My philosophy in everything I do with Founders is I look at everything through donor and funder perspectives. So everything I design has the nonprofit in mind but approaches the task from donor and funder perspectives. Today I’m discussing the details of being grant ready through the eyes of a funder.

Funders Want to Know You Are a Good Investment

Looking at grants from a Foundation standpoint, they want to know you are a good investment. They see you as an investment. Grants should be part of a fundraising plan. When grants are part of a fundraising plan, you are showing funders that you’ve thought this through and you are going to be a good steward of their money.

Founders want to know that they made the right investment. Funders have some accountability terms that they require. Reporting, deadlines, and sometimes things organizations call strings come attached to the grant money because they want to make sure that they have made the right investment. So by following up with you and making you accountable, they can prove to their stakeholders you are a good investment. Foundations have donors, a board of directors, and others they answer to. Foundations are also accountable to the IRS. They have a lot of people that they have to prove they have made a good investment when they gave you that grant. 

What Makes You a Good Investment?
You Have Your Organizational Resources Ready

You have your 501(c)3. The reason Foundations like to give to 501(c)3s is that, by IRS regulation, a Foundation has to give for charitable purposes. A 501(c)3 nonprofit is the easiest way they can prove they complied with that regulation. Think about it. The IRS has said that you are, are a charitable organization when they approved your tax-exempt status. 

Your mission statement aligns with the mission of the Foundation

What does this mean? I see this backward all the time. New nonprofits new at grant writing will go out and they will say, okay, what is the foundation’s mission? Can we make our mission fit their mission? They go out and they start looking. They aren’t looking for a Foundation with a mission that is aligned to them.

Don’t go trying to make your mission fit theirs. That’s a recipe for disaster. Make sure that you are finding foundations whose mission aligns very easily with yours. If you have to try and make it fit like having a puzzle piece and having to hit with a hammer, then it’s not a good fit. It needs to fit pretty easily. 

Your mission statement needs to be unique. If your mission statement is like five other mission statements of organizations in your area, it’s not unique. It’s not going to be something that a funder probably will fund, because if there’s an organization that’s older than you with the same or similar mission, they’ll probably get funded.

If there’s an organization that they have funded before and they have the same mission, they’ll probably get funded over you. Simply because they know that that organization is going to do what they’re supposed to do. Make sure your mission statement is unique. Make sure it’s clear, no jargon, and no one-sentence paragraph.

Your mission statement needs to be concise and very clear. I need to know what you are doing, how are you making an impact in the community, and it needs to be doable. Save the planet or saving the planet is not doable. It’s a great slogan, but if you don’t tell me how you’re going to do it, it’s not. I have no idea if you have saved the planet or not.

Your board of directors needs to be invested.

I say this often Foundations don’t want to be the only ones invested. And if your board of directors isn’t invested, then why should anyone else? Boards provide the leadership of the organization. They focus and steer the organization, make decisions with the mission in mind, and make sure the organization is operating legally.

Operating legally is a fiduciary responsibility or duty of the board. Your board should also be active and meet regularly. Maybe your bylaws don’t say monthly, maybe they say every other month or every quarter or there’s some other kind of schedule. That’s okay. You just need to make sure that you are meeting regularly and you have those meeting minutes. 

100% Board Participation Makes You a Good Investment.

If your board of directors has a hundred percent participation, then you are a good investment. Now, the good news is for a lot of grants, you get to define what participation means. Maybe it’s they come to board meetings. They give a certain amount. And whatever else she wants to put into that participation number, [00:19:30] but you’re looking for a hundred percent participation. 

Board members need to invest time and money. They need to be invested with both their time and their money. If they’re not investing, how can they ask anyone else to?

Foundations will look at this and they’ll think the same thing. If your board members aren’t passionate enough about your organization, why should we be next? 

One of the characteristics of boards is they have committees. Foundations will look for committees unless you have a very tiny board. These committees can be on your Board or an outside Advisory Committee. Committees are another measure of Board or community involvement.

Boards should be diverse in experience and in ethnicity. 

That means they need to have different areas of expertise and these should all be areas that your nonprofit needs. Then. you need different viewpoints and different experiences on your Board. That’s why we look for diverse ethnicity, simply because we need to have some different perspectives and your Board should have a demographic representation of your target population. If your target population is Hispanic people, then you need Hispanic people on your Board. It is very simple because those Board members have a very unique perspective of where your target population is coming from. And that is completely invaluable when you go to look at programs and marketing and the needs of those of that population. 

You have different ways that the community is supporting and engaging in your nonprofit. Volunteers are one way to show community support. If you have many volunteers, then you become a good investment. You have the backing of the community and you are a good investment. 

You need a strategic plan. 

This needs to be a five-year plan to start, and you must execute and evaluate your plan. Strategic plans are a topic for another post.

That brings us to the tactical plan. 

The tactical plan is how you execute and evaluate your strategic plan. Your tactical plan is just for one year. It’s a one-year snapshot of your strategic plan. You’re going to go through your strategic plan and say, okay, what have we accomplished? What haven’t we accomplished? What do we need to accomplish this year? The reason why from a funder’s perspective that you need a strategic and a tactical plan is because it’s proof you are working towards your goals. The strategic plan is proof. You have goals, right? You have a vision for five years down the road and your tactical plan is proof that you are working towards those five-year goals.

Moving forward, you want to begin establishing a history of success and document, achievements, and accomplishments to keep a track record of successes. Also, you might want to start thinking about letters of support from community leaders and organizations. As you work with community leaders and with other organizations, then you might ask them to write a letter of support for your organization. These can be used as proof that you have community support. 

Operational resources that you need to get together. 
You Need an EIN and Operational Systems. 

So obviously you need your EIN, your employee identification. It is not only requested by funders but also a step in getting your nonprofit set up. You need operational systems reporting requirements to local state and federal agencies. You need to know what they are and what you need to be reporting. You also need to be meeting reporting deadlines. Systems for effective operations will help here.


Do you have partnerships? Will your organization be partnering with another agency or organization? You will want those agreements in writing.

You Have Your Financial Resources Together. 
You Have an Operating Budget.

An operating budget is your annual budget that is approved by the Board. Some of the things that you’re going to put in this budget are your rent, your salaries (if you have paid employees or want paid employees in the next 12 months), your program operations, your website, and your insurance. You will need budget income. This comes from your fundraising plan. I’m sure you’ve heard the saying before you have to spend money to make money. And that’s true with fundraising. There are some upfront costs that you’re going to have for certain fundraising activities. You’ve got to have that money budgeted. 

You Have a Fundraising Plan.

Foundations like to know they aren’t the only source of income. Your fundraising plan helps them understand that you have a strategy to get funding, individual donors, corporations involved, and you have a strategy to get other grant funders involved. That’s what your fundraising plan is all about. So your goal here is to show a donor program and community engagement.

The Board of Directors Plays a Key Role in Fundraising. 

I know we’ve talked about how important they are to the organizational side. They are key in fundraising. Let’s talk about specifics.

Boards should take the lead in fundraising activities. I know they don’t want to, but they must. This is one of those times when they must lead by example. We’ll discuss this in more depth later.

Boards should connect the organization to funding sources in the community. 

Board members need to use their contacts in the community and with other donors to help you further fundraising and spending efforts. This is a scenario I see often. There’s a member of your board that regularly plays golf with another board member on a local Foundation. They do this every Saturday. Your board member should be comfortable enough to be talking to his friend who is on the Foundation’s Board to see how you can get that funding. If you can have someone on the other Board who is in support of your organization, things get funded a whole lot easier. 

Stable Finances Makes You a Good Investment.

You are a good investment if you have stable finances, which means you have multiple income streams, you are in the black, and you meet local state, and federal requirements.

Programs Need to Be Ready

You need to provide a specific purpose for funds and that’s what a program does. It helps you to know the specific purpose for funds your program will establish. It’s going to have measurable results and you are going to keep track of those measurable results. Your board will approve your program budget. By getting very clear on your program and budget, you’re going to answer the question: How will you sustain the program? You’ll have program goals for 12 months. I have a program development blog post: Develop a Grant Ready Program and a free worksheet.

Becoming grant ready requires hard work. You may or may not get the grant, but you will build a nonprofit that is able and ready to find, accept, and handle funding. When you start doing this grant ready process, you’re not only becoming grant ready, but you’re becoming funding ready. I have a Comprehensive Grant Process Readiness Checklist that has everything we’ve talked about this month to help you be grant ready. 

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