ArtsAutosBooksBusinessEducationEntertainmentFamilyFashionFoodGamesGenderHealthHolidaysHomeHubPagesPersonal FinancePetsPoliticsReligionSportsTechnologyTravel

10 Fatal Mistakes Non-profits Make When Applying for Private Grants

Updated on July 18, 2016

A former non-profit executive and former chief staff officer of a family foundation, I have been on both sides of the line. I've been the requester and on the team of the giver. While grant-making will remain competitive as public dollars are more scarce and individual fundraising events continue to over-crowd social calendars, avoiding these critical mistakes will improve the chances your non-profit will secure private funding.

1. Know Your Philanthropy

No foundation is the same. Community, corporate or family, each has a set of governing documents and guiding principles they are expected to follow when making grants. These documents and principles might limit the geographic area in which a grant can be made. Some foundations have a single focus, like education, or a short list of current priorities. Many foundations require a vote of the board of directors, while others need only the blessing of a specific a individual. Most foundations do not accept grant applications year around and a growing number do not accept unsolicited requests. Maybe most important is an understanding of the culture of the foundation. For example, how and when was it founded? What was it's original purpose? How many people are on staff and what are their jobs? Does the foundation avoid publicity or is their grant-making well documented? What kinds of grants do they prefer to make -- bricks and mortar, programmatic or operating? Do they typically expect a match from the grantee or will a match likely not be required?

The bottom line is to know all you can BEFORE making application. Much of the information can be found via a Google search or on the foundation website. Some foundations provide brochures and printed materials to prospective grantees. Through resources like Guidestar, research the foundation's tax return known as a 990, which will provide some information about recent grants made. Then contact those grantees and ask them about the process. This may seem counterintuitive since their non-profits are competing with yours. However, most foundations will not make an immediate second grant to an organization with an existing grant, so for the time period of their award they are not your competition. Finally, speak to someone on the foundation's staff, if they have a staff. The program director or program officer is usually the go-to person, but the executive assistant or receptionist can be helpful too.

2. Follow the Process To the Letter

If you have applied for a federal grant, you know that the slightest mistake can often disqualify your application. While most private foundations are not as stringent in their review, they do have a process and expect it to be followed. As elementary as this sounds, I can attest to hours of my time and the time of staff being utilized to collect information from grantees that should have been provided in the first place. No matter how well your non-profit is known or what relationship you may have had in the past with the foundation, respect the process even if it seems cumbersome or unnecessary. Usually there are good reasons for the process that may involve Board dictates or internal workflow. So, if the application is to be completed online, don't send hard copies. If you are requested to send three years of financials, do not send 2 or 5, send 3. If the application asks for a detailed project budget, general categories or estimates will not suffice -- be specific. And whatever you do, if an IRS determination letter verifying you are tax exempt is required and you have not received that letter from the IRS, do not apply. In the event there is a legitimate reason you cannot provide all of the information requested, don't "wing it." Call foundation staff and ask how they would like you to address the situation.

3. Don't Ask for Too Much

The number one question I received from non-profit leaders when working for a foundation was "How much should I ask for?" Some would come right out and ask the question, others would beat around the bush, but it was obvious what they wanted to know. Most foundations will not tell you anything. Others might provide a range or a top end number. When deciding what to ask for refer to mistake #1. What is the range of gifts given by the foundation? What is the average for a particular year? Are there any circumstances that might impact that average such as a weak stock market or a new initiative launched by the foundation. Most importantly, know how much you really need to succeed with the program for which you are requesting a grant. Make your decision based on the combination of what you need versus the giving history of the foundation.

4. Don't Ask for Too Little

Again, do your research on the foundation or philanthropy and know how much you really need. Then factor in this principle from my days as a candidate for public office. If you ask a person who can you a $1,000 to give you $100, you will get $100 every time. The same general rule applies with foundations. You may need $1,000,0000, but because of lack of research or fear only ask for $25,000. You're likely to get $25,000, which makes the foundation staff and leadership feel great they were able help, but you're still $975,000 short and can't go back to the same "well."

5. Be Able to Explain the Finances

Most non-profits are struggling and the philanthropic community in general understands that. It is not unusual for the profit and loss statement to show a deficit, but it is vital that you understand why you are in the "red" and that you can clearly and honestly explain it. If you are consistently operating in the "red," it may be time to rethink your non-profit's business model, rather than applying for a grant. If you occasionally cross into losing territory, then point to the specific reasons why and not what steps you will take, but what steps you have already taken to avoid future deficits., Then relate your financial ills to the grant request and articulate how the program or project will enhance your financial position and will be sustainable beyond the grant terms.

Knowing the finances also applies to the project budget. Your budget should be as detailed as possible with a legitimate basis for the projected costs. Before presenting that budget, be sure it is vetted by your program manager and your finance team. Don't inflate the budget to justify a larger request and don't squeeze it to look frugal. The former will be hard to explain and appear dishonest when reporting on program implementation and the latter will ensure the program is underfunded and fails. Show how the grant dollars will be applied to the budget and how you will sustain the project when the grant is no longer available to you.


Bill and Melinda Gates

Source

6. Ask Based on Data and Best Practices

Generally, philanthropy that has been in existence for many years or that has a large endowment did not reach that milestone by being risky. In many cases, the foundation is also averse to being first in or the "Lone Ranger." When possible demonstrate that your program or project has been a proven success in other communities or has been adopted as "Best Practice" by a governing body or advocacy group. For example, if the project addresses domestic violence, then a nod from the Office of Violence Against Women would lend instant credibility.

But what about new and innovative ideas? I'm a believer that there is "nothing new under the Sun" so it is likely someone, somewhere has tried you initiative or a variation of it, though it may not be a best practice. This is where you need to demonstrate through data and your non-profit's history that a need exists, that you have success establishing new programs and certain aspects of your program have been shown to help those you intend to serve. While foundations may do extensive research on grant proposals, most staffers are not experts, so utilize community experts to support your position and be an expert yourself.

7. Don't Fail to Get Buy-In from Your Board

As a non-profit, you have some system of governance, usually a board of directors. Even if you are a chief staff officer with wide-latitude from a relatively disengaged board, be certain that they support and understand the grant request. No matter how many hats you may wear at your non-profit, the board has fiduciary responsibility. When a foundation is preparing to write a big check, they typically want to know that the board is aware of and responsible for how the funds will be spent. I once sat in an interview with a prospective grantee where the chief staff officer led the presentation of the request and answered virtually all the questions. The board chair sat politely and never uttered a word until someone simply asked, "Is the board excited about this new program?" The board chaired answered, "We haven't discussed it, but I'm sure everyone will be supportive." Crashed and burned.

8. Don't Try to Fit the Square Peg in the Round Hole

Let's face it, many non-profits who do great work are desperate for funding. In the toughest times, some will try to stretch from their mission or comfort zone to fit into a request for proposal or initiative of interest to the philanthropy. The worst offender is the non-profit that doesn't just "mission creep" but leaps into a new arena. If your mission is pre-k education, you are probably not equipped to address substance abuse among teens. Don't do it. You likely won't get funded and you will damage your credibility. If by a miracle you are funded, there is a good chance you will fail thus hurting your organization and most importantly the clients you attempted to serve. The other common mistake, is trying to show disingenuous interest in the foundation's interests. If your focus is childhood literacy, inserting language about arts and music and their impact on literacy will be seen for what it is -- a suck up. It is fine to mention art and music if that is a key component of your proposal, a best practice or you plan to utilize it in a significant way.

9. Don't Stretch the Truth in Progress Reports

Most philanthropies require some level of reporting or site visit to determine if their investment in your program was worthwhile. At the time you receive the grant, be certain you understand all the requirements and deadlines and like with the application follow the process. Do not be late and provide all that is requested. Most importantly, be honest and sincere about your successes and failures. Do not "sugar coat" your reports and then have the foundation learn at the end of the grant the program failed. This is the surest way to not receive funding in the future. I have never seen a funded program be implemented exactly as it was proposed. There will be unexpected problems and delays in almost every situation. Be honest about those and then tell the funder what you are already doing to correct the issues. If your grant is multi-year, scrutinize your program thoroughly and if it is not working, be willing to give back what hasn't been spent. You will gain credibility and enhance your chances of being funded for other programs in the future.

10. Be Grateful

Obvious, right? Not as much as you might think. I recall a multi-million dollar request from an organization. For a variety of fair and thoughtful reasons, the Board of Directors voted to give several hundred thousand. When I called the non-profit to relay the "good news," the response was shocking. The person on the other end paused and said, "Ok. Thanks." The very next call I made was to an entity that had requested $25,000 and received the full amount. The director was like a kid at Christmas, excited, relieved and on the verge of tears. He couldn't stop thanking me. Remember that foundations and funders in the private sector did not build their endowments through government funds. You and your organization are not entitled and there are thousands of worthy causes that would love to have what you received. For all you know, you may have been the largest gift awarded that day or competing against many large requests. Show genuine gratitude and move on with your plan to raise the balance of funds.

Top Private Foundations By Assets source: FoundationCenter.org

Rank
Name/(state)
Assets
As of
1
Bill & Melinda Gates Foundation (WA)
$44,320,862,806
12/31/2014
2
Ford Foundation (NY)
12,400,460,000
12/31/2014
3
J. Paul Getty Trust (CA)
11,982,862,131
6/30/2014
4
The Robert Wood Johnson Foundation (NJ)
10,501,370,521
12/31/2014
5
Lilly Endowment Inc. (IN)
9,995,102,248
12/31/2014
6
The William and Flora Hewlett Foundation (CA)
9,042,503,000
12/31/2014
7
W. K. Kellogg Foundation (MI)
8,621,183,526
8/31/2014
8
The David and Lucile Packard Foundation (CA)
7,084,903,284
12/31/2014
9
Gordon and Betty Moore Foundation (CA)
6,559,384,939
12/31/2014
10
Bloomberg Philanthropies (NY)
6,550,282,874
12/31/2014
11
Silicon Valley Community Foundation (CA)
6,529,547,000
12/31/2014
12
The John D. and Catherine T. MacArthur Foundation (IL)
6,469,167,430
12/31/2014
13
The Andrew W. Mellon Foundation (NY)
6,427,525,490
12/31/2014
14
The Leona M. and Harry B. Helmsley Charitable Trust (NY)
5,444,213,685
3/31/2014
15
Foundation to Promote Open Society (NY)
4,986,868,744
12/31/2014
16
The Rockefeller Foundation (NY)
4,237,699,395
12/31/2014
17
Tulsa Community Foundation (OK)
4,015,187,000
12/31/2013
18
The California Endowment (CA)
3,668,459,217
3/31/2014
19
The Kresge Foundation (MI)
3,666,563,884
12/31/2014
20
The Duke Endowment (NC)
3,433,155,852
12/31/2014
21
Carnegie Corporation of New York (NY)
3,332,078,461
9/30/2014
22
John Templeton Foundation (PA)
3,231,688,757
12/31/2014
23
Robert W. Woodruff Foundation, Inc. (GA)
3,151,919,995
12/31/2014
24
The JPB Foundation (NY)
3,137,329,946
12/31/2014
25
The Susan Thompson Buffett Foundation (NE)
3,112,058,893
12/31/2014
26
Margaret A. Cargill Foundation (MN)
3,050,646,349
12/31/2014
27
The Annie E. Casey Foundation (MD)
3,014,750,153
12/31/2014
28
Charles Stewart Mott Foundation (MI)
2,798,215,005
12/31/2014
29
Walton Family Foundation, Inc. (AR)
2,757,142,372
12/31/2014
30
Conrad N. Hilton Foundation (CA)
2,576,376,157
12/31/2014
31
The New York Community Trust (NY)
2,570,966,941
12/31/2014
32
Shelby Cullom Davis Charitable Fund (DE)
2,474,768,453
12/31/2014
33
Greater Kansas City Community Foundation (MO)
2,401,067,229
12/31/2014
34
Kimbell Art Foundation (TX)
2,382,583,028
12/31/2013
35
Richard King Mellon Foundation (PA)
2,365,151,629
12/31/2014
36
Simons Foundation (NY)
2,337,165,679
12/31/2014
37
The William Penn Foundation (PA)
2,332,928,903
12/31/2014
38
Charles and Lynn Schusterman Family Foundation (OK)
2,298,194,123
12/31/2014
39
The Chicago Community Trust (IL)
2,290,734,371
9/30/2014
40
John S. and James L. Knight Foundation (FL)
2,285,378
12/31/2014
41
The McKnight Foundation (MN)
2,262,928,471
12/31/2014
42
Casey Family Programs (WA)
2,241,900,641
12/31/2013
43
The Wyss Foundation (DC)
2,219,796,142
12/31/2014
44
The Cleveland Foundation (OH)
2,185,366,489
12/31/2014
45
Ewing Marion Kauffman Foundation (MO)
2,143,464,000
12/31/2014
46
The Harry and Jeanette Weinberg Foundation, Inc. (MD)
2,127,938,700
2/28/2014
47
The James Irvine Foundation (CA)
2,080,342,364
12/31/2014
48
Eli & Edythe Broad Foundation (CA)
1,941,410,735
12/31/2014
49
Alfred P. Sloan Foundation (NY)
1,875,962,450
12/31/2014
50
The Columbus Foundation and Affiliated Organizations (OH)
1,826,938,801
12/31/2014
51
Doris Duke Charitable Foundation (NY)
1,796,851,122
12/31/2014
52
Laura and John Arnold Foundation (TX)
1,766,641,213
12/31/2014
53
Houston Endowment Inc. (TX)
1,742,374,990
12/31/2014
54
The Oregon Community Foundation (OR)
1,740,988,217
12/31/2014
55
Annenberg Foundation (CA)
1,663,095,893
12/31/2014
56
Foundation For The Carolinas (NC)
1,663,081,207
12/31/2014
57
Barr Foundation (MA)
1,625,950,954
12/31/2014
58
The Heinz Endowments (PA)
1,620,611,867
12/31/2014
59
Marin Community Foundation (CA)
1,612,345,126
6/30/2015
60
Open Society Institute (NY)
1,590,570,302
12/31/2013
61
The Moody Foundation (TX)
1,547,141,408
12/31/2014
62
The Wallace Foundation (NY)
1,522,257,273
12/31/2014
63
Diana Davis Spencer Foundation (MD)
1,479,615,995
12/31/2014
64
Joseph B. Whitehead Foundation (GA)
1,460,271,454
12/31/2014
65
California Community Foundation (CA)
1,457,110,000
6/30/2015
66
Daniels Fund (CO)
1,391,728,128
12/31/2014
67
The Carl Victor Page Memorial Foundation (CA)
1,375,564,797
12/31/2014
68
The Starr Foundation (NY)
1,357,175,937
12/31/2014
69
The San Francisco Foundation (CA)
1,327,899,000
6/30/2014
70
The Brown Foundation, Inc. (TX)
1,303,245,651
6/30/2015
71
Lumina Foundation (IN)
1,265,931,444
12/31/2014
72
The Samuel Roberts Noble Foundation, Inc. (OK)
1,247,618,554
12/31/2014
73
W. M. Keck Foundation (CA)
1,234,432,000
12/31/2014
74
The Pittsburgh Foundation (PA)
1,158,788,711
12/31/2014
75
Bat Hanadiv Foundation No. 3 (NY)
1,140,750,668
12/31/2014
76
Cummings Foundation, Inc. (MA)
1,139,171,640
12/31/2014
77
The Ahmanson Foundation (CA)
1,133,890,662
10/31/2014
78
George Lucas Family Foundation (CA)
1,128,455,107
12/31/2014
79
The Broad Art Foundation (CA)
1,128,389,149
12/31/2014
80
The Anschutz Foundation (CO)
1,126,706,872
11/30/2013
81
Druckenmiller Foundation (NY)
1,124,511,100
11/30/2014
82
Shimon ben Joseph Foundation (CA)
1,123,283,923
12/31/2014
83
S & G Foundation, Inc. (NY)
1,100,776,701
6/30/2014
84
Communities Foundation of Texas, Inc. (TX)
1,066,775,000
6/30/2014
85
M. J. Murdock Charitable Trust (WA)
1,064,269,499
12/31/2014
86
Surdna Foundation, Inc. (NY)
1,037,047,874
6/30/2014
87
The Edna McConnell Clark Foundation (NY)
1,017,293,964
9/30/2014
88
Omaha Community Foundation (NE)
937,538,509
12/31/2014
89
Boston Foundation, Inc. (MA)
1,003,694,000
6/30/2014
90
The Brin Wojcicki Foundation (CA)
966,787,465
12/31/2014
91
The Joyce Foundation (IL)
951,465,616
12/31/2014
92
Otto Bremer Trust (MN)
945,257,043
12/31/2014
93
The California Wellness Foundation (CA)
941,083,728
12/31/2014
94
Hartford Foundation for Public Giving (CT)
934,212,141
12/31/2014
95
The Community Foundation for Greater Atlanta (GA)
933,303,043
12/31/2014
96
Bush Foundation (MN)
922,592,754
12/31/2014
97
The J. E. and L. E. Mabee Foundation, Inc. (OK)
909,117,622
8/31/2015

Comments

    0 of 8192 characters used
    Post Comment

    No comments yet.