Discern the Costs and Benefits of Grants

Stop!  Before you respond  to that grant opportunity you just read in your inbox, take a few minutes to discern if you should apply or not.  As I discussed in my blogpost, “Top 3 Grant Writing Tips,” just because a grant is available doesn’t mean it merits your time and resources to apply.  So, be selective.  The costs may outweigh the benefits.

Quick Feasibility Test

Before you invest time in applying for a grant, answer these three critical questions to help you discern the costs and benefits:

  1. Is your organization an eligible applicant?
  2. Does the grant’s purpose align with your organizational mission and vision?
  3. Does the grant support one or more of your program goals or initiatives?

If you answered YES to all three questions, the grant holds potential and is worth further consideration.

Strategic Considerations

Developing grant proposals is a time-consuming task, especially if you commit the time needed to be successful.  And, based on my observations, staff time at the typical nonprofit organization is a limited resource.  Consider the following questions to help you choose grant opportunities strategically:

  • Has your organization received support from this grantmaker in the past?
  • Is the proposal aligned with the grantmaker’s mission and funding interests?
  • Does someone in your organization (e.g. board member) have a relationship with the grantmaker?
  • Are any other organizations in your service area applying for this grant?

Budgetary Considerations

  • Will the range of funding available meet your need for funding?
  • Can you pull together the matching funds (if required)?
  • Can the grant funds be used for administrative/overhead costs?
  • Does the timeframe for receiving a grant award meet your projected cash flow needs?
  • If you receive the grant, will you be required to complete a fiscal audit?
  • How much will it cost to sustain the program after grant funds are expended?

Operational Considerations

  • If awarded, how will the grant impact your staff?
  • Does your management staff have the capacity to oversee the project?
  • Can you implement the grant within the grantmaker’s timeframe?
  • How will administering the grant impact your accounting system?
  • Will you be able to submit timely grant reports?

Proposal Preparation Considerations

  • Do you have the human resources available for completing grant development tasks?
  • Is the timeframe for submitting the proposal reasonable?
  • If it’s a federal grant, are your organization’s registrations with the System for Award Management and current?
  • Can you adapt verbiage from previous proposals or other existing documents?

The Take-Aways

  • Yes, keep looking for grants to fund your mission.
  • No, not every grant is a good fit for your organization.
  • Take a proactive approach – invest a little time to discern whether or not to apply for grants. How much are you willing to spend for the up-front and implementation costs in exchange for the potential grant funds?

Check out this tool I developed to walk you through the discernment process.

Rating Scale for Grant Opportunities (PDF)