GRANTS INTRO LESSON3

Lesson 3: What Funding Sources Look For

We saw in Lesson 2 that there are two basic sources of money, the Private Sector and the Public Sector. Now that you know where the money comes from, lets look at what the funding agencies are looking for.

What Foundations and Government Agencies Look for:

Severity of Need: You have to show that your community needs the program. This need must be more severe, in quantifiable terms, than the need of other communities competing for the funding. If you receive a grant, the funding agency is going to have to defend their decision to all the applicants that were denied. They do that in part by showing, with hard numbers, how you documented a greater need.

Shared Mission: Every funding agency and private foundation has a mission statement. For public sector agencies, this mission statement is often found in the enabling legislation that established the grant program. For private foundations, their charter often lays out what the goals of the organization. Does your grant help the funding agency further its goals? If yes, then you are in the running for a grant. If not, look for another source of money.

Consistency: Is your application logical from start to finish? Are there gaps where you have outlined a problem but given no solution?

Understanding of the Problem and Solution: Have you shown that you understand the problem that you have documented? Your application must outline a service method that addresses the problem that you have documented. The solution that you propose must be consistent with the currently accepted ideas or methods in your field. If you are using outdated terminology or techniques, your application will be quickly discounted.

Competence: In addition to your application, your organization will also be assessed. You must show that you are capable and effective. The funder will want to know that if you are given the money, you will carry the project to a successful completion. Many people submitting grant applications include a separate capability statement as an attachment to the application. This is a brief overview of your organization, the projects that you have undertaken and any awards or accreditations that you have received.

Cost Effectiveness: Your proposal must efficiently use the grant dollars that you are requesting. Many funders look for a low cost of "deliverables" from the applications that they award. For example, how much are you charging per student educated or housing unit rehabilitated? If you exceed the norms for your field, be prepared to explain why or you won’t be funded.

Accountability: In addition to looking for cost-effective proposals, funding agencies also look for applications that have detailed timetable with milestones clearly marked. If you are funded, they will want to measure your progress. These milestones will help the funding agency head off a potential problem. If you said you would begin evaluating clients for your new alcohol treatment program after three months, but have not even hired an intake person at that point, it might indicate that you have a troubled program. The funding agency may want to step in with some advice, closer monitoring, or, in the worse case, pull their grant.

Realistic Goals and Budget: As efficient and accountable as you are, you must also be realistic. Promise only what you can deliver. If you are awarded the grant, your application will become the basis for a contract with the funding agency. You will then be obligated to do whatever you proposed in your application.

You application must also be in line with what the agency typically awards. If their average grant is $5,000, your $200,000 request won’t to be considered favorably.

What Government Sources Look for (in addition to the above):

Public sector funders look for all of the above, but they also look for three more items.

Project Readiness: Are all of you approvals in place? Do you have all of your zoning, permits, and other legislative/bureaucratic approvals? Are all of your matching funds committed? Public sector funders want to see that they are the last dollars into the project, often requiring that you show that but for their money the project would not take place. The last thing a government agency wants is to award you a grant, have your project fall apart, and have to pull the award.

Leveraging Ratio: The leveraging ratio is the measure of dollars that you have from other sources to match with the grant dollars. For many government programs, the greater the money you bring in from other sources, the better your application looks.

Eligible Matches: Linked to the leveraging ratio is the concept of eligible matches. Not all dollars are created equal. The source of your matching funds is very important. Each program will have rules about what other sources of money counts towards your required match. For example, a federal program may require that all of your matching funds be from non-federal sources. Programs will also have rules about what counts as a donation, i.e. labor, real estate donations, equipment, in-kind contributions, etc. Remember, a local or state grant may actually be a "pass-through" of federal funds. In reviewing your matching dollars, these pass-through funds may be traced back to their original source. For example, if you receive a grant from your local City, but the City funds are from the U.S. Department of Housing and Urban Development (a federal program), your City grant may be considered to be federal dollars.

Now that you understand a little more about the terminology and types of grants, we will look at the three essential elements of successful grant writing: Needs Documentation, Resource Investigation, and the art and science of Grant Writing. Lesson 4 covers Needs Documentation.