Assessing Grant Readiness: Is Your Organization Prepared to Apply for Grants?
With the steps to prepare, you can apply for grants with confidence.
Emerging nonprofits are often eager to forge funding partnerships to bolster their operations. Recognizing that various grants are specifically designed to support their missions, they prioritize grant seeking as a critical early step. With innovative programs and fresh approaches ready to tackle complex challenges, their motivation runs high.
However, funders are focused on long-term sustainability in their investments. To secure funding, nonprofits need to clearly demonstrate their commitment to lasting impact through engaged stakeholders, well-defined budgets, and a strategic plan for growth and sustainability. If you find yourself asking, “Is my nonprofit ready to apply for grants?” consider working through the following questions to determine next steps.
Have you obtained 501(c)(3) status?
In most cases, having 501(c)(3) status designation from the IRS is a requirement for applying for grants, particularly from foundations and government agencies. This confirms that your organization is a tax-exempt nonproft, and shows funders that their donations are tax-deductible. While some grants may be available to organizations without this, particularly if you partner with a fiscal sponsor that has the designation, obtaining proof of 501(c)(3) status will be a crucial step for most in the process of preparing for grants.
Do you Have a Clear Mission and Vision?
A clear mission
Will light the way
to significant impact.
Mission can be likened to a map, as the following example from Feeding America demonstrates:
“Our mission is to feed America’s hungry through a nationwide network of member food banks and engage our country in the fight to end hunger.”
While their vision is the ultimate destination:
“Our vision is an America where no one is hungry.”
To create a mission statement that captures the essence of your work, remember that less is more. Aim for a memorable, concise statement that leaves a lasting impression and effectively conveys your unique contributions. What exactly do you do, and can you say it in 20 words or less? While you can revisit and refine it over time, developing a strong mission statement from the outset will enable you to communicate your organization’s intentions clearly and consistently.
A vision statement is also helpful to pin down, as it conveys your ultimate, over-arching goal. While your mission statement should serve as a snapshot of who you serve, what you aim to accomplish, and how you plan to do it, your vision statement will articulate the broader impact your mission supports. Separating these often brings clarity, but they may be combined gracefully in your website copy and other materials.
Do you have a Detailed and Transparent Website?
Having a professional website with clear, up-to-date information is highly important for establishing credibility and sharing your progress. Ensure that your site is secure, user-friendly, and easy to navigate, and that it reflects your organization in tone, design, and content. Presenting a clear opportunity for involvement is key. This could take the form of a dedicated page with volunteer registration and a prominent “donate” button, allowing visitors to easily contribute.
It’s considered best practice to include your Employer Identification Number (EIN) within the footer of your website. While some may hesitate to post this information, every nonprofit’s EIN is publicly available, and displaying this unique identifier prominently, allows funders and donors to easily confirm your legitimacy and perform quick and accurate research. You may also want to claim your Candid profile, and register with the Better Business Bureau or Charity Navigator. Each of these will provide options for badges and proof of certification that you can display on your website to further promote trust and transparency.
Is your Board of Directors Engaged?
By the time you apply for your first grant,
it's essential to have a well-established board of directors.
Your board will help shape the strategic vision necessary to advance your goals and guide the organization’s growth and development. An engaged board brings diverse skills, experiences, and perspectives that enhance decision-making and play a pivitol role in fundraising efforts. By leveraging their individual networks, board members can attract donors, resources, and advocate effectively for your organization. The grant application process will run smoothly when the grant writer can tap into the insights and unique perspectives of actively engaged board members as needed.
Can you Demonstrate Your Impact?
A grant application is your chance to showcase your organization’s impact and positive reputation within the community. Partnering with local nonprofits that align with your mission will strengthen your proposal. Funders seek evidence that your programs are making a measurable difference for those you serve. If you're seeking funding for a new program, emphasize the experience of those delivering the services and highlight similar successful initiatives.
Develop systems for gathering feedback through quantitative data, testimonials, and letters of support. Funders increasingly want to see that those you serve play an active role in program development and hold leadership positions. Consider the ways that you might shift from “doing for” to “doing with” and develop opportunities for those you serve to engage meaningfully in the decision-making and planning processes.
Are you Financially Prepared?
Before seeking grant funding, it's essential to secure adequate resources. Although it may seem counterintuitive, grant money is typically not your first financial support. You should have a track record of providing services and the necessary staff to execute the activities outlined in your proposal. Implementing a grant program is an investment in your organization’s long-term future, so an upfront financial commitment is crucial. For volunteer-run nonprofits, focusing efforts on raising community funds may be a viable strategy to support a contracted grant writer who can assist with applications.
From the outset, maintaining detailed and accurate financial records—including assets, liabilities, and expenses—will set you up for success. An organized accounting system is vital for tracking funds received. Funders will often review financial records first, so it’s essential that they are accurate and align with your narrative. Obtaining audited financial statements can be beneficial and is sometimes required by funders. Smaller nonprofits that find audits cost-prohibitive might consider a financial review by an independent auditor as an alternative.
Do you Have Clear Budgets Established?
Funders will request detailed budgets, including both your general operating budget and the specific budget for the program you’re seeking funding for. While some funders provide sample budgets and templates to assist in presenting this information, with formatting that may be required or optional, it's crucial to have your own systems in place first. Once you have a general template established, tailor it for each specific funding opportunity. Your program budget should clearly outline how the funds will be used and how this aligns with the funder guidelines. Focus on building a thorough and highly detailed budget before applying for grants, as this will guide every other aspect of your requests for funding.
Do you Have Community Support?
Strong community support is a vital to the full picture of grant readiness
Before pursuing grant funding, building a strong foundation of community support through individual donors, corporate sponsors, and volunteers is essential. Hosting tabling events, fundraising activities, and leveraging other opportunities for local engagement will build a base of dedicated supporters who are committed to your mission. Most funders look for evidence of robust local backing, including financial contributions, in-kind donations, and volunteer hours, when considering grant applications.
Do you have a Dedicated Grant Writer?
When you're ready to seek grants, it's important to designate who will manage the grant-seeking process. While some organizations opt to distribute this responsibility among staff, board members, and volunteers, this approach can lead to confusion and lack of focus. If you do choose this route, you may want to invest in training for your team to address any gaps, and build confidence in the process.
Investing in a dedicated staff grant writer or a contracted grant consultant can yield significant benefits in the long run. Consider whether you need a full-time staff grant writer, or would benefit more from contracted services– with the flexibility of hiring for a specific service or set duration of time. Keep in mind that the grant process doesn’t end with receiving an award. Building a positive relationship with your funder is essential, and this is achieved by carefully adhering to their expectations for grant reporting.
Do you Have All Necessary Documentation
As your organization gains grant readiness, you will need to gather all necessary supporting documentation. Maintaining a file of standard attachments will help you to stay organized and save you time each time you apply for a grant. You’ll want to have the most commonly requested financial documents ready.
These may include:
IRS 501(c)(3) Tax Exempt Letter
Most recent IRS Form 990
Audited Financial Statements
General Operating Budget
Current Program Budget
Current actual income and expenses
Balance Sheet (Statement of Financial Position)
Reach out to discover how professional grant writing services can support your nonprofit’s current goals.