I guest blogged yesterday on Forbes.com about business plan mistakes that I see often as a judge for the social venture track of NYU’s business plan competition. While the post addressed mistakes made by for-profit ventures and nonprofit social ventures, a lot of the mistakes that I see – and lessons learned – apply equally to nonprofits writing grant proposals to fund new programs.
Mistake #1: Developing a solution that’s in search of a problem. Fundraising consultant Pamela Grow referred to this problem in an email yesterday as “If you build it, they will come.” In fact, they won’t. Too many nonprofits (like for-profit social ventures) come up with a great idea that should be of great value to their constituents. Smart people get together in conference rooms and come up with great ideas. They see problems their constituents are experiencing, and come up with solutions – all without getting input from said constituents. In for-profits, this generally results in creating a product or service without a clear market. In nonprofits, this can result in either creating a product or service without a clear group of people who will use it – or in creating a product or service without a clear source of funding. Either result has problems, and both can be avoided by getting input for the relevant constituents along the way. If you develop the service, will the people in your service area use it? What will compel them to do so? What might get in the way, and how can you overcome it? Will they be willing and able to pay for it? If not (which is frequently the case), how will you cover those costs? Launching the program without knowing that you’ll be able to get sufficient support to make is sustainable, often manifest in saying, “Oh, we’ll just get a grant to cover those costs,” can be more harmful than beneficial to your constituents if you are then unable to secure funding.
Mistake #2: Claiming you have no competition. Many grant proposals ask grant applicants to discuss their competition. It may well be that there isn’t another organization in your service area doing exactly what your organization is proposing, but that doesn’t mean that you do not have any competition. There’s direct competition, indirect competition, and there’s the status quo. Think about your constituents. What are they doing now? Are there other organizations providing a similar service that is meeting the same – or a similar – need? Even if there aren’t similar services being offered in your service area, your constituents are spending time and sometimes money on other things that will have to be displaced by your service. You need to know – and be able to describe – what those things are, as well as any other services that compete more directly with what you’re proposing.
Mistake #3: Grant applicants must clearly articulate their theory of change. Different organizations have different ways of framing theories of change and the social impact that is expected to result from the program or service being developed. Whatever it’s presenting a theory of change, articulating SMART objectives, building logic models, or something else, it’s critical to be able to articulate the impact your organization is trying to achieve, how you plan to achieve it, and how you plan to measure the results of your activities. In grant proposals, look for any specific requirements articulated by the foundation to which you’re applying; many foundations have specific formats in which they prefer to see goals, outcomes, and theories of change addressed.
What are some common mistakes you have seen – or made – in grant applications? Feel free to share in the comments below.
Image credit: adapted from http://www.flickr.com/photos/opensourceway/5496629643/