Megan Campbell, MPA, GPC

All the time and effort you put into designing a great project and developing a clear, well-written grant proposal has paid off and you’ve received a notice of award from the funder. Now, it’s time to ensure that you are a great steward of the grant funds that you have received.

Like any business or corporation, nonprofit organizations must manage revenue and expenses to deliver their products and services to communities. While nonprofits have been charged with addressing the world’s most critical issues, they often lack the adequate resources required to do it. Most organizations need things like safe facilities, light bulbs, furniture, computers, printers, office supplies, etc. to function. Large organizations such as hospitals and university systems are seldom scrutinized for these kinds of “operational” expenses, yet small organizations often accept the nonprofit starvation cycle, assuming that items needed for operations should be donated, mismatched, and held together by duct tape. There is an unspoken yet oft-acknowledged expectation that small nonprofits should rely on free or donated space, equipment, and even underpaid professional expertise more than their larger counterparts.

Prospect research is the term commonly used for the process of identifying potential sources of funding for an organization or program. If your organization is a small or start-up nonprofit with limited staff or development support, the task of prospect research can feel both urgent and overwhelming. Fear not. Here are a few tips for beginning your prospect research process that will help start you on a path to success.

Defining Small Nonprofits: Whether a nonprofit or not-for-profit, a charitable organization’s “size” is not determined by its facility, number of staff, or services to the public but by the size of its operating budget. Large organizations have operating budgets in the $10- $50MM range, while organizations with annual budgets of $5MM or less are considered small. Large, nationally affiliated organizations tend to get the lion’s share of public recognition and visibility; however, they are not representative of the U.S. nonprofit sector as a whole. In fact, the National Council of Nonprofits reports that 92% of organizations within the nonprofit sector are small organizations with annual revenue of less than $1MM. Yet the reality is that all charitable organizations depend on public and private support (i.e., government or private grants, individual donations, in-kind gifts, volunteers) to achieve their missions, and small organizations often grapple with how to compete in a market publicly dominated by their larger counterparts.

Congratulations! You have received notice that a local foundation will gladly support your organization and/or program during the coming year. The foundation board or staff are excited about your mission, your plans, and helping serve your community. You record the amount in your donor and accounting software, generate a letter acknowledging the gift, and move on to managing the implementation of program activities. Right? Well, no.