It’s not uncommon to hear that your community-based nonprofit is not government funded and you didn’t take advantage of the influx in relief funding made available within the last 18 months.
Government grants have often carried the reputation of being too complex, and the micro-management of the stressful reporting process wasn’t worth the small amount of funds. Since the National Council of Nonprofit confirms that 92 percent of nonprofits have annual budgets less than $1 million, small and mid-size nonprofits have passed on these opportunities to pursue easier routes to charitable resources with individual giving, private foundations, and corporate support.
When nonprofits had to radically adapt to the abrupt changes due to the coronavirus (COVID-19) pandemic while maintaining services, many organizations found themselves economically paralyzed or unable to keep their doors open. Resilient nonprofits transformed the crisis into opportunities for innovation in seeking alternative approaches to resource development. Community-based nonprofits are becoming fiscally transparent about their financial positioning and discovering ways to diversify their portfolio which now include government grant funding.
I’m a scholar of community-based nonprofits, and I published my research on fiscal transparency. Check out my website for the six resilience qualities of community-based nonprofits.
In this blog, I will help to demystify the hairy-scary stigma around the government application process to deliver six questions every nonprofit should consider prior to applying for a government grant, including ways to incorporate this unique source of funds into your portfolio:
1. Why should we apply for government grants? Fiscally healthy nonprofits have a diverse funding matrix to include corporate, private, and government grants. Government funds offer a variety of opportunities for planning phases, capability-building, and multi-year funding. Grants are available for construction and non-construction projects. Being a government funded agency also fosters hope and optimism within other funders and the community as a trusted service provider. Review the grant eligibility criteria with your leadership to determine if your nonprofit has the capacity to apply, and implement the proposed program.
2. Where do we find government grants? According to the U.S. Department of the Treasury, The American Rescue Plan responded to the COVID-19 public health emergency with $350 billion made available to support the economic stability of households, businesses, and nonprofits. The use of these funds are provided on a federal, state, and local level, so be sure to check your state governor’s office website for details, and subscribe to Grants.gov to receive notifications about funding opportunities.
3. When is the best time to apply? Notice of funding opportunities are posted year-round depending on the government funding agency. Key dates to remember each year for the government fiscal year is October 1–September 30, and federal budgets are approved in February. January is a prime time to start researching forecasted opportunities for the upcoming year. Your nonprofit will need ample time for the application process. The average time to complete a government application package is approximately 80–100 hours. Be sure to inform all team members of the time commitment.
4. What kind of government grants are available? There are four types of government grants—competitive, formula, continuation, and pass-through grants. Competitive grants are most commonly-applied by community-based nonprofits. In the Congressional Budget Office Fiscal Year 2020 Report, $914 Billion in discretionary spending from the federal budget was designated for programs related to education, transportation, veterans’ benefits, health, housing assistance, and other activities. Check your state, county, and local municipalities websites for Community Development Block Grants (CDBG) to assist with public services and public facilities funding.
5. Who completes the government application? All hands on deck are needed to complete the robust government grant package. Your government grantwriting team must include direct-care staff who will be responsible for the implementation plan. Your human resources (HR) and finance departments will work together to determine the grant-funded positions and fiscal oversight, especially during the reimbursement process. Performance measures should be tracked and monitored by your data management personnel. Evidence of community partnerships demonstrates collaboration, therefore their presence may be needed to write their part into the application. Your board of directors should review the application prior to submission to ensure fidelity and an added layer of quality assurance. This is a journey that both internal and external stakeholders should embrace together.
6. How do we start the government grant application process? A nonprofit should be proactive in registering their organization on an annual basis in the federal grants systems. Registration is free, yet the process has several different steps, and it takes six weeks or more to complete. In order to apply to federal grants listed on Grants.gov and to manage the awarded funds, applicants will need these three things to get started:
- An Employee Identification Number (EIN) is used for the purpose of a tax identity for your nonprofit or business.
- A Data Universal Number System (DUNS) is a 9-digit number that tracks the allocated federal funds.
- Systems for Awards Management (SAMS) is required to do business with the federal government and the ability to receive the award via electronic payments.
The landscape for government grants is promising and becoming less intimidating to community nonprofits. Nonprofits are engaging in holistic conversations centered around fiscal transparency and the long-term stability of the organization. By asking these six important questions, nonprofits can make more informed decisions about government support.
Is your organization government grant ready? Register for Candid’s webinar, “Diversify Your Fundraising Portfolio with Government Grants” on Thursday, December 2 to learn the fundamentals of government grants application process. Enroll now!
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