What Grantseekers Can Learn from the Government Shutdown

closed for business

The government shutdown is hardly news at this point, and has directly impacted at least 800,000 government workers who have been furloughed.  It has also impacted a lot of businesses frequented by those workers.

While the full economic impact of the shutdown is still unknown, some nonprofits are directly feeling the effects.  Federal agencies, including NIH and NSF, have suspended their grantmaking programs for the duration of the shutdown.  While some nonprofits had already received grant allocations for the year from those agencies before October 1, some hadn't, and it's unclear what the impact of delayed funding cycles will be going forward, even once the government has reopened for business.

So what can grantseekers learn from the government shutdown?

  • Diversify your funding sources.  As we've written about before, relying too heavily on a given funding source (whether a single funder, or a single type of funder) can be risky for nonprofits.  If your organization has historically relied heavily on government grants, start building relationships with private foundations and corporate giving programs.  Connect with the community foundation in your area.  Think about adding individual donors and fees for service (if your organization provides services for which you can charge) to your sources of funding.  Your organization may not be directly impacted by the shutdown (and I hope it isn't), but it's never a wrong time to think about diversifying your funding sources.
  • Have a plan B. While your organization will hopefully never be in a position where a major funding source disappears overnight, it's always good to have a plan B.  When crafting your grantseeking strategy for the year, chart out how much money your organization needs from grants (versus other funding sources) to support your programs, which past funders you expect to support your organization again, which new funders you plan to approach, and the expected grant amounts from each.  Then think through what will happen if some of the grants you think are sure things don't come through.  Sometimes foundation priorities change, economic conditions shift and diminish foundation assets, or something happens like a government shutdown.  Knowing where you'll be able to make up any shortfall is critical.  And raising more money than oyou need is also a good thing.  You can always put additional money raised into a reserve fund (though be careful if any of the grants awarded are restricted) or offer more programs and services with the additional funds.
  • Store your grant information online.  What would happen if you were unable to access your organization's office for several days - or several weeks?  Would you miss a grant proposal deadline?  Or a grant report deadline?  How would that impact your grantseeking for the year?  How would it impact your relationship with your funders?  By storing all of your grant-related information online, in a system like PhilanTrack, you can access your grant information and write your proposals and reports anywhere, at any time, to ensure that you're able to keep your grantseeking going, even if there are unexpected events that prevent you from accessing physical files in your organization's office.

To learn about how the PhilanTrack online grants management system can help your organization's grantseeking efforts, request a demonstration, or register for a webinar.

 

 

Photo credit: adapted from http://www.flickr.com/photos/bcostin/3449288718/
Author: Dahna Goldstein
October 07, 2013, 10:30 AM

Don’t Put All Your Eggs in One Basket – Grantwriting Tips

Grantwriting eggs in one basket

The upcoming Easter holiday has gotten me thinking about eggs and baskets, and how combining the two – specifically putting all eggs in one basket – can be dangerous, for both grantseekers and grantmakers. 

I suppose I should be writing about Passover symbols, but unleavened bread only makes me think about predictions that grantmaking will be pretty flat this year.  But I digress.

For nonprofits, putting all grantwriting eggs in one basket – and more broadly, putting all fundraising eggs in one basket – can be a serious problem.  A future post will be about grantmakers, and why they should not put all of their eggs in one basket, either.

The notion of eggs and baskets brings to mind an image of an investment portfolio.  Those of us who have been taught about investing (either formally or informally) have been taught to diversify our portfolios, or not to put all of our investment eggs in one basket.  A diversified portfolio mitigates risk by combining different asset classes with different levels of risk and reward.

Simply put, imagine you put all of your money into one stock, the ABC Corporation.  If that stock price goes through the roof overnight, you could become a millionaire.  But if that stock completely tanks, you could lose all of your money instantly.  While a diversified portfolio (combining stocks and other assets like bonds, all with different levels of stability and predictability, and with different potential returns) means you are quite unlikely to become a millionaire overnight, it also means that you’re less likely to go broke overnight.  So a diversified portfolio is a cautious, smart investment strategy for long term stability and returns.

The same is true for fundraising.  Let’s say your organization needs to raise $200,000 from outside sources to support its programs for the year.  You have limited resources, so you need to decide where to invest your fundraising efforts and fundraising dollars.  While many nonprofits don’t think about fundraising this way, any staff time dedicated to fundraising has a cost – both the actual cost of salaries for the amount of time spent fundraising, and an opportunity cost in terms of other activities that cannot be pursued by fundraising staff.  Say there is an online fundraising contest with a top prize of $200,000.  All you need to do is have the most votes at the end of the contest.  If you win, your fundraising for the year is complete, and you’ll be able to deliver all of your programs and services.  All you need to do is win the contest.

If you invest all of your organization’s fundraising resources in that contest and win, that’s great!  It’s like becoming a millionaire overnight.  But how likely are you to win that contest?  And what if you don’t win?  It’s like putting all of your money on that stock that tanks.

Grantwriting is similar.  Some foundations and governments award large grants.  If you write one winning grant proposal for a $200,000 grant, then your organization is set for the year.  But what if you invest a lot of time and resources, and don’t get the grant?  What if, to have enough time to dedicate to writing the perfect proposal for a $200,000 grant, you let opportunities to apply for other, smaller grants pass you by?

Just as the economy impacts individual investing, and decisions investors make, it also impacts the nonprofit sector, and the funds available for nonprofits seeking support.  As many nonprofits are painfully aware, government funding has decreased over the past several years while demand for services has remained steady and has increased in many cases.  For organizations that were overly reliant on government funding, cuts in government support have been disproportionately painful – many organizations have had to cut programs or staff, and some have even been shuttered.

A wise approach to fundraising suggests a diversified portfolio:

  • Overall, grants should comprise one component of your organization’s fundraising, but not at the expense of individual fundraising, fees for service, events, or other fundraising activities that are appropriate for your specific organization and issue area. 
  • Your grantseeking portfolio should be diversified as well:
    • Pursue a combination of smaller and larger grants, ensuring that the total possible value of the grants far exceeds your needs.  If you write $200,000 worth of proposals, and only half of the proposals are funded, you won’t meet your fundraising needs
    • Pursue a combination of government and foundation grants.  If a government grant disappears, diversified nonprofits will still have support from foundations.  It’s not a panacea, but it is better to have some funding (and money in the bank) than none
    • Pursue a combination of levels of government grants, from small local agencies, to state and Federal grants.  Not all levels of government grants will be right for all organizations, so be sure to craft a diversified plan that is right for your organization
    • Pursue a combination of foundation types.  Different types of foundations have different mandates, and their giving patterns can differ when economic conditions or giving priorities change.  Get to know the community foundation in your area, as well as the family foundations and corporate foundations and giving programs that support organizations in your geographic area and issue areas.

A diversified grantwriting portfolio is a wise fundraising strategy. 

What are your tips for creating a diversified fundraising or grantwriting portfolio?  Share them in the comments below.

Photo credit: http://www.flickr.com/photos/bobydimitrov/3461353547/
Author: Dahna Goldstein
March 28, 2013, 10:11 AM

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