The strategic purpose of grant fundraising is to activate institutional generosity. Grants are a common choice for ESEs as workforce development is a priority of many grantmakers. Importantly, grants have a higher return on investment when an organization has strong infrastructure for program evaluation. Consider grants as a priority strategy when:
- You have a strong outcome-driven logic model fueled by clear program design
- You have a program model that appeals to multiple funding priorities (e.g., workforce development funding and mental health funding might apply to your program)
- You have strong evaluation and reporting infrastructure
The following overview provides insight on how to conceptualize and operationalize the grant strategy.
Request for Proposals (RFP): A grantmaker’s outline of the grant opportunity. The RFP is created by the grantmaker and outlines the purpose of the funding opportunity and the requirements for the application.
Letter of Intent (LOI): A letter or short grant application that is sent prior to a formal grant application. It indicates to the grantmaker that you are interested in applying for the opportunity. It can also be used to introduce yourself to a grantmaker who has an invitation-only grantmaking process.
Logic Model: A visual representation of the relationship between your program activities and program impact.
Prospecting for grants
Competitive grants opportunities can be found by clarifying the source:
- Foundations: Organizations which offer philanthropy through a competitive application process. Foundations are divided into several categories. Private foundations operated by a nonprofit and offer funds derived from a single source: an individual, a family, or a corporation. There are also family foundations, specifically tied to the philanthropy of a single family. Corporate foundations offer philanthropy from the profits of a business. Community foundations serve the philanthropic goals of donors within a given geographic area, for the benefit of that area.
- Government: Public institutions which offer philanthropy through a competitive application process. Government grants are offered at the federal, state, and municipal level.
The easiest way to find private foundation grant opportunities is to subscribe to a database such as Candid, which will allow you to search for opportunities based on specific criteria. It’s also possible to find foundation grant opportunities through a google search of “foundations that fund”… and then fill in the blank with your program goals. You can also look to your state’s association for nonprofits, which often offer grant opportunities to members. The Community Foundation Locator also lists major community foundations by state.
Government grants are offered by federal, state, and local governmental agencies and can be awarded to a range of recipients, from states to small nonprofits, depending on the goal of the funds. Government grants often require a strong grant management infrastructure capable of working across partnerships, reporting into additional databases, and managing budgets in a prescribed way. It’s easy to prospect for government grants because they are all required to be posted on websites like grants.gov and state and local procurement websites.
Prospecting also occurs through relationships with program officers. Program officers are individuals at the grantmaking organization who are responsible for overseeing funds and relationships with grantees. Throughout the prospecting process, it can be helpful to build a relationship with the program officer responsible for the grant program you are applying to. They may invite you to apply for the grant that is otherwise invitation only. They may also give you feedback on your proposal and advocate for your application to the review committee.
Overall, it is essential to continuously build relationships with prospects since funders change priorities and strategies often. There are many prospects you may have for years before being able to make a real ask. If your bandwidth permits, reach out to additional prospects after reaching your prospect goal for the year.
The grant proposal
In order to determine the most effective request for a given grant opportunity, begin by reviewing the grantmaker’s budget template. It’s important to craft your proposal around the budget, rather than craft a proposal and put a budget together as an afterthought. It will almost certainly read like an afterthought. Start by discussing which line items in your budget are best aligned with the RFP’s priorities. To come up with a dollar amount for your proposal, look at the award range and prior awards given to similar organizations. A lot of leaders ask, “Should I ask for an amount on the higher end and trust that they’ll offer less if my ask was too high? Or is it safer to be conservative if it’s my first time receiving funding from this organization?” These are great questions for the grant officer. The best relationships with grant program officers will allow you to ask them to recommend a dollar amount, and they’ll tell you.
Think of your budget as the table of contents for your grant application, rather than an appendix to your application. There should be nothing in your budget that isn’t discussed in your narrative and nothing in your narrative that isn’t represented by your budget.
You might wonder whether you should allocate funds for the new program you have outlined in the upcoming year’s budget or towards something that’s currently operating. In short, design your proposal to relieve your budget rather than create new processes or programs that don’t yet exist.
ESEs can apply for funds to support enterprise operation costs such as employee salaries and training materials, even though these are not traditional nonprofit grant expenses. The reason is that these are necessary costs to achieve programmatic outcomes.
This may be the single most critical element of grant management. Carefully decide on and articulate the outcomes you plan to achieve. Some of this may be determined by the funder and outlined in the RFP. Some funders are vague about what they’re looking for– they may only highlight priority areas for their organization. Others provide a goal table template and pre-populated measures. Typically, human service funders will calculate a cost per participant served as a result of their grant. This is calculated by taking the total grant request and dividing it by the number of individuals you expect to serve. This is where numbers get complicated, as it’s often very difficult to isolate individuals served as a result of this grant from the total number served by your program at large. One way to simplify the equation is to highlight the cost per participant for your program at large – your total annual program budget divided by the number you plan to serve that year.
Another effective outcome for ESEs to share with grantmakers is the Social Return on Investment (SROI) data. This can be calculated using the following guidelines.
A good rule of thumb for deciding on outcomes for the grant is to simply provide and explain your organization’s existing logic model. You should avoid creating new outcomes for any particular grant, which means avoid calculating new data points if at all possible. Organizations with thoroughly researched logic models prove their organization’s competency and are scrutinized less. Click here for further guidance on determining outcomes within the context of fundraising.
Managing the grant strategy
A grant gift table provides a planning tool to determine upstream metrics that generate revenue downstream. For the purposes of grants, prospects would be organizations that you have qualified and who are a good match for your organization. Asks are the number of proposals you submit. The ratio of prospects to asks-to-gifts depends not only on the quality of your grant writing and your organization’s reputation, but also your ability to ask the right organizations at the right time. It’s really difficult to prescribe a standard ratio, but you may track your ratios over time to measure your efficiency and accuracy with proposals.
|# of Gifts||Gift amount||# of Prospects (2:1)||# of Asks||Total Giving|
In this example, the number of prospects is set at a 2 to 1 ratio. For every gift, we have to identify 2 prospects. This ratio could go up or down depending on a variety of factors but 2:1 isn’t too out of the ordinary assuming that our identified prospects are not cold.
The number of asks is based on a 66% success rate, or 2/3. Therefore, if we need 8 gifts, we need to make 12 asks. If you’re doing good relational work, you are not going to have that many rejected proposals. Still, it is better we manage our expectations.
The following milestones will build an operationalized grant strategy over time. They are not in order of priority. The priority of these milestones should be established by the individual team:
|Milestone||Example of Success|
|Develop and document weekly/monthly routine for grant activity||A calendar of weekly/monthly grant tasks and activities is created with assignments to all relevant team members; Development Director uses this calendar for one-on-one check-ins with each staff member|
|Establish prospecting/research plan||Create a calendar and protocol for developing prospects needed to achieve prospect goal derived from grant table|
|Establish/document routines for using CRM for grant efforts||A protocol document is drafted, which includes guidelines for tracking all grant activity|
|If not using a CRM, create a grant management tracking sheet||A spreadsheet is created, which tracks all current awards and necessary reporting requirements for each award. A separate tab tracks prospects, due dates, and log in information for all grant portals.|
|Establish clear metrics for grant efforts by quarter||Complete grant table to determine annual metrics, divide those metrics for quarterly goals; priority metrics include: #prospects, #proposals submitted; secondary metrics include: #stewardship touchpoints, #grantmaker visits, average ask amount, success rate|
|Create/document grant management process||A protocol document is drafted, which outlines the organization’s methods for managing a grant once received. This includes the reporting and stewardship process|
|Create grantwriting/review process||A protocol document is drafted, which outlines the organization’s methods for developing a proposal. This includes what programming and budget is proposed, which program lead is including in the proposal design process, who writes the grant, and who reviews it|
|Maintain quarterly goals on grant metrics||Identify 25 new prospects, submit 5 proposals, complete 10 stewardship touchpoints|
|Build progress on upcoming fiscal year grant metrics||Identify 10 new prospects for next fiscal year, submit 5 proposals for next fiscal year|
|Create grant sourcebook||Compile and review grant sourcebook using previous applications; update grant sourcebook with revised program language and missional goals|
|Create grant decision matrix||Define factors on our decision matrix; test matrix with 2 RFPs; revise and finalize matrix|
|Establish impact reporting processes||Template is created for tracking data to be submitted to grant makers; qualitative and quantitative field data is coming in on time from team members|
The most essential roles in operating a grants strategy are managing the relationships with grant makers and producing grant applications and reports. These can be owned by the same person, but there are two separate priorities within this role. It is also possible to outsource the production of grant applications and reports.
Grants Manager: The Grant Manager serves as an essential member of the fundraising team by aligning the grant program with the organization’s overarching fundraising plan. This position assists the executive team in developing strong concepts for the solicitation of new opportunities, manages grant writing projects, monitors progress, develops reports, and stewards relationships with grant funders. Key performance indicators include revenue growth through grant acquisition and grant renewals.
Organizations with an in-house Grants Manager often do not need to outsource grant writing and reporting. However, sometimes the volume of applications and reports requires additional support. In this case, the Grants Manager would select a contractor and manage that contractor.
Click Here for Seed’s Job Description repository.
Additional Resources: Do you want to spend more time on this?
10 min: Review Seed’s Logic Model template
20 min: Review Seed’s LOI template
2 hours: Complete Seed’s Grant Portfolio template to manage your grant pipeline
15 hours: Use Seed’s Common Grant Language Sourcebook to build and organize your boilerplate grant language
Seed is a community of professional fundraisers and nonprofit leaders who strengthen and scale culture-building institutions in the social sector. Seed’s consulting team has supported REDF’s portfolio since 2019.