Is This Grant Worth Pursuing? 7 Signs It Is
Maybe you’re new to grant writing and pursuing grants, or you are looking to improve the process within your nonprofit. Perhaps you’re wondering, are grants worth it? You may have struggled with rejected applications or feeling like you are putting in too much time without enough return on investment.
In this article, we will provide some insight into whether or not grants are worth pursuing in general and help you understand how to evaluate if a particular grant is worth going after. Continue reading to learn why grants are worth the effort and how to balance your time and help make your organization successful.
First Things First: Are Grants Worth All the Effort?
When you are first learning how to write grants, it can be hard to weed through the wealth of grant writing advice out there and decide whether or not grants are a good source of revenue for your nonprofit. While finding, writing, and managing grants can seem daunting, grants can be a valuable source of funding for your organization.
There are over 87,000 grantmaking foundations and through Instrumentl’s database alone you can find thousands of active grants. You should also keep in mind that certain foundations have to donate a minimum of 5% of the average market value of their net investment assets.
While there are many grant opportunities out there, it is important to remember that grants should only make up a percentage of your revenue. Grant writing should not replace efforts to also secure donations and other forms of support. A successful nonprofit will have a variety of revenue sources to keep the organization healthy and not reliant on one revenue stream.
Having a clear strategic plan and goals matched to that plan will help your nonprofit stay focused on work that aligns with your mission. Mission-focused projects or programs are the types of work that grantmakers are interested in funding. Being able to explain to the grantmakers (within your application) that these projects align with your strategic plan will help make your grant pursuits more successful.
While it’s true that grants can be an important and promising revenue source, we also want you to keep in mind that pursuing grants takes time. Grant writing involves identifying prospective grants, determining which ones are right for your organization and your project, writing the application, and managing the grant if funds are received.
You need to understand the capacity of your organization so that you do not stretch yourself or your team too thin trying to write and receive grants. The remainder of this article will provide some signs to look for when evaluating grant prospects to help you decide if a certain grant is worth pursuing.
7 Signs to Help You Determine if a Grant is Worth Pursuing
If you are looking to answer the question of whether or not a grant is worth pursuing, check out these seven signs to look for when reviewing grant prospects. As with any grant writing advice, it is important to make this information fit the needs and abilities of your nonprofit.
1. Mission Alignment with Funder Priorities
We listed this sign first because we feel it is the most important in identifying whether a grant is worth pursuing. You need to decide if the priorities of the funder align with your mission. Most of us in the nonprofit world have heard the term “mission drift” and we do not want to be “stretching” our mission or drifting from our mission just to try to receive funding.
Your organization should have a project in mind that needs funding before you begin seeking grants. Having already decided on a project will help you avoid mission drift by trying to create work that fits a certain funding opportunity. That being said, it is also a good idea to keep an eye on various types of grants in case something new comes along that fits your needs.
You may be presented with a recommendation for a grant from a board member, staff member, or other close source and even these need to be evaluated to make sure they align with your mission. Once you have found a funder that matches well with your mission, there are still additional signs to consider that will help you determine if the funding opportunity is worth pursuing.
2. Previous Giving History
Another sign you can use to help evaluate grant prospects is to look at whether the grantmaker has previously funded organizations or work similar to your proposed project. Many funders will provide information about previously funded projects on their websites. Here is an example from GlaxoSmithKline of past grantees for their Ribbon of Hope Grant.
You can also use Instrumentl to research who has previously received funding from a grantmaker and see the type of organizations and work that have been funded. Below is a screenshot of this feature within Instrumentl.
If your potential grant aligns well with your mission and the grantmaker has funded similar nonprofits and/or similar projects, then the next factor to consider is the likelihood your individual application will be awarded funding.
3. How Competitive is the Process?
Because grant writing can be very time consuming, it is important to understand your chances of success. To do this, you will want to try to determine what percentage of applicants will receive awards. You will likely have to reach out to the funder directly to find out this information which can also help you start a conversation with them.
A good rule of thumb is to apply to grants where there is at least a 20% chance of your application being funded. To put this in perspective, if a grantmaker receives 100 applications, they would be awarding funds to at least 20 of these applicants.
The grant writing process can be very time intensive, so you want to allocate your resources to prospects that have a relatively high rate of success. Otherwise you may have to write 20 applications to 20 different grantmakers just to get one grant.
It may also be helpful to try and find out what percentage of the ask is usually funded. For example, if you apply for $100,000 are they going to only reward you $50,000? It may be difficult to find out this information, but it is worth a try.
You can use features like Instrumentl’s Past Grantees to uncover valuable information on a funder’s giving history.
4. Relationship with the Funder
Do you have a previous or current relationship with the funder? Many grantmakers are more likely to fund organizations that they already have a relationship with, especially if they have seen good outcomes from the work they have funded. Companies or foundations that have chosen to provide funding to support specific projects or organizations want to see a good return on their investment.
You also want to make sure that you have a good relationship with the funder, not just any relationship. If you have previously been awarded a grant from the funder, make sure you have completed all grantee requirements and received good feedback from any reports and other communications with the grantmaker.
5. Return on Investment
When seeking to answer the question, is this grant worth pursuing, you need to evaluate your return on investment. Grant writing and grant management takes time. It is important to weigh how much work will go into writing and managing the grant versus how much funding you may actually receive. It can be enticing to apply for many grants because they seem like “free money”, but they do require a fair amount of work.
One way to help determine if a grant is right for your organization is to make sure you understand how much time you and your staff will need to invest to write, receive, and manage the grant. You must decide if the amount of potential funding is worth the investment of your time and resources.
You do not want to apply for grants that will cost your nonprofit more than you will receive. You also have to weigh the return on investment compared to other grants, as your organization will likely apply for multiple grants every year.
6. Purpose of the Funds
When evaluating a potential grant, you will also want to determine whether the funding provided will be considered restricted or unrestricted. Many grants are project or program specific and are therefore tracked as restricted funds in your budget. These types of funds can only be used for expenses directly related to the specific project for which the grant was written.
Some grantmakers offer funding for general operating expenses which would be considered unrestricted funds within your budget. It is the dream of every grant writer to be able to receive a grant that can be considered unrestricted funds.
It is also important to make sure that you are not writing a grant for the sake of writing a grant. You want to identify a true need within your organization and then seek funding to help support that work.
When using Instrumentl, the high-level grant eligibility information will be available in the right-hand side of each opportunity in your Matches tab.
As you can see in the example below, the TD Bank Community Sponsorship is a grant focused on funding project or programs, for applicants of nonprofits or government entities.
7. Openness to Funding New Organizations
Another important consideration is whether or not the grantmaker is open to funding new organizations. Some funders are only interested in working with nonprofits that they have already established a relationship with. The type of organizations that a grantmaker will fund can also change year-to-year based on the availability of funds, so it is important to find out this information when researching grant prospects.
Instrumentl provides a feature that tells you whether a grantmaker is open to applications from new organizations. The screenshot below of this feature indicates what percentage of grants from a particular funder have gone to new grantees.
An easy way to ensure that you will not get funded is to apply as a new organization to a grantmaker that is not interested in funding new grantees.
Bonus Tips for When to Pursue and When Not to Pursue a Grant
Now you know seven signs to look for when deciding if a grant is worth going after. Here are three bonus grant writing tips to help you understand when you should or should not pursue a particular grant. These tips will help you focus your efforts.
1. Make sure your needs align with the typical grant amount
One key step in evaluating grant prospects is to determine the needs of your organization compared to available funding. You don’t want to apply to a foundation whose usual grant awards are $100,000 if you only need $10,000. You also do not want to ask for $250,000 from a grantmaker who typically awards grants of $5,000.
2. Do not create a project to receive a grant
Because grants are often project specific, it may be tempting to create a project to receive funding from a grantmaker. However, you need to seek funding to support work that you were already planning. If you end up adding work to the collective plate of your organization, you will likely struggle to complete the project well and could end up making a bad impression on the funder.
3. Evaluate the willingness of your team
We mentioned earlier that grant writing and grant management take time. Even if you have a project that you are interested in pursuing, it is important to make sure that your team is willing to put in the necessary investment. While you may be the one responsible for writing the grant, your team will be involved in implementing the project and will likely also assist with reporting requirements.
Your organization does not want to pursue a grant and receive funding and then have to fight pushback to enact the proposed project. Instrumentl provides a great grant RFP evaluation tool for free that can help you dig deeper into evaluating your grant prospect(s) so that you make sure to find a good fit for your organization.
Wrapping Things Up: Is This Grant Worth Pursuing?
We have walked you through whether or not grants are worth pursuing in general and provided some ways to analyze specific grant prospects. Hopefully you have learned some grant writing tips to help you evaluate which grants are a good fit for your nonprofit.
To maximize your grant writing efforts, you need to determine the best prospects and manage your time effectively. The most important steps that you can take are to make sure that you understand your nonprofit’s needs, seek funding for projects that are already within your strategic planning, find funders who align with your mission, and balance your return on investment.
There are many ways to answer the question of “Is this grant worth pursuing?”, but now you have a few key signs and grant writing tips to aid in your efforts.
Keep in mind that Instrumentl has many additional resources available on our blog to help you with your grant writing needs! To start your 14-day trial of our grant prospecting, tracking and management platform, click here.