Talk to anyone associated with a nonprofit organization, and they will tell you that there isn't enough grant money. Yet according to The Philanthropy Outlook by Marts & Lundy, giving by foundations is predicted to increase by 5.9 percent in 2017 and by 6.0 percent in 2018. And this increase is of vital importance given the uncertain future of government funding levels.
Be aware that grant funding is available. According to early results from GrantStation's Spring 2017 State of Grantseeking™ Report, 75 percent of those organizations that submitted just one grant application won an award. And the number of applications submitted increases the likelihood of winning awards.
Ninety-one percent of our respondents who submitted three to five grant applications received at least one award. And 97 percent of our respondents who submitted six to 10 grant applications received at least one award.
So, one way to increase your organization's chance of winning grant awards is to submit at least three grant applications. This can be difficult to do. The grantseeking challenge of organizational lack of time and staff relates to indirect and administrative cost control techniques; almost two-thirds of our respondents (65 percent) reported reducing staff in order to control overhead.
Private foundations continue to be a funding source for most respondents; 81 percent of respondents reported that they received awards from private foundations. Although government awards are still "big money," organizations should research today's private foundations to learn how they can fund projects or programs.
Another benchmark to consider when making applications is organizational age. Funders (particularly the federal government) tend to look for proof of organizational sustainability as evidenced by organizational age. Over 76 percent of organizations that reported the federal government as the source of their largest award were more than 25 years old.
However, 55 perent of organizations that reported other grant sources as the source of their largest award were under 25 years old. These other grant sources included religious organizations, the United Way, donor advised funds, civic organizations, and tribal funds.
Organizational collaboration may be another way to increase grantseeking success; it is a trending topic and is encouraged by many funders. Keep in mind that an organization's annual budget, with the implied increases in staff and infrastructure in tandem with the increases in budget size, influences collaborative activities.
In the spring 2017 report, the budget entry point to participation in collaborative grantseeking was $25 million. Fifty-four percent of organizations with budgets of $25 million or more participated in collaborative grantseeking in the last six months of 2016. Seventy-one percent of organizations with budgets under $25 million did not participate in collaborative grantseeking in the last six months of 2016.
In comparison, in the fall 2016 report, the entry point was $1 million. Sixty-eight percent of organizations with budgets of $1 million or more participated in collaborative grantseeking in the first six months of 2016. (That's compared to 36 percent in the spring 2017 report.)
Sixty percent of organizations with budgets under $1 million did not participate in collaborative grantseeking in the first six months of 2016. (That's compared to 75 percent in the spring 2017 report.)
Challenges mentioned by organizations that did participate in collaborative grantseeking were related to the time and ability to manage the collaboration. One respondent summarized it this way. "They're (collaborations) seen as a sign of organizational strength and capacity by funders, but ironically can be much more difficult to manage because of lack of clear management order, needing to create new initiative drains capacity, and organizations don't necessarily move at the same pace to be efficient in management."
With just 21 percent of respondents reporting general support as their largest award type, grant funding for indirect/administrative costs is a continued challenge to organizations. Our respondents generally kept their costs low; 69 percent reported indirect/administrative costs as 20 percent or less of their total budgets.
Respondents were asked, "How did you reduce your indirect/administrative costs?" Nearly two-thirds (65 percent) reported that they reduced indirect/administrative costs by eliminating staff, while 29 percent reported increased reliance on volunteer labor. Indeed, reductions in the number of staff as a cost control technique increased by 5 percent from the fall 2016 report, and increased by 20 percent from the spring 2016 report.
And while respondents reported that nongovernmental funders will generally assist with indirect/administrative costs, these funders strictly limit the amount that they are willing to cover. Forty percent of respondents reported an allowance of 10 percent or less for these costs, and 25 percent reported an allowance of 11 to 25 percent for these costs.
Eight percent of respondents reported that nongovernmental funders would not cover indirect/administrative costs, while 23 percent were unsure of the coverage level. Only 5 percent of respondents report that over 25 percent of these costs were paid by nongovernmental funders.
We at GrantStation hope the data in the soon-to-be published State of Grantseeking™ report helps to alleviate some of the frustration among nonprofit organizations as they engage in grantseeking activities.
And we respectfully suggest that you consider investing in tools to help organizational growth, such as membership in GrantStation. At GrantStation, we help you to keep your organization financially healthy through assistance in developing a strong grantseeking strategy. Member benefits provide the tools for you to find new grant sources, build a strong grantseeking program, and write winning grant proposals.
On May 4, join us for this free webinar for TechSoup's audience (normally $69!) taught by GrantStation's CEO, Cynthia Adams. Cynthia takes you through a step-by-step process to develop a grantseeking team, all working toward a common vision: to strengthen and build your grants program.
On May 9, join this free tour of the GrantStation website. This tour will provide tips on the most effective way to use all of the valuable resources the website offers, including their extensive funder databases that can help you identify the grantmakers most likely to fund your programs or projects.
On May 16 and 17, you'll be able to get a GrantStation annual subscription for just $99! The regular discounted cost of an annual subscription at TechSoup is $299, and the retail price of this same one-year subscription is $699. Mark your calendar now for May 16 and 17!
This work is published under a Creative Commons Attribution-NonCommercial-NoDerivs 4.0 International License.
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