Nonprofit Grant Readiness Guide 2023 [+Checklist Template]
New and small nonprofits are often eager to start applying for grants. But securing those large dollar amounts comes with a good deal of work.
Creating your organization’s grant readiness checklist is the first step towards winning a grant. The process is competitive, but with these proven steps, you will take off running in getting your nonprofit grant ready.
In this article, we’ll answer what it means to be grant ready, signs to watch out for when it comes to your readiness, as well as give you a grant readiness checklist to work with by the end.
Let’s dig in.
What Does It Mean to Be Grant Ready?
Grants can offer substantial and meaningful funding for your organization. To some newer organizations, grants may look like large stacks of free money. But this is definitely not true. Winning a grant is not like winning the lottery; you must be strategic and deliberate when applying for grants.
The first step of this process requires that you must first review your organization’s grant readiness. Grant readiness is a measurement of your organization’s capacity to research, apply, win, and manage grant applications successfully.
Winning a grant is not easy; on average, the odds of receiving a grant is between 10 - 20%. Often, organizations are unsuccessful in obtaining the grant award because they practice episode grant seeking, fishing for funds through intermittent series of desperate gambles.
To ensure that you are not simply gambling your time and resources in applying to grants, you want first to consider these proven strategies for getting grant ready.
How Do You Get Grant Ready? Common Signs to Watch Out For
Organizational Signs Your Nonprofit is Grant Ready
Ensuring that you have a solid organizational foundation is the first step in getting your nonprofit grant ready. Grant-ready organizations should:
Have been incorporated with Articles of Incorporation and received tax-exempt 501(c)3 status. Determine which agency in your state, often the Secretary of State, that regulates the formation of corporations and look at the filing requirements for tax-exempt organizations. After being incorporated, you can then file for federal 501(c)3 tax exempt status through the Internal Revenue Service (IRS).
Have a clearly defined mission statement. A mission statement that is unique, clear, and realistic is crucial to securing a grant. Funders want to see the value of your organization and its vision for impacting the community.
Have an invested and diverse Board of Directors, along with key community stakeholders. Board members serve as the leadership of the organization and should be engaged in organizational growth and fundraising. Beyond your board, having your community's support can also help when applying for grants, particularly when it comes to speaking on the impact of your nonprofit in your area.
Demonstrate organizational credibility and competency. A successful grant application must convince the funders that your organization has the proper expertise and staff to implement the grant better than any other nonprofit. You should have a concise description of the organization's history as well as its reason for existing, its community, impact, and accomplishments. A professional staff dedicated to the overall mission and vision of the organization is equally important.
Be established in the community with both formal and informal partnerships. Partnerships with educational institutions, businesses, government agencies, school districts, faith-based organizations, or other nonprofits allow you to serve the community more effectively. Not only does resource sharing between collaborative partners allow for more sustainable programs and services, sometimes it’s even required for grant opportunities. If you're looking for how to build partnerships for your nonprofit, check out our workshop with Maryn Boess on partnership.
Measured outcomes in impact on your community. When measuring outcomes, it's important to be able to speak on outputs such as how many people were served, or how much time was given back to the community. Clear outputs bolster the prior point on credibility and competency. If you do not have these, you may want to first collect data or write case studies on your past initiatives before applying for your first grant.
Programmatic Signs Your Nonprofit May Be Grant Ready
Too often, nonprofits find a grant opportunity and then rush to design a program that meets the specific requirements and scope of the funder’s priorities. This leads to a stressful and chaotic scramble to prepare a proposal that will likely not be successful.
To be fully ready to submit an award-winning grant, an organization should:
Have strong and sustained programs that are already operating. Getting grant ready requires that you first ensure your current programs are running successfully and sustainably. If you are looking for funds to develop new programs, you should have concrete plans in place for the implementation and delivery of services. New programs should be made in compliance with the organization’s mission and values, not just to meet funding requirements.
Have a concise description of programs or services that includes goals and objectives, activities, and any key outcomes since if you've already implemented the program or service. The majority of grant opportunities available will be restricted to serve a specific type of program or set of services. To apply, you should have a clear and concise description of your current or proposed program/service and all of the key staff members, resources, and evaluative measures involved. Check out how Marlene Meyerson JCC Manhattan was able to quickly start researching relevant grant opportunities on Instrumentl because they had clearly defined programs and services.
Have strong organization capacity. Staff should be sufficiently qualified for serving your clients and be dedicated to furthering the organization’s overall mission.
Maintain reliable data demonstrating a specific need within the community that comes from the last three years. As of 2020, there are over 1.6 million registered nonprofits in the United States. Funders will want to know the direct impact you have within the community and what they would be investing in by awarding your organization to continue that work. It is essential to collect accurate information about the community you serve, the issues they face, and the positive change you wish to see.
Lastly, you should carefully review your organization’s financial situation. All funders will be interested in where their dollars will be spent and how it will be handled. As such, many grant applications will require proof of your organization's fiscal capacity to handle new funds.
Financial signs of your grant readiness include:
Have a strong financial strategy with appropriate tracking measures in place. Having a well-developed fundraising strategy with diverse streams of funds—including earned income, grants, individual donations, and different fundraising activities—is key to grant readiness.
Most recent overall organization budget and individual program budgets. Budgets should be developed and reviewed annually by the Board of Directors. Your organization must show a history of responsibly managing awarded dollars and a transparent accounting system that tracks expenses separately for different funding sources.
An accurate list of past, current, and pending funding. Depending on the size of your organization, you may want to consider creating an Excel Sheet or using grant management software to manage various funding sources, the amounts awarded, and the dates of funding. This is important when giving an accurate picture of where your nonprofit currently finds itself at, and where it is headed.
Have adequate internal support when it comes to reporting. It needs to be known before you apply for grants who will be involved in the grant reporting process. Having proper administrative and accounting bandwidth within your team makes the tail end of the grant lifecycle much more manageable.
A recent tax return (990). For many funding opportunities, a 990 Form is all that is required. But some grants may ask for recent audits that should be conducted by an external auditor.
Click to find the best grants for your nonprofit from 12,000+ active opportunities.
Grant Readiness Checklist: The Ultimate List of 10 Questions to Answer
Still not sure if you’re ready to start applying for grants? The following 10-question grant readiness checklist should help you find out.
The following list is a quick overview of the questions that we will cover in more detail below.
Have you conducted thorough research to identify potential grant opportunities?
Are you eligible?
Do you have a clear purpose and vision?
Do you have impactful programs and good standing in the community?
Do you have a track record of successfully implementing programs with measurable objectives and outcomes?
Do you have adequate resources and infrastructure?
Can you demonstrate the sustainability of your project beyond the grant funding cycle?
Are your finances in order?
Do you have a detailed and realistic budget?
Is your proposal well-written and persuasive?
1. Have you conducted thorough research to identify potential grant opportunities?
Your time is valuable, so you don’t want to waste it chasing down grant opportunities that you aren’t qualified for or that don’t align with your mission. Instead, you need to take the time to research and identify potential nonprofit funding opportunities that work for you and your organization.
Sample questions you can ask yourself are:
Is there a specific project I am looking to fund? What are the criteria?
Are there specific characteristics about my organization (ie. women-run, BIPOC-focused, first-generation, etc.) that could qualify us for unique funding opportunities?
Do I have any contacts or mutual connections at organizations providing funding?
The more targeted you can be in your search from the beginning, the more time you’ll save in the long run. You’ll be able to invest your limited resources in the right spaces, increasing your odds of landing a grant.
2. Are you eligible?
Many grants have specific requirements to determine your organization’s eligibility to apply for funds.
Assuming that your organization has already been incorporated, the first step to becoming grant ready will be securing your organization’s 501(c)3 tax-exempt letter. These letters can be requested from the IRS for all public nonprofits with registered 501(c)3 status.
If you do not have a current 501(c)3 status, you may be able to consider partnering with another organization who is and who can serve as your fiscal sponsor.
You may also be asked for:
EIN (Employer Identification Number)
If you are applying for federal grants, you will have to register at grants.gov and sam.gov and a DUNS number (Data Universal Numbering System)
Additional requirements may be spelled out in the RFP (Request for Proposal) or RFA (Request for Application).
3. Do you have a clear purpose and vision?
Funders are looking for organizations that are unique and do not duplicate similar services in their particular area. Your mission statement should clearly outline your specific strategy of addressing an issue in your community and stand out among other organizations working towards similar goals.
Not only should your purpose be clear in your organization, but you should also ensure that your mission is realistic and accomplishable.
For example, Tutoring Chicago’s mission statement is to deliver the power of education through one-to-one tutoring for economically disadvantaged children.
It’s clear that their strategy to address the issue of access for education is through a one-to-one tutoring model.
4. Do you have impactful programs and good standing in the community?
Like your mission statement, your organization must have innovative programs that can demonstrate a measurable difference for those served. All nonprofits should conduct regular analysis of program impacts and staff successes that is verifiable through hard data.
It is also important that your programs maintain a good reputation for service delivery and assisting clients with their needs. Another way to highlight your organization to funders is through letters of support from community leaders and partners.
Continuing on the Tutoring Chicago example, they further explain their programs on page 3 of their 2019-2020 Annual Report, detailing their SMART, LIT and 7th Grade Programs.
From these descriptions, it’s abundantly clear the community impact on children that Tutoring Chicago’s different programs have on the students they serve.
5. Do you have measurable objectives and outcomes?
Funders want to award grants to organizations that are making a real difference, and measuring your outcomes is a great way to show that you can do just that.
All nonprofits should conduct regular analyses of program impacts that are verifiable through hard data. Measuring your impact will also help others see that you’re able to execute the plans you lay out during your grant application process.
Make sure that you have measurable objectives and outcomes in place so that you can identify if your projects are successful. Maybe you want to increase literacy test scores by 20 percent year over year. Or perhaps you want to provide 100 new laptops to a school.
Evaluating your programs and collecting data from them will help you demonstrate your organization’s impact and value.
6. Do you have adequate resources and infrastructure?
These include both physical and nonphysical resources. Does your organization have adequate facilities, transportation, and financial resources to sustain current operations?
How about financial tracking abilities or a donor management system, updated software, and computer systems?
Are staff appropriately supported with sufficient capacity for your current clients? Are there efficient operating systems in place and an enthusiastic base of volunteers to help your organization?
Here are a few tips about how you can be more efficient if you think you have opportunities to improve. Having all of this in place can improve your grant readiness.
7. Can you demonstrate the sustainability of your project beyond the grant funding cycle?
Grants help make a lot of great work possible, but they should not be the only source of funding in your organization.
Many funders want to see that your projects are sustainable beyond the grant funding cycle, so you will want to make sure you can sustain the program even after the grant funding has been used in full.
You should have diversified revenue streams, including donations, sponsorships, partnerships, and more to help sustain your efforts. Having multiple sources of revenue is a huge sign of nonprofit grant readiness to potential funders.
Grant funders love seeing long-term financial stability, knowing their impact will live on.
8. Are your finances in order?
Before accepting a new influx of funds, you first must ensure that your current finances are stable. You should have diverse revenue streams that are tracked accurately across your organization’s various programs and services. If you’re expecting your nonprofit to grow, and grow quickly, you want to ensure appropriate financial management systems are in place beforehand.
Continuing on the example of Tutoring Chicago, you can see how page 4 of their Annual Report shows a diverse set of revenue streams ranging from public and private grants to events and individual donors.
Their report also details assets and liabilities, as well as expenses for the organization.
9. Do you have a detailed and realistic budget?
As part of the grant application process, you will need to set a budget in place for your project. In most cases, it will be a requirement so the funder can ensure they know how you plan to use their resources.
As you work through your budget, be as specific and detailed as possible. Include all the things you will need like resources, staffing, technology, and even office or operating spaces to make the project happen. The goal is to be specific, realistic, and transparent in your ask based on a clear budget.
Organizations want to see where their money is going, and after you land the grant, you will need to report on where the funds went. Funders understand that the unexpected happens, but having a budget in place serves as a guidepost to help you stay focused with your limited resources.
10. Is your proposal well-written and persuasive?
Now that you have all the pieces in place, you need to take a step back and look at your proposal as a whole. Is it well-written and persuasive? Did you articulate your case well, particularly why you need funding and why that organization should give it to you? Is it free from typos and errors?
A winning grant takes time. It’s not in your best interest to rush the process. Your proposal needs to tell your story, so be sure to write it well and meet all the application requirements.
If you don’t know where to start, check out our grant writing resources. In the next section, we’ll share a grant checklist template to help you create a well-written and effective proposal.
If you still need some help getting grant ready before you write your first proposal, you should check out this workshop with Chermain Jennings, CEO of a consulting firm. It’s all about the importance of being ready, gathering all your appropriate documentation to increase your competitiveness, and how to fill any gaps so you can put your best foot forward on your application.
Grant Checklist Template to Stay on Track
Now that you know 10 of the top questions to ask yourself to assess nonprofit grant readiness, here’s a quick grant checklist template to help you stay on track with your proposal.
These are just the most common elements of a grant proposal, so you’ll want to review each individual grant application carefully and just use this template as a starting guide.
This should be a clear and concise overview of your grant application, summarizing your project and what you are asking for. You will get into the full details in the complete application, so make sure to keep your proposal summary short and informational. It can include:
Goals and objectives
This should give the reviewers a picture of your organization and its history. This will help funders get a sense of who you are and what you stand for and if they want to partner with you. Include things like your mission, vision, values, and descriptions of who you serve.
This section should be the most robust, so make sure it is detailed and clearly articulated. It should include the following information, but remember to check against the application requirements to ensure that you meet them.
Goals, objectives, and outcomes
Plans on how you plan to achieve them, methodology, and evaluation criteria so you can measure their success.
Needs assessment to highlight the why of your project. Include statistics, endorsements, and other specific details.
Your budget should outline the funding you need and provide a detailed explanation of how you will spend that funding. This matters to funders as they want to ensure your program is realistic and you’ve thought through all you need to bring it to life.
Other funding (grants, partnerships) you are receiving to enable this program.
This section should include the other random documents and information that may not fit elsewhere in the application but are important nonetheless.
Verification of tax-exempt status (IRS determination letter), certificate of incorporation, and bylaws (if applicable).
Governance, including officers and Board of Directors
Financial statements (taxes, current budget, funding sources, etc.)
References and endorsements
As you work through your proposal, you can use a grant writing calendar to help stay on track with your deadlines.
You will also likely be applying to multiple grants each year, so the more areas you can save time in, the better.
Matt Hugg, the CEO at NonprofitCourses, suggests compiling information like your organization’s background, mission, vision, values, and even your financials in one place since they will almost always be required in a grant application. In his grant readiness workshop, he explains: “Being able to nail this down quickly and efficiently is going to be a huge help because it's just going to save you time so you can get to the core of what you want to do for your proposal.”
Wrapping Things Up: Is Your Nonprofit Grant Ready?
The competitive world of grants can be intimidating, but it’s also exciting and can significantly impact your organization. By honestly evaluating your organization's grant readiness, you can ensure that you are in the best position to successfully win a grant.
And although grant writing is not easy, there are plenty of helpful resources online to help you start securing funds for your organization.
If you’re looking to start finding good fit funders for your nonprofit, try Instrumentl free for 14-days. Instrumentl’s unique matching algorithm will only show you active open grant opportunities that your nonprofit can apply for so you can start winning more grant funding.
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