Author: Lynn deLearie

Grant Reports Aren’t Always Required, But They’re (Almost) Always A Good Idea !!

Not sure about you, but the dog eating my homework excuse never worked for me. And not turning in a grant report to a funder who requires one is not going to work either.

At best, you’ll be given an extension for the report, and have a slightly tarnished reputation. At worst, you’ll lose that funder forever.

So, what about grantors that don’t require a report? Should you take the time to write and submit one? My answer is a qualified, “Yes.”

Reporting is an important part of stewardship, and a great way to show the donor that their gift has made an impact. In addition to several feel-good communications to the grantor during the year, a grant report submitted sometime during the year or with your next proposal is certainly best practice.

What should be included in your grant report? A good template would be a report required from another foundation that funds the same project or program. In lieu of that, I recommend including the following sections:

1  Briefly outline the goals of the project/program funded by XXX Foundation.

2  Who or what has been the primary beneficiary of this project/program? How many
    people have you served through this project/program?

3  What were the specific results of the project/program? Compare the actual results to the
    projected outcomes described in the original proposal.

4  Attach a detailed project budget and a specific breakdown of how the grant has been spent.

5  What difference did this grant make to your organization and for the population you are
    serving?

6  What are your plans for the future of this project/program, including funding, expansion,
    replication or termination?

Will preparation of this report require extra work on your part? Yes, but hopefully not too much, because an NPO’s established grant program will have defined goals, metrics and budgets for each project/program for which it is seeking grant funding.

These goals, metrics, and budgets will have been included in grant proposals, and the results of which will need to be communicated in grant reports.

One final point, circling back to my qualified “Yes” as to whether you should submit a report to grantors that don’t require a report. As I have said in previous postings, “relationships are at the heart of all fundraising activities, and grants are no exception.”

Communicating with your grantor is an essential part of continuing a healthy relationship that benefits the foundation or corporate grantor as well as your nonprofit.

So call, write, or e-mail your grantor if you don’t know what their reporting requirements are. They will appreciate your follow-up, and they will appreciate your providing them with the reports they want, in the format they prefer.

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Lynn deLearie Consulting, LLC, helps nonprofit organizations develop, enhance and expand grant programs, and helps them secure funding from foundations and corporations. Contact Lynn deLearie..

Too often we wind up letting the tail wag the dog. I know, I’ve been there.

Not long ago, I came across an RFP (Request for Proposal) that was outside the scope of what our organization was planning to do during the current fiscal year. I talked to our program staff, and they came up with a good idea that would fit the RFP … an idea, however, that was not in our operating budget.

So, with the enthusiasm of the staff, I wrote and submitted the proposal. And we won the grant.

Great news, right ?? Not exactly !!

Now we have to implement this new project that doesn’t underwrite any costs in our current operating budget. So, in reality, we will have to ask our already stretched program staff to implement this project in their “spare time”….

The better way to manage your grant program is to collaborate with your program staff during the budgeting process to agree on what your organization is planning for the next fiscal year.

Projects, programs, and overhead costs that end up in your operating budget can then be included in your grant-seeking calendar. Those that end up getting cut during budgeting can also be included, but at a lower priority.

This allows you, as the grant manager, to focus your efforts on funding your organization’s operating budget, instead of chasing after money for projects or programs that your organization may not need or can’t afford to implement.

There is, then, a simple question that should, with rare exception, define your decision-making process: Is the project or program in the current operating budget? If YES, pursue for grant funding; if NO, don’t….

This might come in handy when you have to explain to your program staff/executive director/board member why you didn’t pursue a “great grant opportunity” that they handed to you.

And, please keep in mind that this is best managed with some flexibility. Perhaps an RFP comes your way that is too good to pass up. As long as your NPO’s leadership and program staff give it the green light … and understand the consequences of implementing the new venture, then go for it.

Another green light for an off-budget project or program is one in which you can include a portion of your current operating budget – perhaps staff time to implement the new project/program.

Just remember, don’t let off-budget new-ideas control your grant-seeking process. Be the dog wagging the tail, not the other way around; you will better serve your organization with a more thoughtful approach.
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Lynn deLearie Consulting, LLC, helps nonprofit organizations develop, enhance and expand grant programs, and helps them secure funding from foundations and corporations. Contact Lynn deLearie..

When Does A Foundation Really Mean “No”?

Unfortunately, the answer is most of the time. Let’s go through a couple of scenarios from my recent real-world encounters to see how this can play out.

Scenario A: You’ve done your prospecting homework and have identified a foundation that’s a good fit with your organization. Unfortunately, you don’t have a connection between one of your board members and one of their trustees, but the foundation does accept unsolicited proposals.

So you go ahead and submit a well-written proposal, following all of their guidelines. Several months go by and you’re wondering when you will receive notification. Probably still too soon. So you wait until six months go by and still nothing. You call the contact number listed in the foundation’s 990 (or in the Foundation Directory) and leave a message, asking about the proposal that you submitted six months ago. They don’t call back. This is a, “No.”

If you’re absolutely, 100% sure that this foundation is a perfect fit for your organization, then go ahead and submit another proposal. If you get the same result this time, then cross them off your list!

Variation on Scenario A: You do get in touch with the foundation manager after submittal and they indicate that your proposal was not accepted. Although this news is disappointing, feedback from the foundation manager is valuable for your grant program.

Ask them if they can share any reasons why your proposal was denied: were there too many other submission this grant cycle and you just didn’t make the cut; did you leave something critical out of your submission; or, is your organization just not a good fit with their foundation? And, thank them for taking the time to discuss your proposal!

Scenario B: Again, you’ve done your homework. This time you’ve identified a foundation that doesn’t accept unsolicited proposals. So you submit a letter describing a little about your organization and asking about the possibility of applying for grant funding. You indicate that you will follow up by phone. You do, and you leave a message. They don’t call back.

A couple of weeks go by and you leave another message. They still don’t call back.

This is a, “No,” and until you can make a connection through a board member, staff member, involved donor or volunteer, then better to delete this foundation from your list.

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Lynn deLearie, owner of Lynn deLearie Consulting, LLC, helps nonprofit organizations develop, enhance and expand grant programs, and helps them secure funding from foundations and corporations. She can be contacted at lynn.delearie@gmail.com..

How You Mail Your Proposals Can Make a Big Difference

The United States Postal Service is reliable, usually, almost all the time… But what about when they do lose a letter, or more important, your grant proposal?

It can happen, and it just did for one of my clients. I was expecting grant notification about a month earlier so called the foundation manager. They said they had never received the proposal, and had already made all their grant awards for the year. I had mailed the proposal regular mail without delivery confirmation.

I thanked the foundation manager, and e-mailed the proposal for their records – I had included a lot of good program results along with the proposal and wanted them to have that information.

I also leaned a big lesson, and I will NEVER mail a grant proposal or report again by regular mail. So, what are the options? FedEx is discouraged by many foundations because it is expensive, unnecessary (you didn’t need to wait until the last minute to submit the proposal), and doesn’t show that you are a good steward of your donors’ investments. Express Mail Service through the post office is also frowned upon for the same reasons.

That leaves Priority Mail Service with delivery confirmation. And, if you’re like me and don’t like waiting in line at the post office, you don’t have to! You can print labels with postage from home, and mail from your very own mailbox. All you need to do is set up an account at USPS.com, pick up a stack of Priority Mail Flat Rate Envelopes from your post office (no waiting in line for that), and you’re ready to go.

You don’t even need a postal scale because virtually all of your mailings will be less than 13 oz. and can be delivered for $4.75 with delivery confirmation. The best part is that you’ll even save money by mailing from home – the post office charges $4.95 for the same service. I guess they don’t like the long lines either!

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Lynn deLearie, owner of Lynn deLearie Consulting, LLC, helps nonprofit organizations develop, enhance and expand grant programs, and helps them secure funding from foundations and corporations. She can be contacted at lynn.delearie@gmail.com..

What does every prospector need to “hit the mother lode?” A good map!! And prospecting for foundation funding is no different.

Here’s the good news: with a couple of key tools, you can create your own map to lead you to some very good sources of funding.

The two that top my list are annual reports of your competitors and foundation 990s. Note that the IRS Form 990s is a document that public charities and foundations use to report financial and operational information to the federal government.

“The Foundation Directory,” published by the Foundation Center, can be quite useful, and is often a good place to start … but isn’t absolutely necessary if you are on a tight budget. It’s also available on-line, at FCOnline

The first step in this iterative process is to look at the annual reports of other organizations that provide the same or similar services as your organization, and identify the foundations listed as their funders.

Foundations that fund these organizations are good prospects for you. If you can’t find the annual report on your competitor’s website, give them a call and ask for a copy. If this seems unfair, don’t worry. It’s not. It’s just best practice. And, if your competitor organizations have good grant managers, they’ve probably already studied yours.

After identifying the foundations, download their IRS Form 990s from Guidestar, and start mining them for all the useful nuggets of information they contain. In particular:
• total net assets or fund balances at end of year – this will help you determine
  if they are large enough to invest time in pursuing for funding
• total annual giving – ditto on usefulness of this information
• whether they accept unsolicited proposals or only contribute to preselected
  organizations
• contact name, address and phone number for grant submissions
• grant application information – submission date, application format, required
  attachments (note that this information is not always included in 990s)
• trustee names and addresses – that could be quite useful during grant
  cultivation
• list of grantees and addresses for the year
• grant amounts and grant purposes (project support, general operating,
  capital campaign, etc.)

You can loop back around, and look at the annual reports of organizations listed in the 990s, but don’t spend too much time down this mine shaft. Prospects that look good on paper still require cultivation, proposal development and submission, and stewardship before they will yield up their riches.

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Lynn deLearie, owner of Lynn deLearie Consulting, LLC, helps nonprofit organizations develop, enhance and expand grant programs, and helps them secure funding from foundations and corporations. She can be contacted at lynn.delearie@gmail.com..

Not Exactly…
There are a variety of grants available, but they’re not all the same. Sure, the basic proposal stuff will be the same: organization information, mission, history, and general agency overview, but the guts of these proposals may differ significantly.

Program/Project Support Grants

• The most common type of foundation grant, and funded by most foundations
• Grants to support specific projects or programs
• Require detailed program description, including: program need, target
  audience, and program goals and objectives
• Require program evaluation section that specifically relates back to program
  goals and objectives
• Require program budget including revenue and expenses in addition to annual
  operating budget
• Often require a detailed listing of program activities and timeline
• May also require personnel section with qualifications of program staff

General/Operating Support Grants

• Grants to support operating costs of an organization, also called unrestricted
  grants or general-purpose grants
• Desirable, as they help “keep the lights on,” but not available from all
  foundations
• In place of specific program information, usually require section on programs
  and general activities of the organization
• Require section that addresses the need to be satisfied and the population
  to be served
• Evaluation section is often less specific than for program/project support
• Require annual operating budget

Capacity Building Grants

• May seem very desirable – after all, what nonprofit doesn’t want to build
   capacity – but, and this is a big but, they have a very specific goal, and
   they are not funded by many foundations
• Goal is to assist nonprofits in securing the professional assistance they need
   to address organizational development and effectiveness and enhance
   organizational capacity
• Include support for short-term initiatives, including: strategic planning,
   organizational assessment, board development, financial management,
   information technology assessment/planning, among others
• Most exclude hiring staff from list of allowed activities
• Require capacity building plan, list of activities, timeline and evaluation
   methodology

Capital/Building Grants

• Grants to support capital campaigns for building construction or acquisition
• Not funded by many foundations
• Usually require extensive financial data to show that completion of the project
   is financially feasible

Matching/Challenge Grants

• Help nonprofits increase their fundraising effectiveness by matching other
   donors’ contributions
• Not funded by many foundations
• Grant money is most often released after the challenge has been met;
   i.e., $100,000 in contributions has been raised as 1:1 match for the grant

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Lynn deLearie, owner of Lynn deLearie Consulting, LLC, helps nonprofit organizations develop, enhance and expand grant programs, and helps them secure funding from foundations and corporations. She can be contacted at lynn.delearie@gmail.com..

If you’ve started down the yellow brick road to foundation funding, then get set to meet some different characters (foundations) along the way – specifically: Private, Corporate, Family, and Community Foundations.

Much of the information below comes from the wizards at the MIT Office of Foundation relations; I’ve added the bulleted items in italics. You can download the MIT summary at MIT Resources

Private Foundation
• Nongovernmental, non-profit, self-governed organization
• Funds (usually from a single source, such as one individual, family, or corporation) and programs managed by its own trustees or directors
• Often is a large, complex, professionally managed organization
• Must “pay out” approximately 5% of the market value of its assets each year
• Must pay a yearly 1-2% excise tax on its net investment income
• Usually have formal grant application and reporting procedures

Corporate Foundation
• Assets are derived primarily from contributions of a for-profit business
• Funding comes from an initial endowment and/or periodic contributions
• May maintain ties to the parent company but is an independent entity
• Abides by same rules and regulations governing private foundations
• Often have formal grant application and reporting procedures

Family Foundation
• Technically, not a legal term; refers to any independent private foundation whose funds are managed or strongly influenced by members of the donor’s family
• Family members often serve as officers or board members
• Family members often have a significant role in grantmaking decisions
• Comprise ~40-45% of all private and community foundations
• Most are small, informal organizations
• Usually do NOT have formal grant application and reporting procedures

Community Foundation
• Serves a specific geographic community or region (e.g., The Boston Foundation)
• Usually focuses mainly, if not exclusively, on local needs
• Usually a “public charity” (raises a significant portion of its funds from the public each year), not a “private foundation”
• Funds usually derived from many donors but managed in a single endowment
• Income from the endowment is used to make grants
• Make grants from donor-advised funds that reflect the donors’ interests
• May make grants from discretionary funds to support key regional initiatives

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Lynn deLearie, owner of Lynn deLearie Consulting, LLC, helps nonprofit organizations develop, enhance and expand grant programs, and helps them secure funding from foundations and corporations. She can be contacted at lynn.delearie@gmail.com..

It’s Not About Me; It’s About You, Really !!
Relationships are at the heart of all fundraising activities, and grants are no exception. Just like dating, the nonprofit grantee needs to find a compatible match in a prospective grantor.

But, unlike a good date, the grantee/grantor relationship is very one-sided. It REALLY is all about the grantor.

Given the proliferation of U.S. public charities – just over one million in 2010, according to the National Center for Charitable Statistics – coupled with the current economic climate, foundations are the much-courted belle-of-the-ball. And, like public charities, foundations have also been pinched by the economic downturn.

As per IRS regulations, private foundations are required to distribute about 5% of their assets annually for charitable purposes. So, when the market is down, their assets generate less income, so they give less.

According to the Foundation Center, grantmaking by private, community, and operating foundations fell by almost 9% in 2009 – figures aren’t out yet for last year.

In addition to financial constraints, foundations are also limited to the charitable purpose(s) established by their donors and managed by their trustees. Unlike individual donors, foundations usually have a well-documented purpose that they are trying to fulfill by making grants.

They are looking for nonprofit organizations that can help them make the changes/improvements in the world that are their raison-d’etre, and deliver the services and outcomes that matter to them.

What should you look for when courting prospective foundations?

Most importantly, look for a foundation with a “purpose” that has significant overlap with your organization’s mission.

If, for example, your mission is to rehabilitate wildlife, then you should be looking at foundations that identify animal welfare as a priority. Conversely, if you are a charter elementary school, then a foundation that funds higher education is not a good fit.

So, when your intended foundation partner breaks-up with you after the first date (or rejects your first proposal), try not to feel hurt. Just do a better job prospecting for your next match … it might be the one made-in-heaven.

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Lynn deLearie Consulting, LLC, helps nonprofit organizations develop, enhance and expand grant programs, and helps them secure funding from foundations and corporations. She can be contacted at lynn.delearie@gmail.com..

Show Me the Money & Keep It Coming
For today’s look at grantsmanship, I am outlining a four-step process for successful nonprofit grantsmanship. And, because many people – not me, but many other people – find grantsmanship a bit dull, there are plain-language subtitles to lighten it up a bit.

Grant Prospecting

Figuring out who has the money: “Prospecting” is the process of looking for likely grantors to fund your organization. I’ll go into more detail in next month’s post about what makes a good prospect, but the most important factor to look for is significant overlap between the foundation’s purpose and your organization’s mission. In later posts I’ll also describe more about prospecting and some good tools to use.

Grant Cultivation

Getting in good with those who have the money: Cultivation is an extremely important step, just as important as identifying good prospects. Building a relationship with foundation trustees and/or managers takes time, but is a valuable investment to position your grant applications for success.

From my own experience, I can verify that working with potential grantors before submitting an application will result in a much higher acceptance rate. It can also save you time, because meeting with a “hot” grant prospect may yield information about their foundation’s purpose that suggests they are not such a good fit with your organization. Better to find out early before spending time to develop the proposal.

Grant Development

Telling those who have the money what they want to hear: this step could also be entitled, “Proposal Development,” and includes writing and submitting grant proposals (including budgets), and sometimes planning projects if they haven’t been implemented yet at your organization.

Grant writing is creative, but it’s not freeform fiction. Following the grantor’s guidelines and telling them what they want to hear is very important. And, grantors certainly don’t want your budgets to be works of fiction.

Grant Management

Telling those who gave you the money that you spent it well: I often find this step to be the most rewarding because I can report to the grantor that we did meet the goals and objectives described in the proposal they funded.

This step, and the Grant Development step before it, also requires working closely with your organization’s program staff to establish goals and objectives, and monitor and report on outcomes.

When these four steps are done well – with each step considered and implemented – you can be sure that your grants program will be productive and cost-effective.

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Lynn deLearie Consulting, LLC, helps nonprofit organizations develop, enhance and expand grant programs, and helps them secure funding from foundations and corporations. She can be contacted at lynn.delearie@gmail.com.

Although Merriam-Webster defines grantsmanship simply as “the art of obtaining grants,” the reality is so much more than that. A broader, more realistic (somewhat dramatic) definition of that term would be, “The cradle to grave process for ‘birthing,’ ‘raising’ and managing grants.”

Regularly, on this blog, I will share my experiences, real world examples, and other resources to help you develop or expand a grants program for your nonprofit.

So, as promised, in this, my first post focusing on grantsmanship, let’s look at some real world examples…

The Good: According to a 2010 WealthEngine white paper, “Measuring Fundraising Return On Investment and the Impact of Prospect Research,” the average cost-per-dollar-raised for grants is 20 cents … an ROI of 500%. For each dollar raised for direct mail donor acquisition the cost is over a dollar, and it’s often fifty-cents-per-dollar-raised for special events. Clearly, grant seeking can result in a good return on investment … when managed well.

The Bad: If your financial statements and program budgets are not in order, then you’re not ready to start a grants program. Many grantors will scrutinize your financials with a magnifying glass, and if your books are not in total order, don’t expect to be awarded a grant.

Take the case of New Jersey’s application for a U.S. Department of Education “Race to the Top” grant. According to an August 31, 2010 article in The Trentonian, New Jersey “lost crucial points in reporting budget figures for the wrong years in one section of its application.”

The article stated that New Jersey “was a top runner-up in the competition, missing by only a few points.” This financial gaffe cost New Jersey a $400 million federal education grant, and it cost New Jersey’s education commissioner, Bret Schundler, his job.

The Ugly: Grants are NOT a no-strings-attached gift – they are a contract between the grantor, who provides the funds, and the grantee, who performs the tasks and delivers the outcomes described in the proposal. OK, maybe this isn’t The Ugly. It’s just reality. But, if the grantee fails to deliver, it can get ugly, really ugly.

Take the case of the Center for Civic Education (CCE). CCE received grants during FY08 from the U.S. Department of Education to facilitate civic education. The DOE conducted an audit to determine whether CCE administered the grants in compliance with applicable laws, regulations and grant award provisions.

The audit findings were really Ugly, ranging from, “Not meeting the standards for administering federal education grants,” to, “Charging costs that were not reasonable, necessary, or allocable to the programs.” Needless to say, the DOE was not happy, and “recommended” that CCE return over $925,000 that they’d spent in FY08, and that CCE be designated a “high-risk grantee” … subject to special grant conditions.

By the way, the audit and CCE’s response offer some very interesting reading:
The Audit    CCE Response
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Lynn deLearie Consulting, LLC, helps nonprofit organizations develop, enhance and expand grant programs, and helps them secure funding from foundations and corporations. Lynn can be contacted at lynn.delearie@gmail.com..