Grant writing is a kind of fundraising that focuses on raising money from institutional givers through a written application process.
Grant writing seeks funding from three different types of funding sources: private foundations, corporate foundations, and government grant makers. Each individual source uses an application form that a grant writer must fill out to request funding. The forms vary in length based on the grant maker… government grants always being by far the longest and most involved.
Each type of funding source has its own reason for being.
Private Foundations – A private foundation manages a pool of funds (called a corpus) that exists solely for the purpose of giving money away. They get special tax exempt status in return for giving away 5% of the total net assets annually, or an average of 5% over a period of years. Private foundations are typically founded by individuals or groups that decide that they want to preserve their wealth in such a way that it supports their charitable intentions in perpetuity. They range from small (a few thousand dollars) to medium ($10,000,000 or more) to staggeringly large (more than a $1,000,000,000). The bigger they are, the more professional staff they tend to have and the more strict the requirements for securing funding will be.
Corporate Foundations – Corporations form foundations as part of the their public relations and corporate citizenship programs. They take advantage of the tax exempt status of a foundation to create a special pool of funding that can be used to support causes that are connected to the company’s primary business. They typically only fund in areas where they have a significant employee presence, and will often fund a few types of programs, like science education, human services, or financial literacy. These foundations often have restrictions in place that prevent them from giving to church related activities.
Government grant makers – When writing government grants, you are actually submitting a bid to enter into a contract with the government agency to perform a specific activity. The types of activity that are funded vary depending on the agency, and you will be required to track your activity and spending on a regular calendar. These are grants that you will need paid staff to administer. Catholic institutions are able to access government grants in fields like social service, medicine, and education. You have be careful, though, because the money comes with strings attached. Typically government funding will require that you severely limit the amount of ‘faith based’ content you provide. For example, many government programs will prevent you from requiring clients from attending religious services. So if your mission is evangelism, be very particular about whether a grant is a good fit for you.
A few cautions:
Grant writing takes a lot of time. From putting together a good grant proposal to hearing back on whether you’ve gotten funding to submitting the final reports on whether you’ve accomplished what you’ve set out to do… the whole process typically takes a year to 18 months. It can take even longer when you consider multi-year grants.
If you’re just building a grant program, expect to hear ‘no’ quite often. Grant funds tend to be more competitive than other sources of funding, because foundations, corporations, and government grant makers make their information publicly available. You are competing with everyone else who needs funding for a limited pool of funds.
Grant seeking can be a very successful type of fundraising program, but you’ll need to commit to investing a significant amount of time and money before you can expect to see much fruit from it. Once a relationship with a grantor is established, however, you can often go back again year after year, making it a fairly consistent stream of revenue.