Types Of Grants
General purpose or operating support grants
When a grantmaker gives your organization an operating grant, you can use it to support the general expenses of operating your organization, from a specific program to the heating bill. An operating grant means the funder supports your organization's overall mission and trusts you to make good use of the money.
Program or project support grants
Aside from general purpose or operating support grants, most other grants are some form of program or project support. In general, a project grant is given to support a specific, connected set of activities, with a beginning and an end, explicit objectives and a predetermined cost. When a funder gives a grant for a specific project, it is generally a restricted grant and must be used for that project.
In general, project grants are given to support projects related to the mission of the University receiving the money. There are dozens of kinds of project grants. Here are some of the most common:
Planning grants
If your organization is planning a major new program, you may need to spend a good deal of time and money just figuring out what it will look like. Before you can even write a proposal to fund the new effort, you may want to research the needs of your constituents, consult with experts in the field, or conduct other planning activities. A planning grant supports such initial project development work.
Seed money or start-up grants
A start-up grant helps a new organization or program in its first few years. The idea is to give the new effort a strong push forward, so it can devote its energy early on to setting up programs without worrying constantly about raising money. Such grants are often for more than one year, and frequently decrease in amount each year. For instance, a grant might be for $25,000 the first year, $15,000 the second year, and $7,000 the last year. The funder assumes that the new organization will begin to raise other funds to replace the decreasing start-up grant.
Management or technical assistance grants
Unlike most project grants, a technical assistance grant does not directly support the mission-related activities of the University. Instead, it supports the University's management or administration — its fund raising, marketing, financial management and so on. Such a grant might help hire a marketing consultant or pay the salary of a new fund-raiser position.
Facilities and equipment grants
Sometimes called "bricks-and-mortar" or capital grants, these grants help an organization buy some long-lasting physical asset — a building, computer or van, for instance. The applicant organization must make the case that the new acquisition will help it serve its clients better. Funders considering a request like this will not only be interested in the applicant's current activities and financial health, but will also ask about financial and program plans for the next several years. They want to be sure that, if they help an organization move into a permanent space, for example, the organization will have the resources to manage and maintain it. No funder wants to help pay for a new building, only to have it close in four years because it is too expensive for the University to maintain.
Endowment grants
Some nonprofit charities have set aside money that is invested and earns interest. The University spends only the interest and keeps the original sum (the principal) untouched. Such a fund is called an endowment and is commonly found within organizations with large physical plants, such as hospitals and colleges. Periodically, organizations launch fund raising efforts to start, or add to, an endowment. Like facilities and equipment grant proposals, endowment requests will prompt funders to ask hard questions about the long-term financial outlook of the applicant. The funder wants to be sure that its gift to an endowment will stay in the endowment earning interest, and not be drawn out of the endowment to meet annual operating costs.
Program-related investments (PRIs)
In addition to grants, the IRS allows foundations to make loans — called program-related investments (PRIs) — to nonprofits. PRIs must be for projects that would be eligible for grant support. They are usually made at low interest, or even no interest. Unlike grants, PRIs must be paid back to the grantmaker. PRIs are often made to charities involved in building projects.
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Researching Potential Funders
GO to the FUNDING RESOURCES PAGE for Specifics on Prospecting for Institutional Funders.
Analyze your program—and answer these questions with specifics, not generalities.
- What is the “problem”, “need” or “focus” that your program will address?
- What are the specific goals of your program or project?
- Who will benefit from your program?
- How will you achieve your goals?
- Why are you uniquely suited to address the need?
- How will your outcomes be measured or demonstrated?
- Decide what types of funding you want: public, private (foundation or corporate), etc. Understand the pros & cons of each type; i.e. public funding can be renewable, but can be subject to political winds—it can also have onerous application, legal and reporting requirements as well. Private funding is more flexible and can be creative, but is often not renewable and can also be subject to the whims and fluctuations of the times, i.e. witness the reduction of foundation endowments in the light of the stock market swings as well as the emphasis on relief giving after 9/11. The key to successful and sustainable fund raising is diversification of funding sources!
- For public funding: Use Grants.gov as your main starting point. Funding on a federal level is also announced through department web sites as well as through the Federal Register. State funding is normally publicized through web sites and RFP's. Local municipal funding is often released through an RFP, if it is a competitive process. Identify & bookmark those sources that are compatible with your project. Make it a point to visit the sites regularly. Most government agencies use a fairly standard RFP process, allowing you to research other, or older, RFP's to get an idea of what will be required. You can also sign up for email alerts. Check out http://www.nysl.nysed.gov/reference/grantsref.htm - the NYS Library's list of grant resources. There is no NYS site similar to Grants.gov, but try: http://www.gorr.state.ny.us/gorr/grants.htm a partial list to NYS grants available to local governments and non-profits. Generally, you will have to look for the agency you are interested in, i.e. NYS Dept. of Education, and follow their offerings.
For NYC funding you should start with a schematic of all the city agencies, http://www.nyc.gov/portal/index.jsp?front_door=true and research from there. For NYS, go to http://www.state.ny.us/ Other cities and states have similar access—always start with the official websites. Good luck!
- For private funding, start with the Foundation Center and its materials, i.e. FC Search. The use of multiple search criteria eliminates unsuitable funders and results in a listing of solid prospects. Searches can be done by fields of interest, geographic location, grant award size, board members and trustees amongst others. It allows the researcher to use fundamental search criteria and then review a smaller sample of results to determine where the true matches exist. Proceed to the web site of those you are interested in for a fuller review.
- When researching for potential funding sources the five basic criteria can be used as a litmus test:
- Mission
Does the funder support programs (not projects, see below!) similar to yours? The information will appear on a search query under their fields of interest. I also take the time to look up their recent funding history. Larger foundations will have this information appear on the index summary; it can also be located using the Guide Star system and examining the foundation's 990 tax return (the document required by the IRS from all non-profits—it gives not only financial information, but complete information on whom the organization has supported in that tax year). Just because a foundation says they will fund the arts or libraries, does not mean they have demonstrated a strong commitment to the issue. A quick look at their funding patterns will tell me if they are actively funding in the area.
- Program
Has the funder supported similar projects? Again, review funding history since fields of interest can be vague. If you need funding for a library automation program, you want to determine if a funder's "library program" support goes exclusively to after-school library programs for disadvantaged children and thus will not be a good match for you.
- Geography
Does the funder provide support in your area? Geographic area can be unrestricted or can range from a region of the country to a town. As a guideline, select those organizations that fund nationally and in your area (either NYS or NYC, or NJ if desired) The more localized the area, the better.
- Budget & Assets
Does the funder make awards consistent with the size of the project budget? What is its total annual giving? The size of its assets? An agency seeking funding for a $200,000 program needs to identify funders with the ability and willingness to make larger grants. Asking a funder that has never given over $5,000 for a $200,000 grant doesn't make sense. The program may need to be submitted to several funders at lower requests but the emphasis should be placed on identifying a few funders with the ability to support the project at higher amounts
- Relationships
Do you, your department chair, your board, your development director, your friends or contacts know anyone at the organization you want to approach? This will help open the door in the instance of ‘no unsolicited proposals' or even if full proposals are accepted—an LOI addressed to someone whom you or someone you know knows is always better than a cold call letter. Be wary of using contacts in government fund raising, however, as there are strict legal guidelines involved in competitive grant awards. If you have NO contacts, just use the giving contact named by the organization.
Once you have determined the funders you are interested in, create a written grid like the one attached at the end. You can vary the entries—allow space for your notes—and organize them in any way this makes sense to you—for example you can initially group by funder type, i.e. government, foundation, corporate, and then within that group by initial approach or deadline. You should, however, always include the following:
- Contact information, including web site, email, etc. Having it in one place will save time in the long run.
- Deadlines
- Initial approach, i.e. will they take an application, allow a full proposal immediately or need an initial approach by letter of interest?
- What aspect of your project (see budget, above) do you think is applicable to that funder, i.e. if you are funding a conference, is it best to approach them for honoraria, the whole conference or to print a report afterwards?
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The Grantseeking cycle: what steps do I follow in getting a grant?
- Before you start writing, be clear about what you want to accomplish. Draw up a long range plan that projects your goals on a timeline for at least three years, or whatever period makes sense in terms of your goal.
- Research potential funders thoroughly. Never ignore a funder's guidelines. Always try and match a funder with your project, i.e. how will funding you fulfill the funder's objectives? If possible, always find several potential funders from different sectors (public or private) that may meet your needs.
- If you can, preview successful applications whose projects are similar to yours
After you have identified potential funders:
- Develop a strategic plan-you will have three more phases in your effort:
Writing the proposal == 60% of your effort
Marketing == 30%
• make sure you and your organization will appeal to a funder
• personal contacts can be crucial to your success, so try and build relationships BEFORE you apply
Management == 10%
• be prepared to demonstrate that you and your organization have the management skills needed to succeed!
And, don't forget collaboration—between researchers, departments, institutions. Cooperative proposals are very attractive to funders. Try to get program officials to review a 3-5 page summary or Letter of Intent (LOI) first, to be sure that you are on the right track. NEVER UNDERESTIMATE THE IMPORTANCE OF THE LOI!
- Writing the proposal:
• Take your time, and be on time—if it's worth doing, it's worth doing right
• Read the instructions, especially for government grants. ALWAYS abide by formatting rules—proposals have been rejected for font-size or page restrictions!
• Ask for a reasonable amount of support—the budget is usually the first thing a funder looks at!
• Never lie, or promise what you aren't sure you can deliver.
• Get to the point
•avoid jargon, or overly complex sentences
• organize your writing—start each section with a strong sentence
• the key to a strong proposal is whether or not you can prove the likelihood that it will achieve its goals
• keep the overall presentation simple, even if you need to provide masses of supporting data, graphs, etc.
- Be prepared to follow up on your ask—and if you receive a decline, find out why as it will help you with future submissions.
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What Makes A Good Proposal?
THE PROPOSAL: Essential Elements for Success
Obviously, you will have read the funder's guidelines and taken them seriously!
- Statement of Need: Why is this project necessary?
• present facts and evidence that support the need for the project
• explain how the project will address the problem and how it differs from previous attempts to address the problem
• explain why and how you, your team, department or institution is the best to effectively address the problem
• who is going to benefit from this?
- Project Description
• identify the project's objectives in a specific and concrete manner; measurable outcomes in a specified time period
• how will the objectives be achieved? In what timeframe? Outline the order of events clearly.
• Staffing—who will do it and what are their qualifications?
• Evaluation plan—how will you know if you have succeeded or failed?
- Budget
• Divide your budget into personnel and non-personnel categories—do not forget items like fringe benefits or space requirements!
• Explain any unusual items
• Note indirect costs or administrative overhead—most government funders expect them, as do many private funders
• Make sure your math is correct!
• Make sure your budget realistically reflects the effort it will take to accomplish your goals
- Proof read, edit for content and narrative flow, or have someone else do it! Make sure that you include everything the funder asks for, such as audited financial statements, should be 501(c)3 letter, etc.
Your proposal should also include reference to the following:
- why should this project appeal to the funder—what do they get out of it?
- who else is buying into this ask—the institution (cost sharing) or other funders?
- how will the program go on when the funding period is over—how do you plan to sustain your effort?
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