Oct 18
Today is my birthday, so let’s talk about cake.
I am not a baker. Not a cake baker anyway. (I make some amazing homemade bread and bacon crumble cinnamon rolls from scratch!) But I love birthdays, especially as the mother of four really great kids. I want their cakes to be spectacular, but the cakes that I bake always fall flat. (Or weird-shaped and difficult to decorate.) So, I came up with a solution. When my kids decide on a party theme, I check out our local grocery store bakery to see which of their latest designs are compatible with our theme. Then, I buy the cake and enhance it with the perfect decorations to make their confectionary dreams come true.
My cake decorating magic is a great metaphor for grant funding, because one of the things I tell all nonprofit organizations interested in improving grant strategies is that grants are the icing – not the cake.
I have met with several individuals from nonprofit organizations with big dreams and even bigger hearts. They have identified a problem plaguing their communities, and they believe they have the solution. All they need is funding to truly make an impact. They have heard the myth that nonprofit organizations receive most of their funding from foundations, and that grants are “free money” and easy to secure, so they begin reaching out to consultants like me to learn the secrets to winning huge grant awards as quickly as possible.
Every (birthday) party has a pooper, and in this case, it is definitely me. The truth is, foundation grants represent only a small portion of the total amount of funding contributed to charitable organizations annually. According to the National Council of Nonprofits, 49% of nonprofit revenue is earned through private fees for service, 31.8% is earned from government grants/contracts, 8.7% is donated by individuals, 2.9 percent is donated by foundations (the grant awards we all have our sights on), 1.5% are donated through bequests, 0.9% are donated from corporations, and 5.2% come from other sources. As you can see, grant funding from foundations is a very small portion of total funding compared to other sources. Furthermore, securing grant funding isn’t necessarily easy, especially for organizations that are not grant ready. While there are strategies nonprofit organizations can implement that make the grant seeking and grant management processes more effective and efficient and extremely successful, the whole process from beginning to end is not easy, because there are several elements to successfully securing grant funding. I like to call this “grant readiness.” Grant readiness describes whether a nonprofit organization has the capacity to not only successfully apply for and receive new grants, but also to manage those grants appropriately.
One fundamental characteristic of grant ready organizations is diversification of revenue streams. Just as a cake requires several ingredients in just the right amounts to turn out right, nonprofit organizations need a variety of funding sources to truly sustain their work in the long-term. In the case of nonprofit fundraising, grant funding is truly the icing – not the cake. Funders want to see that your organization is sustainable, with a variety of supporters contributing resources to help you carry out your mission. Having the support of multiple funders demonstrates the credibility of your organization, and that support can be used as leverage that enables your organization to have a bigger impact. Typically, those sources include individual donors, the government, private foundations, and corporate sponsors. Earned income is another possibility (e.g., ticket sales for performing arts organizations).
Before you begin creating successful grant strategies for your organization, you need to create a fundraising plan that identifies a variety of realistic funding sources. Your unique fundraising plan should define clear goals, keep your team on track, ensure accountability, and help you raise more for your cause.
Once your written fundraising plan is established, you and your team will know the who, what, when, where, and how – and we can get baking!