Non-profit organizations rely on grants and donations to survive. While some offer fee-for-service programs, the vast majority rely on foundation and government support for program continuation. Many seek grants for general operating support.
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Grants cover a variety of costs associated with a running a non-profit organization including salaries, overhead, programs, and even space-related expenses such as rent or capital improvements. Grants are particularly helpful when non-profits want to expanding service delivery. This can include the number of people served or the geographic area covered in the delivery.
In addition to foundation grants, non-profit organizations are eligible for state and federal grants. To receive public money, they must demonstrate fiscal soundness and appropriate accounting controls. This demonstrates to the funder they can successfully manage larger grants. State and federal government grants are primarily for program design and implementation. Nonprofit research organizations can apply for government research grants.
Non-profit organizations seek grants to cover operational costs as well as grants that support specific client needs. Before submitting a grant request, non-profit fundraising personnel must receive approval from their board of directors. The grant request becomes, in essence, a contractual agreement between the organization and the grantor. Because of this, the grantor wants to know that the board of directors accepts the responsibility of the grant contents. If the board is unaware of the grant request, the non-profit organization may have to return the grant.
In addition to board approval, the organization’s grant request must provide documentation that details the need for the grant. Goals and objectives must clearly relate to the activities to be undertaken with the grant funds. Upon completion of grants, non-profit organizations are required to submit final reports to funders. The report details how grant funds were used and the outcome of the project funded.
If a portion of the grant funds have not been used by the contractual end date, the foundation may require the organization to return the unused funds. Generally, a foundation will approve a written request for an extension if there is a good reason the funds have not been spent as required. This is common with grants that involve construction projects or other outside contractors.
An important component of all nonprofit grants is the evaluation. A well-designed evaluation plan can provide valuable feedback for the nonprofit as well as the grantor. Final reports are based on the evaluation and should include quantitative and qualitative results that the nonprofit can use for future grant requests.