In working for the Morrison County Historical Society, one thing we have heard many times over the years regarding funding is that we need to get grants. Usually this is said in a way that makes it sound like getting grants is akin to running to the store for a loaf of bread, as though grants are ubiquitous and easily available. How we wish this were true!
Grants, which may appear to be free money given to nonprofits by governments, foundations or corporations, have all kinds of stipulations that mitigate the notion of free. When an organization receives a grant, it cannot freely spend it on whatever it wants. It must spend the money on what was promised within the grant application.
Each entity that provides grants, be it government, foundation or corporation, sets the parameters for the types of grant projects it will fund. Some focus on education, some on the environment, and some on alleviating hunger, among many other possible causes. Many grant organizations also have a geographical region they service, which means that nonprofits outside the service area are not eligible.
It is not uncommon for a granting organization to require a match from the nonprofit applying for the grant. A match can be cash or in-kind. A cash match requirement means that the nonprofit has to pony up a particular amount of money for each grant dollar received. For example, if a grantor requires a 50% cash match for a $2,000 project, $1,000 will come from the grantor and $1,000 will come from the nonprofit. An in-kind match, also called a soft match, is any contribution toward a project that isn’t cash but that can be assigned a monetary value. This can include staff or volunteer time spent on a project or the donation of supplies or other services to a project.
As a general rule, grant organizations do not typically provide funding for general operating expenses. They don’t want to fund regular staff time, the electric bill, advertising or any other overhead expense. (When most people tell us to get a grant, this is what they assume the grant will cover.) Instead, most grant organizations want well-defined projects that fall within a specific time frame and they want to make sure a project is going to produce positive and measurable results for the investment they’ve made.
In order to be considered for a grant, a nonprofit must fill out an application. Each granting organization has its own application process, with some asking for more detail than others. (The federal government has particularly tricky applications, with any omissions or mistakes typically resulting in the rejection of an application.) The point of most applications is to provide the granting organization a full description of the intended project, an explanation about how it will be carried out and who will be working on it, as well as a detailed budget for the project.
Crafting a well-defined project that meets a granting organization’s criteria is no easy task. It takes great thought, time, and clear writing ability. That’s why so many large organizations hire grant writers.
Once the grant is submitted, it must go through a review process. There is so much competition for grant money that even if a grant is well written, it may be rejected because the grantor lacks the money to fund every applicant.
If a nonprofit is lucky enough to receive a grant, the project it promised to undertake in the application often must launch pronto in order to meet grant deadlines. During the course of the project, all expenses and time must be tracked for the final grant report. Extensive documentation of the project, including copies of every receipt and proof of measurable outcomes, will be required as part of the final grant report in an effort to show the grantor that the money was well spent.
After the final report is turned in, there is always a chance that the project could be audited. This happened to us once at the Morrison County Historical Society. We were the managers of a $3,000 federal grant for a women’s history project featuring two national historians. Our final report consisted of several packed folders of documentation that filled a file folder box. Even though the grant was small and the report very large and detailed, the federal government required us to undergo an audit.
Due to the time investment required and the many criteria that must be met, when a grant opportunity presents itself, we analyze it carefully to be sure we have a good chance of receiving a grant before expending energy on the grant process. Grants are great if an organization can get them, but there’s no guarantee of receiving them and they don’t allow for loafing (whether bread or otherwise).
This article originally appeared in the Morrison County Historical Society newsletter, Vol. 24, No. 4, 2011.