentation.Go to top
A Balanced Budget
While we are talking about managing financials properly, each grant funder will also request a copy of your past 990 filing and a board approved budget. The budget will show the funder what exactly the donations will be used for. Most funders will request an overall budget for the organization’s activities, as well as a budget for the specific program that you are seeking funding for. This will allow them to determine how much time you are dedicating day to day to the program you are requesting support for and how much of your fiscal resources will be dedicated to it.
Within the budget, you will want to detail all anticipated income sources and how every dollar will be spent. If some of the funds will be saved for future expenses (ex. purchasing a facility) or saved for incidental expenses, it is important to note that in the budget.Go to top
Have The Budget Approved
It is also extremely important to have the board review and approve the budget because if your organization is to receive funding, you will be required to spend the money as detailed in your submitted budget. The members of the board will need to do some research for potential expenses prior to creating the budget. If you are going to purchase a facility, look into positional real estate opportunities so you can accurately report the cost in your budget. If you need to purchase computers and printers for the organization, plan ahead for how many you will need and the projected cost. Taking the time to do some research prior to grants submission will set your organization up for future success.Go to top
Most organizations will be interested in how you spent the organization’s money in previous years. Because of the need for financial transparency, your organization must submit a copy of its previous 990s (the annual report required by the IRS). There are various versions of the 990 annual reports that may be used and some organizations will use the streamlined version called the 990n. Because the 990n does not provide a break down description of how the organization spent its money during the previous year, most grant funders will require applicants to submit at minimum a 990ez.
If you have not yet submitted an IRS form 990 for your organization, you will want to prepare an audited financial statement. In addition, you will need to submit a copy of your tax exemption determination letter from the IRS. This will let the funder know that you have obtained your 501c3 status as a tax exempt organization and that all donations to your organization will be tax deductible.Go to top
Create An Action Plan
Within the grant proposal, the funders will be interested in reading about how your organization will evaluate your activities. It is important for your organization to create an action plan that will include regular scheduled meetings among board of executive directors and staff members. These meetings will provide a discussion time for evaluating if the organization is meeting its goals and action steps. Your proposal will need to detail how often these meetings will take place, what type of information will be reviewed during this time, and how the organization will address whether its meeting its targeted goals. If it is not meeting its goals, what steps will immediately take place to get back on track?
Evaluate Your Impact Within The Community
The evaluation section of the proposal will also detail how you will measure your impact within the community. For example, if the organization is providing afterschool tutoring and wants to buy its own facility in the next year, the proposal will need to detail how the organization will monitor its fundraising efforts to see if they are on track to purchase a facility. The organization will also need to detail how they measure the improvement of the attendee’s scholastic reports. Will the organization monitor the child’s grades? Will they do pre and post testing to see if the child is retaining the information? Will they provide surveys to the student and their parents to assess their satisfaction with the program and staff members? These are the types of evaluation methods that potential funders will be looking to be addressed in the proposal.
They want to believe that the funding that they provide will go to an organization that is constantly monitoring its activities and operating in the most efficient manner possible to meet its objectives. Therefore, it is very important that your board of directors develop an action plan before it even begins writing its proposal. The more specific your evaluation plan, the better chance at success you will have!Go to top
Sources Of Funding
Another vital aspect of the proposal will include the sustainability section of the proposal. This is the section that will detail how the organization will secure additional sources of funding outside of grant supports. Potential funders want to support organizations that they believe will still be operational a year from now even if they did not donate to the organization. It is imperative that the organization develops a fundraising plan with consistent revenue streams. This is often the most difficult and time consuming portion of planning for grants submissions.
Potential income sources may include corporate sponsorships, merchandise sales, community events, ect. Again, it is important to be as specific as possible when detailing your income sources. It is often not realistic for organizations to be fully dependent upon grant funding as their sources of income. Therefore, a significant portion of your grants preparation may include establishing a fundraising team and holding a few events prior to applying for grants.
If your organization is able to list specific fundraising events that you have successfully held or list notable donors, it will demonstrate to the funder that you are taking the necessary steps required to becoming self-sufficient. They will then believe that you have the leadership required to remain operational in the years to come and that their donation will make a positive impact within the community.Go to top
When preparing grants applications, you must prepare vital documents and include them in the appendix section of the grant proposal. This may include letters of recommendations from community leaders, awards the organization has received for its activities, and testimonials from past clients. Representatives of the organization will need to spend a period of time reaching out to past clients and partners in order to receive these written items. Your organization will want to provide these individuals will ample time to write and proofread these recommendations and testimonials. These items are of importance because it will demonstrate to the grant funder that you have made positive impact within the community with the limited resources that you have had to operate with.Go to top
In addition to testimonials, it is important to highlight past accomplishments of the organization within the introduction sections of the proposal. Representatives of the organization will want to go back through documentation to get specific numbers and statistics derived from your activities. If your organization operates a soup kitchen, you will need to report how many individuals you have served in your programs. If you run an animal shelter, you will want to discuss how many pets your have placed into forever homes. If you have any statistics that will demonstrate how your organization has impacted your community, this will help paint your organization in a positive light.
You will also want to include past accomplishments even if your organization is not fully operational. For example, if your organization wants to operate a homeless shelter but you haven’t opened a facility yet, you will want to discuss any past activities. Maybe you have passed out blankets or sandwiches to homeless individuals on the streets. These would be vital accomplishments to highlight and for the funder to be aware of. You will want to keep track of all programs, no matter how small, and the number of individuals you were able to serve for the introduction section.
Please keep in mind all the above items when preparing your grants application and good luck with your fundraising endeavors!