In working with nonprofit organizations, I have been a part of numerous conversations with organizational leadership who have seen grants as the solution to all their revenue shortfalls. Grants are part of the revenue mix for many nonprofit organizations, providing a source of funding for various projects. However, grant recipients need to have a clear understanding of what grants can and cannot pay for as they build this revenue into their budgets. Let us explore the possibilities and limitations of grant funding.

Funder relations can sometimes feel tricky to navigate. Is it okay to reach out? What’s an appropriate amount of time to wait? It’s important to remember that funders are people, too. Even though they hold the purse strings, you can approach them respectfully unless the opportunity prohibits them from talking individually with applicants. Let’s discuss timing, communication strategies, and what to do if you get ghosted.

Too often, there is confusion between grants and donations in nonprofit organizations. When it comes to nonprofit funding, these two terms are often used interchangeably. Additional confusion can be found when major individual donors begin making donations in amounts similar to what an organization can expect to receive as a grant from a foundation. Nonprofit professionals know that both funding streams mean revenue for their organization but may only have a vague understanding of the distinct characteristics and requirements of each. Understanding the key differences between the two helps nonprofit professionals make informed decisions on funding strategies.

Before I began working as a grant consultant, I did not understand all the details and intricacies of grant budgets, including the difference between restricted and unrestricted funds. I remember working with one nonprofit that was thrilled to receive a significant grant for program staff salaries, only to realize later that they could not move those funds elsewhere when a staff member unexpectedly left the position, and it took three months to find a replacement. They could not use any of that money for other programming or general operating expenses, which made the organization feel they had missed out on money on which they previously budgeted. This experience taught both me and the nonprofit the benefits and challenges of having restricted funding in their budgets. If you are working with grants as a consultant, or even working as a grant professional within a nonprofit, getting a handle on the differences between restricted and unrestricted grants is going to make a big impact on how you approach funding and budget development.

You know that you need an external evaluator. Maybe your organization doesn’t have the internal expertise or time to conduct a program evaluation yourself, or a grant funder requires a third-party evaluation. Many programs—and organizations—feel that they can’t afford an external evaluation, and funders don’t always pay for program evaluations. However, if you can convince donors and funders that your program is effective and efficient, you’ll be more competitive for future funding. A strong evaluation provides valuable information for data-based decision-making to inform program refinements and continuous improvement. Funders have a limited amount of dollars to award and, therefore, want to fund effective projects.

If you have ever flinched at the mention of policies and procedures, conflict of interest, or grant reporting, we may be able to help take the fear out of grant management. Too often, grant management is seen as scary and messy, with staff hesitant to learn because they may uncover more than they know how to handle. In the nonprofit field, it’s common for staff to be put in a role where they manage grants but might not have the knowledge or resources to understand what that entails. With this grant management series, we aim to outline some of the commonly seen issues and provide resources to learn more. Check out the previous post on conflict of interest policies and procedures! Now, we are diving into time and effort reporting and staff allocation.

Fundraising is not always easy. Some causes more easily tug on donors’ or funders’ heartstrings more than others. I am sure you can picture the TV commercial with sad music and malnourished children urging you to donate just $2 per month to help feed them. As a mother, I feel physical empathy for mothers of infants who do not have enough formula, diapers, and clothes to care for their children. Causes like this produce a warm, fuzzy vibe that you just cannot say no to. Not all organizations naturally evoke such strong emotions. In some cases, the emotions may be negative and that can make fundraising tricky. What if your cause (or organization) is the big elephant in the room blocking funders from seeing the impact you can/do have? Perhaps you are part of a national organization involved in a scandal, a school district that has recently failed accreditation, or a local nonprofit perceived to serve only wealthy people. Each of these situations can make it challenging to raise the money needed, because donors and funders may be blinded by the media or personal bias. How do you overcome that hurdle?

Staying on top of your grant projects doesn’t necessarily require fancy software or the newest technology. Data or donor management systems are excellent tools, but you only get out of them what you put in. Small organizations sometimes don’t have the staff capacity it takes to utilize all the features they offer. However, if you start organized, it’s much easier to stay organized no matter what system you are working with. Start with the basics. Set up an organized filing or record-keeping process, learn what you need (and what you don’t), and take advantage of technology-supported opportunities when the options arise. If time and cost are obstacles for your organization, here are five tips to keep it together until you have greater capacity: