Everything You Need to Know About Nonprofit Grant Readiness

So here you are, ready to take the exciting leap into the realm of grants to further your nonprofit’s impact in the community you love and serve.

With the added grant money you’ll be able to boost your programs, serve more people, and see your nonprofit grow.

But is your nonprofit ready for such an undertaking?

Nailing down those large dollar amounts can be financially rewarding when done correctly, but that doesn’t mean it’s all sunshine and rainbows.

In the world of grants…there’s a lot of work that goes on behind the scenes.

You don’t want to get stuck in the muck halfway through your application process only to find you didn’t have all the necessary data, information, and requirements needed for such an undertaking.

In order to set your nonprofit up for success and to start winning grants, the best thing you can do is create a grant-readiness checklist for your nonprofit to follow.

And since Serve Denton believes in helping nonprofits just like yours fully execute their missions, we’ve created a handy-dandy checklist just for you.

So let’s start with the basics:

Grant-Readiness…What does that actually mean?

Competitive grants are financial donations given to organizations typically by corporations, foundations, or government agencies. When awarded, they can provide considerable funding to your nonprofit.

However, a common misconception is that grants are just bags of free money up for grabs by any nonprofit. 

That’s simply untrue. 

Securing grants requires precision, intentionality, and strategy.

Grants are highly competitive, specific, and require scrupulous data both before and after the grant money is awarded.

There are nearly 2 million nonprofits actively operating in the United States, with about 100,000 of those being located in Texas alone. And out of all the grant applications submitted, only 10% are approved for funding.

That’s a steep competition.

So to make sure you’re not wasting your organization’s time and resources applying for grants where the odds aren’t in your favor, it’s essential your nonprofit is grant ready.

Ensuring grant-readiness means your nonprofit has measured capacity for these 4 essential pieces:

1. Research

   Grants don’t just swoop into your inbox – you’ve got to hunt them down and secure them. The hunt starts with understanding your organization’s mission and future goals and researching relevant grants. You can search grants using state, local, and online resources, but make sure you consider factors like grant type, target audience, type of service and/or cause, and geography.

2. Apply

   Once you’ve found appropriate grants that serve your organization’s mission and purpose, it’s time to submit that good-ole grant proposal. Oftentimes the grantmaker will require certain documents and stipulations in addition to the application you have to complete. In addition to including these requirements in your proposal, you’ll also need to include a driven narrative of why your nonprofit needs the support and a specific outline of how you’ll use the awarded funds. 

3. Win

   Once you’ve submitted your intricately woven proposal, your fate is now in the hands of the grantmaker. Upon reviewing your application, your proposal will either be denied or approved. If your application is indeed accepted, they will send the funds directly to your organization. Typically, the organization is required to sign a grant agreement binding the organization to the terms of the funding. Cha-ching!

4. Manage

   Just because you’ve been awarded grant money doesn’t mean you get a free pass to sit back and celebrate until the funds are depleted. Managing the grants you receive is arguably the most critical part of the process. Using each specific grant’s requirements, make sure you identify specific resources to create a tracking system that clearly documents the fund’s use. Remember you’ll have to report this later! Coordinate a team to assemble a comprehensive schedule for your grant, and be sure to report your progress internally at key intervals to stay on schedule.

Now that you have an overview of all that’s needed to successfully apply and win grants…

Here are the 20 Signs your Nonprofit is Grant-Ready 

(broken down by category for your convenience):

Organizationally:

1. You have secured 501(c)3 status

   Head over to the Secretary of State to determine the filing requirements for tax-exempt organizations. Once you’ve been incorporated, you can file for a federal 501(c)3 tax-exempt status through the IRS.

2. You have defined a clear mission statement

   If you want to win a grant, you have to have a mission statement that is both clear and realistic. Grantmakers will want to see the value and purpose your organization offers and your vision for bettering the community you serve.

3. You have assembled a diverse Board of Directors and community stakeholders

   Board members are vital to a nonprofit’s success. The Board of Directors serves as the leadership of your organization and have an integral part in your nonprofit's growth and fundraising. On the other end, having supportive community members who can speak to the impact your organization has on your specific area is critical when applying for grants. Keep in mind that your board members should be supporting your organization considering many foundations will ask what percentage of your board are donors to illustrate buy-in to your organization’s mission.

4. You have demonstrated credibility and competence

   If only 1 out of 10 grant applications is approved, it’s important that you convey your organization’s ability to implement and manage the grant better than competing nonprofits. Be prepared to include a brief narrative of your organization’s history which includes your reason for existing and the accomplishments you’ve achieved if requested.

5. You have formal and informal partnerships in the community

   Building various partnerships is a must when it comes to the overall success of your organization - whether you’re applying for grants or not. Build collaborative partnerships with other nonprofits, schools, educational institutions, local businesses, and government agencies to give your nonprofit that well-rounded structure that paves the way for more sustainable programs and services.

6. You have proven outcomes within the community

   Get specific. Grantmakers want to know how many people your organization served, what specific outcomes were achieved, and how much time and resources are being poured back into the community. Set up parameters to collect necessary data from past case studies or programs to ensure you have evidence of credibility before applying for a grant. Be sure to rack your numbers longitudinally.

   Programmatically:

7. Your programs are sustainable and already operating

   Bottom line is this – if your programs aren’t sustainable and operating fluidly, you’ll have no chance of winning grants. Instead, make sure your programs are created (and managed) to actually support your organization’s mission and vision and create concrete outlines for how those programs will be implemented to deliver services.

8. Your programs have specific objectives and key outcomes 

   Receiving grant money doesn’t mean your nonprofit gets a free bag of money to do whatever you want with it. Grants have very specific requirements regarding the funding provided and are oftentimes restrictive to a specific program or service. Make sure you have a clear description of each of your nonprofit’s programs, resources, and services you can measure.

9. Your programs have strong staffing

   An organization is only as strong as the people staffing it. Does your staff completely buy into your nonprofit’s mission? It’s important that both staff and volunteers are dedicated to advancing your organization’s vision and are well qualified/trained to do so.

10. Your programs produce reliable data

    If funders decide to approve your grant proposal, you can guarantee they will want to know the direct impact your services are having on the community you serve. Start by collecting data regarding the specific issues your community members face, and how your organization can offer sustainable solutions to those problems. Let funders see the big picture behind their investment in your organization.

11. Your program’s objectives are SMART

    SMART goals (first proposed by George T. Doran in the 1981 issue of Management Review) will help keep your organization on the path to success. Make sure you include these specific, measurable, achievable, realistic, and timely objectives in your proposals to help increase the probability of your application being approved.

    Financially:

12. You have a proven financial strategy

    It’s important to have diverse revenue streams in any well-developed fundraising strategy. Make sure your organization is varied in its incoming finances that include fundraising events, individual donors, community donations, earned income as well as grants.

13. You have a sustainable yearly budget

    Having a yearly budget that’s reviewed by your Board of Directors (both for your overall organization as well as individual programs) is a critical step when taking the plunge to apply for grants. Any grantmaker will want to see a history of responsibly managed funds as well as a transparent accounting system.

14. You have a system for tracking funds

    Tracking funds (including past, current, and pending funding) will help give an accurate snapshot of where your nonprofit is currently, and where you’re headed. Tracking these funds can be managed through something as simple as an Excel spreadsheet, or specific grant management software you can find online. Either way, make sure you’re keeping track of funding sources, dates, and money awarded.

15. You have an internal reporting team

    Before you even apply for grants, you need to make sure you have a qualified team internally that will manage the grant reporting process from start to finish. The last thing you want to do is wait until the last minute to gather data for reporting deadlines only to find you’ve been recording the wrong information.

You might also be asked to provide:

• 990 (Tax Return)

• Employer Identification  Number (EIN)

That’s a wrap… Ready, set, apply!

Don’t let all the logistics overwhelm you… although competitive, the process of applying for grants is an exciting time that can remarkably impact your nonprofit and throw your organization’s success over the goal line.

By intentionally evaluating your nonprofit’s grant-readiness, you can rest assured that you’re in the best position to successfully win and manage grants.