The process of “getting funded” or “writing a grant proposal” can be terribly confusing, much like deciphering the mystery ingredients or measurements in a recipe left behind by your great-grandmother. For more than three decades, PEGI Foundation team members have been attempting to sort out this process. Much like Great-Grandma’s recipe, developing a complete grant proposal requires the ingredients and measurements be put together in a logical and understandable sequence using tried and true techniques.
Up front, anyone who hopes to find and secure funding for a project or program must first learn precisely what a grant is and is not. In most situations, a grant is financial support that is not required to be repaid. Typically, it comes in the form of money, but it may also be training, products, services, or technical assistance. Grants are most always awarded after the submission of a written proposal. A grant is not the written document that we submit to a potential funding source.
Each funding organization establishes their respective eligibility criteria for grant proposals, and these ingredients typically include:
- Nonprofit status, most often 501(c)(3) status under IRS rules and regulations (Exemption Requirements – 501(c)(3) Organizations)
- Proof that the applicant is strong and viable
- A compelling problem statement
- Most recent annual audit and/or 990 Tax Form
- Completed budget detail / budget narrative
- Letters of collaboration and/or support
- List of active Board Members
Each funding organization will also have its own unique application process, and the degree of detail required varies immensely. Below is a brief overview of the basic recipe for a successful grant proposal–understanding that some funders may require extra or special “ingredients”:
Tax-Exempt Status
To be tax-exempt under section 501(c)(3) of the Internal Revenue Code, an organization must be organized (be a corporation or unincorporated association, community chest, fund, or foundation) and operated exclusively for tax exempt purposes. None of its earnings may insure to any private shareholder or individual. Additionally, it may not be an action organization (it may not attempt to influence legislation as a substantial part of its activities and it may not participate in any campaign activity for or against political candidates). Organizations described in section 501(c)(3) are commonly referred to as charitable organizations.
Proof that Applicant is Strong and Viable
Funding organizations often look carefully at the applicant’s history, leadership, and track record. Applicants should offer factual and objective descriptions of the program’s accomplishments, including statistics and examples. The individual spearheading the project proposal should offer strong personal qualifications, highlighting achievements that will be most meaningful to the funder. For example, the applicant might “season” the proposal recipe with a quote from someone in the community who values the contributions of the proposed program or project. If the organization is fairly new and its track record somewhat brief, look to the background of the staff and board of directors to provide improved credibility, stressing community partnerships in order to build the funder’s confidence.
Compelling Problem Statement
This portion of a proposal may also be called a statement of need. A discussion of the problem to be addressed lays the foundation for the goals and evaluation measures, and if this statement is weak, the rest of the proposal will leave a foul taste in the reader’s mouth. A strong statement of the problem will address the following:
- Who is affected?
- In what ways are they affected and to what extent?
- Why is the problem significant?
- Why is the problem occurring?
As the applicant explores the problem and its causes, a helpful question to ask oneself is: how do we know all of this and or how can I prove it?
One final ingredient or additive to ponder: the program or project for which the organization is seeking financial assistance should not simply benefit the applicant organization but, rather, it should be about those you are proposing to serve (in other words, who does it benefit?).
Annual Audit v 990 Form
A charitable organization with annual contributions of $750,000 or more must file an audited financial statement prepared by an independent CPA. A charitable organization with annual contributions less than $750,000 and at least $250,000 must file a financial statement that is reviewed or audited by an independent CPA. All charitable organization are required to submit these audited financial statements, but those with gross annual income of $500,000 or less may meet the financial filing requirements by providing either an IRS Form 990, or a financial statement for the immediately preceding fiscal year. Don’t forget this vital ingredient, or the finished proposal may be rejected without review.
Budget Detail / Budget Narrative
Also known as a budget detail, budget description, or budget justification, the budget narrative explains the numbers in the applicant’s proposed line-item budget, and how the applicant arrived at them. The benefit of preparing a budget narrative is that it forces an applicant to examine every ingredient of the project or program, as well as how the applicant arrived at all costs.
Along with the budget, the budget narrative tells a funding organization exactly how the nonprofit applicant will spend its money, item by item. From a funder’s perspective, the budget narrative guarantees:
- research has been carefully completed and the project or program costs are reasonable and justified (all ingredients have been tested)
- the project or program is within the funder’s giving range and/or it includes a plan to seek additional funding
Letters of Collaboration or Support
There are five vital ingredients to include when writing letters of support:
- who is responsible for which activities
- background information on the letter signer’s / writer’s relationship to the project or program
- relevance of the project or program
- potential impact of the project or program
- in-kind involvement and/or monetary support from other organizations
These letters of support should be signed by those collaborating or participating in the proposed project or program. In this particular instance, there can never be too many cooks in the kitchen.
List of Active Board Members
A board is defined as “the governing body of a nonprofit,” and must be comprised of at least three members (check with your state to find your minimum). Individuals who sit on the board are generally responsible for overseeing the organization’s plans and activities. Board members should meet periodically to discuss and vote on the ongoing affairs of the organization. At a minimum, one meeting must occur at least once annually with all board members present. Board membership is the primary ingredient that binds the entire recipe together. In providing information about the applicant’s board to a potential funder, each member should be listed by name, position and/or responsibility, address, contact (telephone and/or email), and a general description of that person’s background. In essence, this provides a mechanism for a funder to contact each member, to either verify authenticity or discuss the proposal.
Remember, a grant proposal should never be fast food, prepackaged, or reheated leftovers. It requires careful thought and planning, making absolute certain that no ingredients have been forgotten. The more closely an applicant follows the recipe, the greater the likelihood that the product will be successful – not just in obtaining funding, but in making a difference in the lives of community members. And that is truly the purpose of cooking up a proposal in the first place