How Foundations Work

How Foundations Work

Book review: Winning Foundation Grants by M. Teitel

I just finished reading a good book by Martin Teitel called "Winning Foundation Grants: A Foundation CEO Reveals The Secrets You Need to Know." If you are an experienced grant seeker, this is a valuable book. If you are brand new to grant seeking, you may not be able to follow along quite as well but will still benefit from the tips.

I don't want to violate his copyright or keep you from reading the book yourself but I did learn a few things I didn't know (even after years of writing grants). Some of these things are common sense but I had just never seriously reflected on them. Some gems include:

• Remember that foundation boards usually have at least one banker/accountant on them. During the discussion of your proposal, you can be sure they will flip to your budget and start checking your math. If you have an error, they will find it and it will be a GREAT excuse not to fund your organization.
• In your proposal, spend less time talking about the problem and more time talking about your solution. Don't drown the reader in "the abyss of negativity and despair."
• Don't ever call a potential funder at home (I know, I can't imagine that anyone would. But I guess they do.)
• If you plan to make an end-run around the foundation staff and talk directly to a board member you know, you will likely offend the staff member whose help you need in the future.

These are just a few of the hundreds of tips - some of them quite funny - that Teitel shares. 

The Long Road to Yes: Rejection is Part of the Journey

Fact: Babe Ruth had a 66% fail rate at bat. 

Yes, he failed most of the time. So...why isn't he considered a failure?

When he got a hit, there was a 25% chance of its being a homeroom and a 77% chance that a run would be batted in. That's why he is a legend.

Most grant seekers understand that a .342 batting average in baseball is pretty darn fantastic. But we forget to hold our own work to a similar standard.

Here's the hard truth: most grant proposals will be rejected - especially first-time submissions.

But Babe Ruth didn't walk away from the plate after the first strike - why should you?

Of course, it's still important to consider why the grant was rejected. When that dreaded, "We applaud your excellent and important work in our community, however..." letter comes, what should you do? Grieve a bit, of course. Eat chocolate. Say bad words. Cry, if that helps. Then move forward.

Here are some reasons, in my experience, why grants get rejected:

1. Wrong Funder - Most funders have a list of things they WON'T fund. If you ask for one of those, you will get rejected. Instead, you should find funders that have an expressed interest in funding a program like yours.
2. Poor Writing - a foundation manager once told me that 90% of the proposals they get are badly organized and don't communicate well. If your proposal confuses or bores its reader, it probably won't be funded.
3. No Relationship - you can't always develop a relationship with a funder but you should always try. They will be more open to your proposal if they already know you.
4. A Weak Program - it's hard to get funding for a program that isn't well organized, isn't reaching many people or isn't accomplishing its outcomes. Some programs duplicate other efforts in the community. You must ensure your programs are strong and fulfill a unique need. 
5. Not the Right Fit - I submitted (what I thought) was an outstanding application to a funder who had encouraged the proposal. Although they liked the proposal, the board decided (during their meeting) that they would focus giving on rural programs that year. Mine was urban. It happens.
6. A First Strike - Funders will often deny this but experience shows it's true: the first time you submit a proposal to a funder, it has a small chance of being funded (some say 1 in 6). The second time you submit to the funder, your chances increase tremendously. The third time, your chances are even higher. Unless you walked away after the first strike.
7. Not This Time - Sometimes your proposal is great, your relationship is great, your organization is doing everything right...but a funder just can't help this time around. 
8. Not Gonna Happen - If you've done everything else well and had three or more rejections from the same funder, it's probably time to move on. There will be other ballgames.

 For more information on grant seeking, visit my website at www.sharpshootercommunications.com.

Grant Seeking on Contingency - Why Not?

      At least once a month, I have a conversation that starts like this:
      "We are a small/poor/start-up nonprofit and we just don't have the funds to pay for grant seeking - but we really, really need grants! Can you write grants for us and we will pay you a percentage of what gets funded?"
     Attorneys often work on contingency. Salespeople usually work on commission. Why can't that same model apply to grant seekers?
     There are several good reasons why contingency grant seeking isn't a good idea:

• It is unethical. The Association of Fundraising Professionals (AFP), the American Grant Writers Association and other professional organizations require members agree to a set of ethics. Here's a direct quote from the AFP ethical standards:  "Members shall not accept compensation or enter into a contract that is based on a percentage of contributions; nor shall members accept finder’s fees or contingent fees." Other organizations have similar verbiage. A grant seeker willing to work outside the ethics of his/her professional is either IGNORANT of the ethical standards or willing to IGNORE them.  See more at  http://www.grantprofessionals.org/about/ethics.
• Funders won't pay the fees. If you present an honest budget in your grant proposal, you must list the "commission" to the grant writer. This will automatically disqualify you for many grants (especially government) and make your proposal less appealing to other funders. Funders want their funds to feed the hungry, house the homeless, save the planet, etc. They don't want to pay a grant writer - they consider that to be an administrative or general operating expense.
• It's not fair to you. Let's say I agree to seek grants for your organization for a 3% contingency fee. What will happen? If I spend 40 hours working on a million dollar federal grant, do you really want to pay me $30,000 for that work?
• It's not a good motivator. If my income were solely derived from successful grants, I would be tempted to do the following: Spend half my time seeking those million dollar grants and half my time seeking smaller grants that are more likely to be approved. While this would be a great strategy for my wallet, this is not a good mix of grantors for your organization. You need a variety of funding streams - large, medium and small grants. If I am only focused on the "big money" or the "easy money," you are not well served. 

     Despite all the ethical and logical reasons this is not a good idea, I often hear that there are grant seekers willing to work on a commission. My advice: if you meet one of them, run the other direction. Stick with a grant seeker who understands his/her profession and willing to work in an ethical manner.

Sweet Brown: The Best Story-Teller of 2012

Since last May, more than a million people have watched Oklahoma City's Sweet Brown tell the story of her narrow escape from a burning building. The first time a friend sent it to me, I must have watched it five times in a row.

Because I'm a total nerd (and because I studied such esoteric things in grad school), I wondered what exactly was so engaging about this video. Here's what I decided: Sweet Brown is, quite simply, a gifted story teller.

If you haven't seen Sweet Brown and can invest two minutes, click on the box below. You can stop after the first two minutes or keep watching for a mix-down of her statement (which will stick in your head all day).

Sure, her teenage son walking back and forth behind her is share-worthy itself. But pay attention to the elements of her story-telling:

• Her story had a beginning, a middle and an end.
• She was passionate about her subject!
• You were able to visualize her experience and understood what problem needed fixing.
• Her emotions evolved throughout the course of the story - from the mundane, to the confused, to the panicked and, finally, the relieved (and slightly exasperated). 
• She had a memorable hook: "Ain't nobody got time for that!"
• She did all this in about 90 seconds!

The next time you sit down to write, watch Sweet Brown again. Can you use some of those elements in your writing?  If you do, I'll bet your reader will enjoy it more!

My Favorite Myths

My Favorite Grant Seeking Myths
 

Myth: Foundations are just waiting to give me money!

The truth: Most foundations have far more grant requests than they can possibly fund.

Even with an excellent proposal, the competition for those dollars is stiff. There are more than a million other nonprofit agencies in the nation. Each believes that their funding priority is more important than yours.

Myth: Grants are the answer to all the organization’s financial needs.

The truth: Grants should be part of the “funding mix” for your organization.

Research indicates that private gifts (including foundation grants) provide 12-22% of total nonprofit funding. Therefore, it is unlikely that grant seeking will become your organization’s  first (or even second or third) largest source of income. However, 12-22% of your total bottom line is still a lot of money!

Myth: Grants are “free money!”

The truth: Grants are actually pretty expensive money.

One researcher estimates it takes one dollar to earn $10 in grants. Why so expensive? There is a cost associated with preparing to write a grant proposal, communicating with potential funders, writing and editing the actual proposal, and providing follow-up and required reports. When considering a funding source, measuring the amount of effort required for the grant is always important – sometimes a grant is just too expensive to consider.

Myth: If I hire a grant seeker, I won’t have to think about grants any more.

The truth: To be effective, you must be involved on a regular basis.

Even with a professional grant seeker helping, a member of the organization’s staff needs to invest at least one hour per grant proposal submitted. This time commitment includes contacting the funder, providing the grant seeker with information, reviewing and editing the grant, securing letters of support if needed, and even signing and mailing the actual proposal to the funder. Without your regular involvement, the process will not be effective.

Myth: Everyone knows we do great work – foundations will see that.

The truth: More than ever, foundations are demanding that you measure and communicate the short- and long-term outcomes of your programming in statistically viable ways.

If you tell a funder that you will feed and shelter 650 children this year, they are likely to respond with, “So what?” The number of programs you manage and the number of people you touch are NOT outcomes – they are simply activities. Funders have become very savvy – they want to know what kind of short- and long-term impact your activities have on those you serve and the community in general. If you are not effectively identifying and measuring your outcomes, your grant seeking results will suffer.