Understanding grant cycles

Funding sources, even those run by the Federal government,  are not bottomless wells of money.  Case in point; the SBA has just announced it is out of money for FY 2015 for its 7a small business loan program.

One of the hardest concepts to get across to  new businesses and nonprofits is that you can only apply for funding when the money is made available.

A large part of my business consists of finding suitable funding matches for nonprofits and small businesses, but that's just the start.

Once a suitable candidate is located, the next step is to ascertain when and how they award funds.

Typically, foundations in particular derive the funds they award from earnings on investments.  Like most of us, they can't spend money until they have money.

That produces various cyclical open application periods.  For some foundations, that's annually, while others may have two to four open sessions per year.

Ideally, and assuming that there are suitable matches, a nonprofit should plan on having a mix of grantors to approach that award funds at different times of the year.

Of course, given the funding landscape, that isn't always possible so the next best strategy is to locate funding sources that award at the times when you most  need the money

That involves planning ahead.

For instance, a nonprofit that needs funds for back-to-school supplies might want to look for awards that pay out in the early summer. Since applications typically open from 30 to 90 days before the award, that means having a list of prospects that accept applications as early as mid winter.

It also means being ready to apply at that early date.  There's nothing more frustrating to a grant writer than getting a panicked call to apply for funding with an application close date a week or less out, and finding out the organization hasn't even worked up budget figures yet.

Understanding grant cycles is one of your most important management tools. Use it well and it is an asset, but ignore it and you are going to be in a perpetual state of financial panic.

Need funding leads?  Contact me for assistance

Happy New (giving) Year!

If you waited too long to maximize the holiday giving season, your appeal just isn't  generating enough funding, or grants are a significant part of your revenue planning, it's time to start your planning for next year.

If you're reading this you might be saying "Aaagh!!  I'm not up for another big campaign right now!"

You and your staff may still be in the middle of all the seasonal charity events, Twitter and Facebook campaigns, and endless envelope stuffing. Sleep might be the only thing on your wish list.

That's known as the post-Christmas burn-out effect. Since the holiday season is often the highest point in most organization's revenue cycle, it's natural to go all out at the end of the year.

That doesn't really matter to grantors. Grants  are awarded at set intervals, and they can take a very long time to produce funds.

A webpage on the site of the  W.M. Keck Foundation perfectly illustrates why you need to be transitioning into next year's grant planning NOW.

Notice that next December's awards are in the planning stages right now. Applications to be awarded June 2016 open up in July 2015. In other words, the grantor is planning a full year ahead. That means you should be too.

To compete effectively for grants you need to have a forward-looking plan, meaning that you should be defining your needs well in advance of needing the funds.

You can't wait until two weeks before an application is due to start planning for it. A perfect example of that can be found on a National Institutes of Health (NIH) webpage: 

http://www.niaid.nih.gov/researchfunding/grant/pages/timelinerev.aspx

If you clicked on the link, you might notice that the suggested lead time to preparing to submit the application for funding is two months, and the award review could take "…days, weeks, or months."

That assumes that you have all your data ducks in a row. Your budget is complete, your procedures are in order, and your actual or projected results are verified, or will be by the time you actually begin the application.

Only then should you start researching possible donor matches.

If you don't have good data at your fingertips, now would definitely be the time to compile and organize it.

Grant Planning- What is it and why should you do it?

Grant planning doesn't start with finding a grant. I get dozens of inquiries like this every year.

" We provide decorated  Christmas trees to low-income families. We need a grant to assist us in purchasing 100 trees. Please help us find grant money for this worthy cause" Rcvd. Nov. 1

Requests like this don't take into account the lead time needed to find a grantor, and certainly doesn't allow any time for the grantor to respond. Grant planning requires you to be proactive, not reactive.

Grant planning requires foresight

Grant planning begins at least one year from the time you need the money and it starts with refining your mission into a program or programs with a budget, and a specific, measurable goal. Here are some of the questions I asked this particular nonprofit.

How many trees do you need?  What is your budget?  Are there trees available at a price that will allow you to furnish 100 trees? Have you worked with vendors (tree farms, direct sellers, etc) to get a discount? Do you have a contract to provide the trees at a stated price? What size trees do you need? What about transportation, both to you and to the recipients? What species of tree do you want? Do you have alternatives? How do you qualify people to receive a tree? Can you store the trees, or do you need them very close to the distribution date? Who has supported this cause in the past?

Setting up a prospect calendar

Typically, foundations plan their giving cycles at annual, semi-annual or quarterly intervals. The application closing date for the grants might be as much as a year ahead of when the grant is awarded. That's why this is called grant planning, not grant getting.

After you have mapped out the when, where, how much and why for your appeal, it still has to fit into the grant calendar for the foundation. That means finding the prospective grantors well ahead of the opening date of the grant application or RFP date. Arrange your prospective targets in a format that allows you to sort by RFP opening date, closing date, amount available, and enter those into a working calendar or spreadsheet.

Qualify targets

If your targets are local, establish some sort of relationship with them ahead of time. Follow them on Facebook, or go to events they frequent. Find out who is on their board, and look for common associations with your board. Check to see if they have a prequalifying phase (an LOI or online qualifying protocol). Look at their previous giving patterns and assign a priority to the ones that are most likely to respond well. There is no sense in "shotgunning" your requests to any and all foundations that have only a very remote connection to your cause. That's expensive both in terms of time and money, and seldom results in an out-of-the-blue award.

If you need help designing a grant plan, drop me a line at granthelp@ida.net, or visit my website, http://www.cloudlancerwriting.com.