How to Include an Additional Funding Plan in a Nonprofit Grant Application - dummies

How to Include an Additional Funding Plan in a Nonprofit Grant Application

By Stan Hutton, Frances Phillips

Willingness to cover the full cost of a nonprofit project varies from foundation to foundation and agency to agency. Some like to “own” a project and have their name strongly associated with it; therefore, they may be willing to cover full costs. Many like to be one of several supporters so the nonprofit isn’t entirely dependent on them.

Between many foundations’ reluctance to pay for 100 percent of a project’s costs and their preference for offering short-term project support, if you seek a grant for a new project, you want to know how you can cover the balance of the costs in the present and all the costs when the initial project grants have been spent. Foundations reviewing your grant proposals want to know the same information.

Your sustainability plan — addressing these needs for additional and future funding — should be clear and reasonable. Because a nonprofit can’t assume it will receive every grant for which it applies, a foundation understands if a nonprofit has applied for more grant funding than the full cost of the program.

If a nonprofit lists another foundation as a possible source of income for a project, it doesn’t necessarily have to have received that grant, but the prospect should be plausible. The size of the grant should be appropriate to others awarded by the agency, and the focus of the foundation should be aligned with the project request.

When listing sources of potential funding, note whether the funding is proposed (application has been submitted), committed (proposal has been accepted but funds have not been received), or received (money is in hand). Funders like to have a general idea of where you are in the fundraising process.

Foundation staff members talk with colleagues at other foundations. Never lie about having submitted a proposal or having received a grant from another foundation. That lie can undermine your request (and future requests, too)!

Generally, foundations hope to see nonprofit organizations growing less dependent on grants over time and are happy to see proposals projecting future increases in earned revenue or individual contributions. Here are some possible sustaining sources you may describe in your proposal:

  • A government contract to continue a valuable service after it has been developed and tested

  • The sale of publications, recordings, or services based on the project

  • A membership drive

  • A major donor campaign

Some proposals don’t need to address these concerns. They seek support for projects that begin and end in short periods of time. For example, a grant proposal may support the publication of a study of an agency’s work. After the agency edits, designs, and posts the report on its website, future funding isn’t needed.

For other projects, future funding is very important. For example, you wouldn’t want to start a recreation center for low-income youths and have to close it after a few years. The lack of program continuity can have a negative effect on clients.