Unit 1: Nonprofit Organizations and Grant Funding
In this unit, we examine the role of nonprofit organizations since they are primary recipients of grant funding in the United States and around the world. These organizations leverage the grant funds they receive to carry out projects that support their mission. We also consider some resources that outline the grant funding application process.
Completing this unit should take you approximately 1 hour.
Upon successful completion of this unit, you will be able to:
- describe the key characteristics of nonprofit organizations with respect to their sources of revenue and types of activity;
- explain how grant funding supports nonprofit organizations; and
- distinguish between the steps of project mapping, finding, and applying for funding in the grant application process.
1.1: What is a Nonprofit Organization?
Nonprofit, not-for-profit, and nongovernmental organizations (NGOs) provide services to parts of the community that governments are unwilling or unable to serve. Nonprofit organizations advocate on behalf of a cause and serve as interest groups, charities, and service organizations.
In exchange for not paying taxes in the United States, nonprofit organizations must use the revenue they generate to support their organization or mission, have a board of directors to oversee their operations, and file an annual report to the Internal Revenue Service (IRS). Most nonprofit organizations rely on various revenue streams to sustain themselves. Many rely on grant funding.
Read this section to learn about the roles and purposes of nonprofit organizations.
1.2: How Grant Funding Supports Organizations
Government agencies, corporations, foundations, and trusts award grants to help organizations fund specific projects they will administer. These grant-funded projects are often awarded on a competitive basis, for a fixed time period, to support the causes or programs that the sponsor and grant recipient share. In other words, the grantor and the grantee form a partnership during the grant period to work together to further their shared missions and goals.
For example, grant funding provides educational opportunities, library services, technology support, and healthcare training to community members who live in the grant recipient's service area. Grant funding supports planning and implementing projects, scientific research, disease prevention, music and the arts, and countless other services to communities across the country and around the world. Some government agencies, corporations, foundations, and charitable trusts award grants to nonprofit organizations that will in turn administer a competitive grant program to their constituents.
1.3: Planning Your Approach – The Grant Application Process
Grant administrators advise you to follow several steps when pursuing grant funding. First, map out the scope and direction for your project in response to your constituent community's needs. Let your passion for your project, and the parameters and scope of your activities, drive your grant-funding request, rather than let the funding agency determine your needs and goals. Your passion should help you create your best, most persuasive case for your proposal.
Next, you need to find a funding organization whose scope and mission align with your project's goals. How will you create a partnership with your funding body? You may need to make some adjustments to respond to their goals in addition to your own. In other words, you need to create a strategy that works for both partners. Choosing the right funding body is important.
To help you start assembling the puzzle pieces, this checklist will help you think about your project and prepare to write the grant proposal. The steps run roughly in chronological order. We will review these elements in more detail throughout this course.
- What will your project's results be? When you develop your idea for a proposal or project, chart three direct results of putting your program in place. Go down an additional level and look at three more results for each of your first three branches. This tree diagram will help you determine any intended and unintended consequences of your program or project.
- How does your project relate to your mission? Your organization's mission must drive your efforts to obtain the money you will receive from grant funds. If the proposal you present or the grant funding you receive does not help you better serve your cause, why are you doing it?
- How are you leveraging your resources for the project and the proposal? Leveraging resources will provide the key to success, whether it means building on relationships that relate to past successful efforts, using the know-how in your organization or community, or combining public or private funding to create new opportunities/resources.
- What will be the return on your grant writing investment? Compare the size of the grant you could receive with the amount of effort it will require to produce and implement your grant proposal. In other words, is pursuing funding for this project really worthwhile?
- How can you justify a "brick and mortar" project? If your project involves constructing an actual "brick and mortar" building, explain in your proposal how members of your community and other beneficiaries will use the facility, and/or what activities will take place there. This will enable you to respond to funders who say they never give money to "brick and mortar" projects.
- Have you considered all the details of the RFP? Read the RFP guidelines extremely carefully to determine whether your project aligns with the funding agency's requirements.
- Is your problem statement as strong as it can be? When writing problem statements, make sure you present convincing evidence of the need for your project. Consider your project from the perspective of how it addresses a problem in your community. Your grant readers need to perceive your project as providing the best possible and most realistic solution to a problem.
- Do you have good support letters? Support letters need to show tangible and specific support, such as concrete steps that will further your proposal's goals.
- How compelling is your abstract? Remember that your abstract is the first impression grant reviewers will get of your project, so you need to prepare, write, and revise it with great care.
- What is your plan for a lasting relationship? The importance of building lasting relationships with your grant funders and other partners cannot be overstated. Never forget that they gifted you!
The last step in the process is to apply for funding, which most likely involves writing a grant proposal. Read this article for an overview of the grant proposal process and a sample budget from the perspective of academic research. Your approach will often depend on the requirements the grant-funding agency has outlined in its request for proposals (RFP).
Read this description of types of grant proposals to help determine how to approach your search for grant funding. The article also offers a useful overview of the typical sections of grant proposals.