Private Grants: Are They For You?

By Laurence A. Pagnoni, MPA

Some nonprofits depend on grants. With few, if any, government contracts, sputtering special events, and limited individual donor support to lean on, they may have no choice. Others, sustaining themselves on fees; federal, state, and city money; and lavish galas are often lackadaisical about grants.Yet if they have the metrics, private and corporate grant awards can increase their revenue by multiple hundreds of thousands of dollars annually.

How can you tell if it’s worth your agency’s while to pursue a grants program?  Just do a feasibility test. The test includes research and analytical steps, and is easy to conduct. Here are the research steps:

  1.  Go to the Foundation Directory and do a reverse search on your own nonprofit. The information that surfaces may go back more than 10 years. You’re therefore likely to find a number of foundations that have made grants to your organization in the past but have not been contacted recently. The amount of the prior award(s) may be low because no one has asked the grant-maker(s) to give at a higher rate. You now have a list of lapsed funders. Check their Web sites for current deadlines and geographic and funding priorities. Note those that have remained aligned with your organization and its mission.
  1.  Let’s say your agency is a faith-based organization that operates shelter and addiction treatment services in Yonkers.  This gives you five categories to search for more prospective foundation supporters: grant-makers giving to your particular faith; shelter and housing funders; funders interested in substance abuse; funders based in Yonkers or giving to nonprofits that serve Yonkers; and, of course, human services.  Search under all of these categories.

A simple spreadsheet will prove useful for storing the information you surface.  All you really need are five columns, as follows:

Column 1 – Name of foundation

Column 2 – Suggested ask. Check the funder’s 990 and/or Web site and fill this column with your best guesstimate of the amount of money it might realistically award your nonprofit.

Column 3 – Probability of grant. We rate foundations on a scale ranging from high probability of securing a grant to medium, low, and speculative. “Speculative” means least likely.

Column 4 – Deadlines, if any.

Column 5 – Notes.  Notes may include peculiarities of the grant-making process (“Call first to discuss,” “Send LOI,” “Gives for human services in areas of company operations”); whether they make awards for GOS or equipment; or any other pertinent tidbit (“Primarily interested in alcoholism,” “Committed until 2016”).  Be sure to note how you found the prospect, so you can fish them up again later (“Roman Catholic funder,” “Based in Yonkers”).

  1.  The final research step involves a reverse search of one your keenest competitors. Select a thriving agency that provides similar services and see what turns up. Some new funding prospects for your organization will likely emerge.

Now add your lapsed funders to the spreadsheet and the foundations that have supported your competitor and are new to you. Carefully label them in the notes section as “lapsed” or “XYZ funder.”

The analytical process is purely a matter of common sense.  List the prospects that you’ve rated as highly likely to give or medium likely, and, next to each one, the suggested ask.  Add up the amount of money you estimate receiving.

Naturally, you’re not going to score with every potential funder. But what would 30% of the total look like? What amount of revenue would you secure if only 25% of the grant-makers on the final list actually made an award?

If you would come away with, say, $200,000 if only one-quarter of the funders on the final list approved a grant, can you really afford to dispense with this revenue?

We welcome your comments about this post on the LAPA blog.

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