Addicted to Grants

A few years ago, I interviewed with an organization that was opening a new community center in a part of town that had a very disparate population.  That section of Portland has a diverse mix of well to do professionals and families living in expensive high rise condominiums, as well as low income working poor and homeless.  The organization only had a couple of programs in place, and had not planned for more at that time.

During the conversation, I described how I would use a balanced approach of seeking individual support from those living in the condos, building partnerships with the local businesses, and seek foundational support to help get the organization’s programs off the ground.  The individual interviewing me told me that what they were looking for was someone who could fund the center entirely with grants.  When I tried to explain that grants are generally awarded by funders to start and support new programs but not to simply fund the daily operations of an organization, my words fell on deaf ears.  The interview ended shortly after that, and I was not hired for the position.

Unfortunately, I have come across many in the nonprofit sector, especially new organizations, that do not understand that grant funding is temporary in nature.  Too many feel that, now that they have their 501 (c) 3 designation, grant money will just pour in.  In my experience, it doesn’t work that way.

Funding organizations will provide a certain amount of support for a limited amount of time, but they expect to see positive results for their investment.  They expect to see the programs they support make an impact and want to see results, which is why they require annual reports from those organizations.  If they see success or at least progress, they may continue funding the program.  If they don’t, funding will not be renewed, and they will direct their investment to a more worthy candidate.  Their support is not meant to be a never-ending source of revenue.

Foundations also expect nonprofits to find ways to get sustainable funding support from other sources.  Grants are meant to be a hand up for organizations, not longstanding handouts.  Eventually those grants will end, and if you are relying on them for long term chunks of your annual budget, you may come to a rude awakening.  That is why it is so important to develop other revenue sources while you do have grant money coming in. 

You can apply to other foundations, but my advice is to diversify your revenue stream with other effective fundraising methods.  Build relationships with individuals and businesses, and cultivate them for greater stewardship.  Engage those who already support your organization, its mission, and its goals.  Be creative and innovative.

Don’t become addicted to grant money from one particular source.  Whether it comes from a foundation or the government, it will eventually go away, and you don’t want to be unprepared when it does.