Answers to the Most Commonly Asked Questions We Receive about Grants

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December 21, 2020

Each month, we receive a significant number of emails with questions about how to obtain grant funding and where to look for funding, as well as more specific questions about securing grants for particular types of projects. While there are always a few questions that require tailored answers, most of the questions we receive fall into a handful of categories.

In hopes of helping many of you find answers to your most pressing questions, we have compiled the three most frequently asked questions below. In answering your top questions, we’ve tried to address key concepts and provide suggestions for finding what you are seeking on our website and those of other organizations providing nonprofit resources.

TOP THREE QUESTIONS WE RECEIVE ABOUT GRANT FUNDING

#1: Can You Send Me Your Proposal Guidelines so I Can Apply for a Grant?

The top question we get asked is, “How does an organization apply for a grant from Peak Proposals?” The answer is that Peak Proposals is not a grant-making organization. We are not a funder and do not provide grants or cash donations to organizations or partner with organizations or businesses. We state this in different places on our website, but the confusion persists. We’ve noticed that other websites that cover content similar to Peak Proposals also appear to deal with this same issue, despite also indicating that they are not a funder. We’re not sure why this phenomenon is happening. Our guess is that some people may think that if a website addresses issues related to grant funding, it must be a funder. However, this is not always the case.

So, how can you tell whether an organization provides grant funding? In addition to seeing how the website or organization presents itself, part of it is in the name.

Key Concept: What’s in a Name?

In the United States, organizations established to award grants are usually called “foundations.” A foundation can be led by a family (family foundation) or a corporation (corporate foundation or corporate social responsibility program). It is unusual in the United States for an organization that depends entirely on grant money and donations for its survival to call itself a “foundation.” One exception or variation to this is foundations that almost exclusively use their own assets to fund their grant program but also accept (and sometimes actively solicit) cash donations, which they use to complement the funds generated from the foundation’s investments.

Foundations Are Not All Alike

Another exception to the rule that foundations give out grant funding is the case of a not-for-profit institution, such as a hospital, that has an affiliated foundation that operates as the institution’s fundraising branch and applies for grants and solicits individual gifts on its behalf. Although it’s called a foundation, the organization does not provide funding to outside organizations—all the funding goes to the associated institution (in this example, a hospital). While they exist only to support their affiliated institution, foundations like this can still appear in commercial foundation databases, so you need to be aware of their existence and understand that they are not foundations in the traditional grantmaking sense.

An additional area of potential confusion is that “foundation” does not always mean “grantmaker.” For example, in many developing countries, organizations that deliver direct services and depend on grants and donations to survive often include “foundation” in their names to indicate that they are charitable enterprises.

Confirming that a Foundation Gives Grants

If you plan to apply for grant funding, you first need to ensure the organization is a grantmaking institution. If the organization is based in the United States, a good indicator is whether it calls itself a “foundation.” However, as mentioned above, not all foundations give external grants. Additionally, not all foundations that award external grants actually accept applications; instead, they rely on an “invitation-only” model to identify the organizations they will fund.

So, once you confirm that the organization is a foundation, the next step is to verify that it has an active grant program that accepts applications. Clues that a foundation has a grant-making program include the presence of the following on its website: grant program descriptions, grant application guidelines, and a list of past grantees. If you do not see an obvious way to apply for a grant based on your review of the foundation’s website, there’s a good chance that the foundation does not accept unsolicited proposals.

What Our Inbox Tells Us

We frequently receive emails from organizations requesting grant funds (often with dozens of foundations visible in the “to” line). These requests sometimes include a copy of a generic proposal. Emails like this are unlikely to be successful.

A good rule of thumb is to only send proposals in response to a foundation’s published request for proposals, and those proposals should be written to be responsive to the specific opportunity and formatted to match the foundation’s guidelines.

#2: I Need a Grant—Can You Please Send Money to My Bank Account?

Related to the first question, the second most common question we get relates to cash donation requests. Just as we do not provide grant funding, Peak Proposals does not provide cash donations to organizations or invest in businesses. While these requests often appear to be spam, sometimes we receive ones that seem legitimate, albeit misguided. By this, we mean the emails conflate “grants” with “cash donation,” as in, “our organization needs a grant, please send money.”

Grants and cash donations are different. A grant usually involves a competitive application process. The typical order of events is as follows:

1. The funder releases a request for proposals.

2. Organizations submit applications.

3. The funder evaluates the proposals and chooses the recipient.

4. The recipient organization signs an agreement with the funder to perform the agreed-upon work in exchange for the funds provided.

With grants, foundations publish the solicitations, which are the requests for grant applications. Cash donations are different. With cash donations, the organization is doing the soliciting. Another major difference between grants and cash donations is that, usually, cash donations are small contributions made by individuals. In contrast, grants tend to be much larger sums of money given by established entities (foundations, corporations, governments).

You may be thinking, but money is money, right? If my organization needs money, I should ask for it. Does it matter whether the money comes to me as a cash donation or a grant?

Money is not money, as it turns out. Grants and cash donations serve different purposes. Additionally, some organizations, because of what they need the money for and how much they need, should really only be looking at one funding stream or the other.

Key Concept: Grants and Cash Donations Are Different Funding Mechanisms and Serve Different Purposes

If you need money for a specific project, let’s say, providing after-school tutoring to children in underserved neighborhoods, that program could potentially be a fit for both cash donations and grants. This is because 1) there are grantmakers that focus on education and provide grants to support academic achievement among at-risk populations; and 2) local programs are typically supported at least in part through fundraising campaigns, collecting contributions from local community members and businesses. Whereas any grant money you receive will likely be restricted to project-related expenses such as hiring tutors, the cash donations you receive will most likely be unrestricted funds that can go toward general operating costs for your organization, such as office rent or the salaries of administrative staff.

Those who donate small cash donations to your organization will not expect to receive a formal application from you. Instead, you are making a general appeal for donations, and if someone feels moved to do so, they will give you money based on your mission and accomplishments. In return for their donation, you might send them a copy of your quarterly newsletter or a thank-you letter. However, in general, individual donors do not expect anything specific in return for their donations.

Grant proposals = a structured funding mechanism that you apply for, generally results in restricted funds, and usually requires signing an agreement

Cash donations = a less formal funding mechanism that generates unrestricted funds and typically involves asking individuals and businesses to donate money

Small Cash Donations vs. Individual Donors

When we speak of cash donations, we’re referring to small donations received in response to a general public call. If you receive a large cash gift from an individual, that’s a different scenario. If a wealthy individual donor gives an organization a large cash gift, there are often restrictions on how the money can be used, and the donor may request written progress reports on how the funds have been spent and what has been achieved.

Ongoing Expenses vs. Project Costs

If your organization needs money for ongoing expenses rather than funds to support discrete, time-limited projects, grants will be harder to get, and cash donations become more important. If you need money for ongoing programs, it will be hard to rely on grants. You may get lucky and receive a few grants here and there, but it will be difficult to create a steady, recurring flow of grant funding to support your work. In general, funders such as private foundations do not like to provide unrestricted funds to cover ongoing expenses; they prefer to provide grants for projects with clear start and end dates and defined deliverables.

If you seek funding for an ongoing program, the funder will want to know how and when you intend to keep the project going (a.k.a., your sustainability plan) once their grant ends. If you don’t have a way to keep the project going without additional grant funding, many foundations will not give you a grant because they prefer to fund initiatives that have a chance for a lasting, sustained impact.

What Our Inbox Tells Us

Based on the emails we receive in a typical year, the vast majority of organizations writing to us seeking grant funding are not good candidates for grants because they 1) seek funding for ongoing expenses; and 2) appear to have a more informal organizational structure, which suggests they may lack the administrative capability to properly oversee grant funding, at least to the degree required by most US-based foundations.

#3: My Organization Needs a Grant. Where Do I Look for One?

Another question that we get regularly is: Where (or how) do I get a grant? We started our website to provide this information to organizations, so one of our answers is always to look at the resources on our website, including our many blog posts on how to find funding.

In many ways, the question of “where do I look for grant funding” is not that dissimilar from the question of “send me your grant guidelines.” Just as you need to research a foundation’s website to see if it provides grant funding, you should also thoroughly review online resources to see what information they offer, because there’s a very good chance your questions will be answered from what is publicly posted. Not every website is easy to navigate, of course, so the information may not be easy to find. However, very often, you’ll be able to find the answer to most of your questions if you look closely at the content on the website in question.

Key Concept: Do Your Homework

There’s no way around it: Finding foundations and government programs to apply for funding takes a significant amount of effort. One of the reasons why questions like “where do I go to get grant funding” are so hard to answer is that where you need to look and what you should look for depends entirely on your situation:

• Are you based in the United States or another country?

• Are you based in one country but seeking funding for programs based in another?

• Are you a registered nonprofit?

• Do you provide direct services to individuals, or are you an advocacy organization?

• Do you seek money to cover operating costs or program costs?

• Is your program going to be self-sustainable after the grant ends?

How Much Do You Need to Do What for How Long?

There are so many factors that go into identifying the right funders and funding mechanisms. As we cover in our free course Getting Started: The Basics of Finding and Applying for Grants, one of the most important things you can do on your journey to secure grant funding is to know your organization’s needs, capabilities, and capacity.

To identify where to look for grant funding, while it's enough to know your mission and the nature of your projects, the reality is that foundations also weigh heavily on your organization's capacity to manage administrative and financial matters. While many individual donors giving at the local level may not be concerned about your organization’s accounting procedures, foundations and government agencies will be interested, and they will want some assurance that your organization has the capacity to provide adequate oversight of any grant money they award.

From the feedback we’ve received, it sounds like many organizations are thinking about the sequence of events differently, for example: “If we receive a grant, then we’ll figure out how to administer it.” Unfortunately, it doesn’t work that way. Whether you work for a small organization in the United States that is just getting started or an organization in a developing country that has been around for many years but never received a grant, the path to receiving grant funding begins with putting into place systems to oversee your organization’s finances and manage projects. Funders want to give money to organizations that can demonstrate that they can handle funds responsibly.

When Looking for Funding, Be Specific (But Not Too Specific)

The flip side to knowing what kind of funding you need and how much is to avoid being too specific when conducting your initial research on potential grant opportunities. For example, if you want funding to look at a discrete question related to carbon sequestration, you should first research funders that support work around climate change, and then, in the second phase of your research, evaluate the funders from within this broad category to find the ones that might be a good fit for your specific subject area. Identifying potential funders is time-consuming because it requires sifting through a wide range of options, then conducting a deeper analysis of each that shows promise.

What Our Inbox Tells Us

From the emails we receive, our impression is that many organizations writing to us are unclear about the distinction between grant funding and cash donations. In most cases, it appears the organizations contacting us—although they may be asking about grant opportunities—actually need cash donations because they are trying to cover ongoing operational costs, are working in an area with limited opportunities for grant funding (such as a religious organization), or are just launching and lack the history of accomplishments required to secure grant funding.

Before you begin to look for grant funding, first evaluate your organization thoroughly and then choose the best funding mechanism to meet your needs. It may be that you begin by creating a campaign for individual donations and then, after you establish your programs and have a history of accomplishments, graduate to seeking grants.

IN SUMMARY

The questions we receive in our inbox are almost always requests for money or requests for a list of specific funders to apply to for grant funding. Both requests are not ones we can meet, first because we are not a funder, and second because identifying funders who are an appropriate fit takes significant effort and a thorough knowledge of an organization’s mission, capabilities, and capacities. Although we look for funding opportunities every day, it’s hard for us to recommend specific funders to any one organization, as we conduct general reviews of funding opportunities.

Because it’s so important to understand an organization’s capabilities and history when seeking grant funding, we generally advise against hiring consultants to identify funding opportunities or write grant proposals. An outside consultant will not know the organization as well as someone inside, so we usually think it’s best to handle grant-related tasks internally by the organization’s employees. This belief in the advantages of doing things in-house is why we launched Peak Proposals, which aims to help nonprofits build the skills they need to conduct funder research and grant writing themselves.

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