I’ve been a grant writer and I understand what it takes to write a successful grant. I’ve found that having everything in place that grants ask for is over half the battle. This means knowing who your organization is, who you serve, and how you provide services. You’ve probably heard the term grant ready before. But what is it and how do you get there? Let’s address the basics first.
What is Being Grant Ready?
Being Grant Ready is the process where an organization assesses, plans for, and executes their plan to research/find, apply for, win, and manage a grant successfully. There are four areas of the organization’s infrastructure you will focus on to be grant ready- Organizational, Operational, Financial, and Programs.
Let’s talk about the four areas specifically.
Organizational means you are a recognized company in your state with Articles of Incorporation and have your 501( c) 3 tax-exempt status. You will have a mission statement and a strategic plan. I have training on these in Nonprofit Founder’s University if you need to know more.
Your Board is also critical to grant readiness. Foundations are investing in your organization and want to know the Board is committed to the organization. Here are five characteristics Foundations look for in Boards:
- Be active and meet monthly;
- Take the lead on fundraising and connect the organization with donors and funders;
- Is diverse in expertise and ethnicity who mirrors your target population;
- Has committees; and
- Invest time and money.
Operational means the day to day activities of the nonprofit. Do you have processes and systems in place to handle money? Do you have policies and procedures? Are you partnering with another organization to further your mission?
Financial means how your organization complies with Federal rules and receives income. Here is a list of items you need before you write the grant:
- A budget for the overall organization. Also referred to as Operational Budget, General Operational Budget, or Gen Ops.
- A fundraising plan
- 990 or 990-EZ
- An Audit or Independent Accounting Review
- Money Handling Policy
- Board member’s financial participation
Foundations want to invest in projects that have the greatest impact on the communities they serve. The best way to show an impact in your community is to have a program. I go into detail in Develop a Grant-Ready Program (and a Free Worksheet), and lay out a complete program that is grant ready in my book, I Have My 501(c)3! Now What?!? Your Blueprint to Starting Your Nonprofit Without Being the Sole Funder. You can also find more resources on program development in my free Facebook group, The Nonprofit Founder’s Club.
- Organization’s IRS 501c3 determination letter
- Any registration/certification required by your state
- Organizational budget – current and upcoming fiscal years Audited financial statements – last 2 years if available (Some Foundations will take an Independent Accounting Review if your budget is under $250,000).
- Most recent IRS Form 990
- Board of directors list: Names, affiliations, responsibilities
- Documentation of support from your board of directors; i.e., what percentage of your board contributes funds to support the organization? (Ideally, 100% of the board should financially support your organization.) Often Foundations will ask for the Board list and ask that the Board of Director’s support is notated on the list.
- Organization chart Newsletters (if available)
- Published articles highlighting your organization (if available) Criteria for board selection
I have a comprehensive grant process readiness checklist.
Why Would We Want to be Grant Ready?
Taking the time to be grant ready, we’ll ensure higher odds of receiving grant awards. The most seasoned grant writers in grant ready organizations report a benchmark of one in ten grants, receive awards for their organizations. This means an organization that isn’t has less than a one in ten chance of seeing a grant award. I want you to hear that organizations that aren’t grant ready have a less than one in ten chance of seeing a grant award. Nonprofits who are grant ready, demonstrate that they are a good investment. Foundations want to know that they are making good investments in the community, through your non-profit having your ducks in a row and a track record of impact. You become a less risky investor.
When Grants, Aren’t the Answer.
Time is a Factor
If time is a factor grants, aren’t the answer. You need funding now. Grants take three to six months to notify you if you are awarded the grant or not.
Let me explain the process that a grant goes through so that you can understand why it takes so long. You’ve written the grant. You have submitted the grant and it’s all before the deadline. They have to wait for the deadline to be able to start processing all of the grants that come in and there can be 75 grants, 150 grants, 2000 grants that come in. It varies. They start out at the deadline date processing the grants and usually the first round is the technical round. What that means is they go through every single grant and they look specifically at the technical parts of the grant. They look at the margins and the font. They look at length and if you followed their directions. In this section, is it a page? Is it more than a page? If it doesn’t meet their technical requirements, the grant proposal is out. They don’t look at anything else in the grant. If you are technically sound, you move to round two and round two usually has a committee of grant reviewers, who then, take the grant and each one of the grant reviewers is typically assigned one section of the grant. Each reviewer is given criteria to rate their section. All of the section scores are put together, sometimes in a weighted fashion, and a total score is assigned to the grants.
The third round is taking the top scorers and trying to figure out the distribution of grant money available. They are looking at all of the grant proposals and trying to figure out how to fund as many of them as possible. Which means you may not get the whole amount. You may only get a portion of what you asked for once they have decided on who is getting the grants. The organizations that received the grant are notified by mail, email, or through an online portal.
If your project will take more than a year to complete grants, aren’t going to be for you. The reason is that grants are typically awarded for a year at a time. And if you don’t spend the money during that grant cycle, you will be responsible to repay the unused funds. You want to make sure you’re able to use all of the funds within that grant timeframe. If what you want to do is going to take more than a year to complete, you might want to rethink that grant. Next, you need the project completed before a grant cycle begins. Under these circumstances, grants, aren’t going to help. They pay for expenses during the grant awarded timeframe.
The time after the organization has been notified of the award to the end of the grant cycle is typically the grant timeframe. This is usually a year unless you are specifically awarded multi-year grant funding.
If You Don’t Have a Funding Strategy
If you don’t have a funding strategy now, then grants won’t help. A funding strategy is typically found in a fundraising plan. If you have a fundraising plan, you are good. If you don’t, then get one because this means you have multiple means of funding your nonprofit. Funders don’t like to be the sole funder. If you’re asking them to be the sole funder, they’re probably going to pass.
You Don’t Have a Formal Program
You don’t have a formal program established. Programs are most often funded, at least partially because they make the most visible impact. This makes programs the easiest project to receive a grant for. Use the program development template to help you formalize your program.
Grants can be a very good thing for your nonprofit.
Grants can be a very good thing for your nonprofit. I don’t want you to get me wrong here when they are part of your funding strategy. They are awesome. When you are ready for grants, they are awesome, but they can be detrimental before that. They are a very good thing when they can help you get projects completed or infuse funding into your program. Most new nonprofits aren’t grant ready and have work to do to get ready in the four focus areas- organizational, operational, financial, and programs. Grants aren’t right for every situation. So knowing when pursuing grants is a good use of your time and when it’s not keeps you focused on the right things in your nonprofit.
Mission, Vision, Values Training
Fundraising Plan https://www.nonprofitfounders.club/first-year-fundraising-plan/
Develop a Grant-Ready Program (and a Free Worksheet)
I Have My 501(c)3! Now What?!? Your Blueprint to Starting Your Nonprofit Without Being the Sole Funder (book)
A Comprehensive Grant Process Readiness Checklist