Grant Writing 101 – Why apply for grants?

Why seek grant funding?

In this week’s installment of my blog series “Grant Writing 101,” I want to expand upon why you should seek grant funding.

The answer seems obvious, right?

You’re seeking grant funding because you need money to pay your musicians, your dancers, for costumes, canvases and paint, brushes, basically anything you need to spend money on to make your art. Including yourself.

But there are other reasons to seek grant funding, presuming that you are eligible.

  • Industry approval:

Grant awards act like a badge of approval. Example: National Endowment for the Arts (NEA) grants are small, with an average grant size of $10,000. But the NEA stamp of approval is sought after and gives an air of legitimacy to your work/organization.

  • Planning:

To write a grant is to prepare a business plan that outlines everything involving the creation of your work or programs from the artistic concept to artistic creation to distribution, marketing, and audience.

  • Competition:

If you are successful, from a government agency or foundation, a grant can motivate other donors to give.

  • Diversifying income streams:

If you’ve been operating solely off of individual donations or earned income (sales), adding grant funding as a revenue stream will diversify your income and contribute to your financial stability.

Don’t confuse the “why” of seeking grant funding with the “why” your organization needs funds at all or the “why” society/your target audience needs your program. We’ll discuss the case statement/statement of need in an upcoming article.

Many people and organizations get so caught up in all the “whys” above that they forget about a just as important question:

When should I seek grant funding?

As you might know, many funders have hard deadlines to submit a grant application. However, that’s not what I’m referring to. The question can be better stated as “how do I know I or my organization is ready to seek grant funding?”

Many organizations who have just received their IRS determination letter contact me and want me to find grant funding that they can apply for to build their building, launch their summer camp, or support some other program. The problem is that they have no history, no track record, to show a funder that they can actually do what they say they’ll do or that their programs are based in any standard of excellence.

Furthermore, they want the grantor to fund the entire project. It’s rare that a funder funds more than 25% of a project. They expect and want to see that you have other revenue streams contributing to the project, which means the project or program is more sustainable. If you’re entirely dependent on one funder to keep a program going, then what happens when that funder decides to redirect funds to other programs or revise their mission and giving priorities?

If this sounds like you, you just got your IRS determination letter, you have no programming history, and no other support besides the particular funder you have identified, then, unless that funder is specifically funding young, small budget organizations, save yourself the time and resources of submitting that grant and instead run a fundraising campaign from amongst the individuals who know you and support you. Grassroots fundraising campaigns are a great way to build a base of support – and much easier these days using email and social media.

However, being a young and small organization does not mean you can’t find any grant opportunities. Many community foundations and city, county, or state arts councils will fund smaller organizations. There will still be eligibility requirements such as a minimum history of operations, usually around 3 years, and the grants will be capped at a percent of your budget. For example, if your annual budget is $10,000, you’ll likely be capped around a $2,000 grant, and the government grants usually all require a match. A match or matching funds are monies that you spend to equal the grant amount but come from another source. So, if the funder gives your $2,000 and requires a match, that means your budget must at least be $4,000, and you are required to match the funder’s $2,000 with $2,000 from another source – whether it be earned income like ticket sales or other contributions. Occasionally a small percent of your match can be from in-kind contributions. In-kind contributions are donations of products or services to your organizations, rather than cash.

Next week we’ll look at how to identify some prospective grant funders and how to tell if you’re, in fact, eligible for the opportunities you find.

As always, remember the first rule of fundraising: ASK!

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