Thursday, April 18, 2013

Best Practices for Grantseeking

Ok, your checklist is all checked off. You’re ready to apply for grants!

A few best practices:

First, grants do not replace board/staff fundraising from individuals
When your board starts suggesting grants in lieu of their selling sponsorships, event tickets, it’s time to urge that board member to move on (a future post :)).

Grants aren’t the panacea to donor and board fatigue.

Grants are strategic opportunities to enhance already-strong fundraising programs. Grants can help you launch a program, but they are not annuity streams of revenue.

Second, do your research!
Definitely research Foundations (we like Our process usually takes a couple months – we start with broad criteria, such as Foundations that fund in California in the field of say education. 

We generate an initial list of around 200 prospects. We cull this down to about 40.

We research the Foundation’s profile on Foundation Center, its website, its 990 and sometimes its Guidestar profile. We also review the websites/annual reports of like-minded organizations to see if ABC Foundation is really funding direct services for mental health.

We create a 12-18 month calendar. We keep the other 160 Foundations sorted in various buckets – never eligible, possibly eligible or almost eligible.

For instance, if you’re more than 18 months away from an audit and there’s a perfect Foundation for your mission that will make absolutely no exceptions whatsoever about submitting an audit, that Foundation goes on our almost eligible list.

Every 6 months or so, we revisit these lists and update our calendar.

And, of course, most Foundations change their priority areas over time. Just because you’re not eligible now doesn’t mean you should ignore the Foundation forever.

Third, read the guidelines for each foundation
You may not qualify. If I had a nickel for every time I was asked “how come we aren’t applying to ABC Foundation – they fund education and we have an education component in our debate team programs,” I wouldn’t write these blogs :). That’s why we go from 200 Foundations to 40.

Seriously, read the guidelines. The Gates Foundation won’t fund your grassroots, after-school tutoring program.

Of course, it’s an outstanding program and yes, Bill should fund it, but the fact is, submitting your proposal won’t change his mind. 

High-level alignment between your and the Foundation’s missions doesn’t mean you’re eligible to apply.

Unfortunately, one client actually wanted us to apply to every foundation that supported education, whether or not the foundation funded in our geographic area or specific area of education. It was time to have a different conversation with the client. 

It’s great to be aggressive with applications – we do believe if you’re not getting turned down from time to time, you’re not applying to enough Foundations – but taking a direct mail approach of applying to 200 Foundations in 6 months and hoping 3 or 4 will come through is foolish. It’s a great way to burn your reputation with funders. 

Program officers travel in small circles and move around among various Foundations. They will remember the homeless shelter that applied for an education grant because shelter volunteers talk to clients in the food line. 
Foundations are more similar to major donors in the level of customization required.

Fourth, develop relationships with Foundation staff
Unless contact with a Foundation is strictly prohibited in the guidelines, professional fundraising staff (or ED) should contact the Foundation’s staff, in advance of submitting a proposal. 

Do your research in advance – write down your questions. 

Most Foundations will appreciate that you took the time to call and ask a question or two and develop a relationship. You don’t want to launch into your entire proposal, but give them your 30-second pitch.  And LISTEN.

Most program officers don’t have the ability to say yes to a proposal. But, they have the ability to say no. That’s powerful.

Do listen and take their advice if they tell you to change something.

Fifth, pilot your grant proposals
With our clients, we leave some running room in the early months. We know we’re still working on the exact pitch/phrasing – especially if this is the first time they’ve applied for grants. We like scaling up.

Don’t apply to 30 grants in one month. One client wanted us to do this; fortunately, they didn’t have enough postage that day

You’ll need to spread out your applications anyway; many Foundations have specific deadlines, which may include that they only accept grants between May 1 – June 15. Don’t bother applying October 12.

When you’re venturing into grants for the first time, you need to develop the relationships with Foundation staff and you’ll need to test out your pitch. Get feedback from Foundations.

If you are turned down, contact a Foundation and nicely, nicely, nicely ask for feedback. Thank for their consideration of your request. Let them know you’re new to Foundations and you want to learn.

Maybe it’s simply that the grant process was competitive this time and your proposal was strong. Great. Apply again.

Maybe your mission doesn’t dovetail as much as you thought; you give gift cards to select clients, but you’re not a food bank. Put this Foundation on the back burner.

The downside of not piloting, especially when you’re a new organization, is you could run out of Foundations to apply to. Say, we had applied to all 30 Foundations in the first month for our client. Our client would have had no one else to apply to for at least 6 months.

It’s also valuable to get feedback from Foundations that you can take to your board. One nonprofit I worked at - before going into consulting - didn’t believe me when we told them that 100% of the board needed to give and insisted I apply for grants. Only 75% of their board gave.

So, I applied to one foundation that immediately turned us down.

I called for feedback and was told they wanted to see 100% of the board giving. Surprise, Surprise.

But, I took that back to the board and said if we were serious about securing grants, we had to implement all the things on my original checklist.

This inspired the Board Chair to get the three board members reluctant to give, off the board.

Our subsequent proposals were funded.