What is a nonprofit Grant System?

Grants as a funding source

There is a lot more to getting grant funding than learning how to write proposals.  In our last whitepaper in this series we discussed the extent of grant funding as a resource in philanthropic giving, myths regarding grants, conventional wisdom, and strategies.  We introduced the term grant system in reference to the practical steps needed to establish a strong grant writing system within an organization.  The purpose of this whitepaper is to expound in more detail on how a grant system operates and how it can be used to great effect within your organization.

The Grant System

The grant system comprises: creating a system for searching for grant sources, establishing a grant source database, providing a database for tracking the individual grant awards that your organization is seeking (with metrics for evaluating each award), prioritizing the grant awards and assigning them to your team of grant-writers, creating a grant writing training program to enhance the skills of your staff, providing a review process for evaluating the quality of proposals, and establishing a system of performance metrics to evaluate overall efforts of grant funding and the success of your grant-writing team.

searching for sources

Grant funding can be found in a myriad number of places; however, the two largest contributors to grant funding for non-profits are foundations (approx. 10% of total grant funding in 2014) and government sources (approx. 90% of total grant funding in 2014)[1].  It is perhaps best to start there.

• Foundations – a good place to start for knowing more about foundations in your area is the Foundation Center, which can be accessed here foundationcenter.org. This website offers a search tool called the Foundation Directory Online that provides basic sourcing services if you register with them here https://fdo.foundationcenter.org.  The basic sourcing services include advanced search terms to narrow down a foundation search.  The search information includes foundation/grant name, total assets, and total giving for these foundations.  If you are willing to spend a little money to get more detailed information such as contact information, you can upgrade by subscribing to their payment plans here www.subscribe.foundationcenter.org/fdo
• Federal Government Sources – the best place to look for federal grants is grants.gov or https://www.usa.gov/grants.
• This website provides search tools that can sort through grant opportunities by specific grant objective.
• State and Local Government Sources – it is important to search other governmental sources for possible funding A great place to begin is https://www.tgci.com/funding-sources.

Grant source database

It is an essential part of this process to track funding sources and their respective grants so that you can accurately and effectively focus on those grant opportunities that will provide you with a greater chance of winning grant funding (adapted from Browning 2014).

Once you’ve compiled a good set of online resources to draw information from and you are ready to start looking for specific grant sources, you need to create an Excel spreadsheet and catalogue them as you go.  Be sure to use a standard database format: column headings should serve as the variables of interest and rows as the grant funding sources.  To make this process simple from the start – be sure to catalogue sources that align with your organization’s objectives and mission.  If a foundation primarily funds health projects and your organization works in education, skip this grant source and move on. 

Important information to track for these sources is: name of organization, foundation or government agency, synopsis of organization or agency’s mission, types of funding provided, total funding available, number of grants funded in prior years, dollar amount of grants funded in prior years, Charity Navigator ratings (www.charitynavigator.org), source’s website address, governing board members info, management info, contact info, address or location, etc.

grant award tracking

Next step is to review individual grants awarded from each source and to select the grants that best fit your organizational goals.  Start a new Excel spreadsheet or a new sheet in the file you already created to track sources to keep it centralized.  Again, a database format should be implemented: columns will be variables of interest and rows will be the grant awards. 

Important information to track for these grant awards will be: name/number of grant, the funding source (foundation or government agency), award amount, deadline for proposal submission, number of days till proposal submission, alignment with organizational objectives (create your own measure, e.g. a value ranging from 1 to 5, 5 being higher alignment, with specific criteria for each rank that assigns how close the grant descriptions fit your organization), source website address, link to submission guidelines, and contact information for proposal submission.

Prioritize and assign

Once a preliminary dataset of grants has been constructed, use the sorting function in Excel to review these variables.  Prioritize them based on several factors, such as: number of days remaining before submission, award amount, and alignment with organizational objectives.  Create a new variable called “priority” and assign each grant a value (create your own measure, e.g. a value ranging from 1 to 3, 3 being higher priority) according to the criteria you think is best.  Time is a big consideration.  If you have a rapidly closing time horizon on a specific grant, you may want to assign it higher priority to get it submitted in time.  But other factors are important as well; for example, if a specific grant has an approaching deadline, a high award amount, and a high rank on alignment, you would likely want to assign this a 3 on priority. 

Once finished with prioritizing, sort on the priority indicator and begin assigning grant writers on your staff these proposals along with timelines for submission.  Be cognizant of your staff’s existing workload in addition to the time needed to write these grant proposals.  Have staff be realistic about their ability to meet these deadlines and keep lines of communication open.  To help staff manage these demands, create a grant writing organizer that prioritizes grants, provides timelines for each grant, and milestones for when certain phases of the proposal writing and editing need to be completed.  You don’t want to swamp your staff and create burnout or high turnover.

training program & internal review

If you are a new nonprofit struggling with trying to make ends meet, you don’t necessarily have the budget to hire professional grant-writers.  What you can afford is putting together a grant writing training program and hiring an army of interns to focus on writing proposals.

Provide Materials and Training Exercises - there are many online and print resources that will help you build the skills of your grant writing staff.  A good place to begin is: Grant Writing for Dummies, Study.com, grantwritingusa.com, or the NIH^[2].  From these resources create a training program with a practicum for new employees and also exercises for the continuing education of veteran employees.  If you don’t have experience in building a training program, find someone who can and would be willing to work pro bono to help your organization with a training program.  You can start with local community college and university instructors.

Set up Workshops with Experienced Grant-Writers - whether asking experienced grant writers in the field or grant writer’s within your own staff, you need to expose your grant-writing staff to the experiences of veteran writers who can steer your employees in the right direction and give them guidance when it comes to particular pitfalls.  For a good resource for connecting with grant professionals see: American Grant Writer’s Association, Grant Professionals Association, National Council of Nonprofits, and Philantech.

Review and Critique Each Other’s Work - develop a system of internal review where one grant-writer, once finished with a proposal, has to submit their draft to another grant-writer to review it with comments.  Be sure to promote an environment of collegiality wherein the tone of a critique is professional and straightforward.  Encourage your staff to learn from one another.  This dynamic process will build a strong staff quickly as each writer builds on the expertise of another.

The combination of consistent training exercises, workshopping with experienced grant-writers, promoting an environment of collegial critique, and a system of internal review will propel the expertise and quality of your grant writing staff.

performance metrics

Once you’ve started the process of submitting proposals to grant funding sources, it is essential that you track the progress of the organization and your grant-writers to help improve the process and expand the possibilities of winning awards.  Below are some helpful evaluation metrics to track.

Grant Success Rate - you’ll also want to know how often you are achieving success in winning grant money.  This rate is determined simply by dividing the number of grants won by the number of grants applications submitted.  This is usually tracked per grant-writer, but can also be generalized to the organization itself as well to determine overall performance.  Don’t include formula grant applications in this metric.

Grant Funding Rate - you don’t necessarily want to stop with the number of grants that you’ve won as a measure of performance because each grant is different and provides a different amount of funding.  The grant funding rate is the amount of funding achieved by the grant-writer in a fiscal year divided by the total amount of grant funds collected by the organization in a fiscal year.  This gives you a better indication of your grant-writer’s ROI than just the success rate.

Time Spent Per Proposal/Application - when an organization only focuses on production rates, this potentially decreases the quality of the grant writing.  It is important then to try and track the amount of time a grant-writer spends on writing their assigned grants.  A grant-writer that is only spending 3 hours of writing per grant will not yield a quality product.  Poor quality proposals will yield poor results.

Employee Feedback – don’t discount qualitative data.  Take some time to interview your employees to see where exactly problems or bottlenecks are occurring in the process.  This type of evaluative research can be extremely fruitful in helping to shape better processes.

These are only four of a myriad number of performance metrics that can be used to assess the trajectory of your grant system.  Evaluation is a necessary component of knowing whether key decisions (e.g. grant source selection, alignment with goals, prioritization, training, internal review, time management, etc.) in the grant system need to be modified to enhance performance in the future.

What do we do now?

1. Start with a process for finding grant funding and establish metrics and a database for cataloging all of these sources.
2. Try and narrow the search to those funding sources that will most likely fund your organization and programs.
3. Track all of these funding sources and their particular grants (each source may have more than one grant that applies) and prioritize them based on a set of criteria that you think works best for your organization
4. Hire grant-writers or assign grant writing duties to existing staff/interns.
5. Create a grant-writing training program and establish an internal review process that can help build your staff’s expertise in grant-proposal writing quickly.
6. Establish a system of performance and quality metrics that allows the organization to evaluate how well the grant system is operating and provide useful information to help grant-writers improve their skills as well as their success and funding rates.

Grant funding is a vital component for many nonprofit organizations that are seeking to expand their programs and operations.  Establishing a grant system that is knowledgeable, flexible, innovative, and evaluative will help propel the organization toward successful grant funding.

[1] This statistic was sourced from the National Philanthropic Trust website: http://www.nptrust.org/philanthropic-resources/charitable-giving-statistics/

[2] The National Institutes of Health (NIH) offers free information for grant writing along their guidelines. It can be accessed at http://www.cc.nih.gov/training/resources/grant_writing.html

Sources

From ‘Charitable Giving Statistics,’ National Philanthropic Trust, URL: http://www.nptrust.org/philanthropic-resources/charitable-giving-statistics/

Browning, Beverly A. (2014) Grant Writing For Dummies, 5^th Edition. For Dummies, URL: http://www.dummies.com/how-to/content/grant-writing-for-dummies-cheat-sheet.html