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The Pros and Cons of Nonprofit Grants

This article was originally published in Nonprofit Hub Magazine.

Whenever I find myself with a few hours of free time, I like to consult nonprofit professionals to help make their organizations more robust and self-sufficient. It’s fulfilling and a lot of fun, but it can also be frustrating and tedious. And, almost always, grants are the driving force of that frustration and tedium. Folks new to the industry seem to have an overblown notion of what grants can and should do for their organizations. They’re great tools—don’t get me wrong—but a grant can’t be your silver bullet.

Grants can be good, they can be bad and they can be everything in-between. They’re truly the ultimate double-edged sword. Let me explain.

The pros

Granting organizations are plentiful, and many of them distribute generous amounts of money year-round. So the good news is that the money is out there if you know where to look, and my advice is to always start local. Not only are there fewer organizations applying for local grants than international or government-issued grants, but local granting organizations will be able to see the impact of your work firsthand. It’s often difficult to explain in words the impact your organization creates, but if the community can experience your events and programming themselves, you can spare yourself the tricky wordplay.

Grants also prove to be valuable if you have a plan to fund your organization or program after launch. In other words, grants can help you get started, but they usually won’t keep you going. Most if not all granting organizations will ask how you plan to sustain the project in the future, whether that’s through earned income, government contracts, private investors or some other method. Claiming that you plan to use grants for future funding doesn’t usually sit well with granting organizations. In fact, having funding sources before you apply for a grant gives your organization credibility, making you stand out from the applicant pool.

Once you have a grant or two under your belt, applying for others becomes increasingly easy. Writing about your organization will feel like second nature, and a lot of applications have similar, sometimes identical criteria. Don’t be afraid to copy and paste chunks of previous grant proposals—after all, it’s not plagiarism if you’re the original author. Of course, you’ll want to be sure doing so won’t affect the overall quality of the application, but it can save you hours if you have something to pull from.

The cons

Grants are almost always meant to be a supplemental funding source. That is, a grant alone shouldn’t be the only lifeblood for any of your programs. Unfortunately, too many nonprofits and startups are under the impression that grants can raise them from the ashes and sustain them for years to come. This misconception of grants—fueled by anecdotal stories that receive a lot of media attention—ultimately causes a lot of organizations and programs to fail. For one, grant applicants often grossly underestimate the cost of their projects, necessitating other funding sources that they don’t have on hand. And if a grant recipient manages to successfully launch their project, they’re often so busy with execution that funding for the subsequent year is far from the front of their mind.

Mission creep

Grants can also serve as a catalyst for what we in the nonprofit sector call “mission creep.” Mission creep is a shift in the direction of an organization’s work, resulting in a long-term commitment they might not be ready for. Of course, changing your mission statement is a natural part of the maturation of your organization. However, you need to be careful and deliberate when making those changes, and grant opportunities can make that all the more difficult.

Most grant applications specify what “areas of influence” or “social impact” your organization must have to qualify. For example, a foundation might only be willing to consider nonprofits that engage in youth education, or workforce development, or homelessness eradication. A lot of times organizations see these categories and think, “Well, we sort of do that” or “We could do that,” when they should be seeking out grants that directly and specifically relate to the work they’re doing. You need to be proactive about seeking out grants rather than reacting to grant opportunities that may not be appropriate for you.

Whenever I consult nonprofits in their infancy or those trying to launch a new project, I make sure they’re taking all types of funding into consideration. Grants can be a picture-perfect option, or they can be a detrimental one, and it’s important that we know the difference.

The post The Pros and Cons of Nonprofit Grants appeared first on Nonprofit Hub.

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  1. Because of the Covid 19 pandemic we have had to make costly changes to our operation putting a financial strain on our organization. I have ran this organization for 10 years and this is my first time seeking funds. Very hard to know how and where to begin.

  2. R.M.Njoroge says:

    We are a CBO based in Muranga, Kenya. We are on third yearbook operation. We were so get funding this year but all had drained down to zero. We cannot support cerebral palsy mothers even with “food and medicines” for their children. COVID has created a very desperate situation. It’s unbelievable. [email protected]

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