Establishing a new nonprofit organization is admirable; it takes determination, commitment, and a vision to solve a problem. Founders of fledgling nonprofit organizations often come to me once they successfully receive their IRS determination letter confirming the organization’s 501(c)3 status, requesting grant support as the next logical step. They are excited to be able to ask for money since they overcame the nonprofit status hurdle. Yay!
Let’s not celebrate just yet.
Grant Writing is just one type of fundraising available, and it is not the first one to pursue. Executive Directors get frustrated when they immediately start writing grants. They get turned down because the organization is brand new; it hasn’t delivered a program, so there is no track record to demonstrate its ability to achieve results. Some EDs have opined that they are in the ‘chicken-or-the-egg’ dilemma; without funding, they can’t run the program, and if they could run the program, they wouldn’t need the money. However, since Grant Writing is not the first fundraising tool, there’s no dilemma. Funders need to know you run a stable, financially sound organization that impacts the focus areas they support.
Start with a Special Event. It is the first step on the fundraising ladder. This special event, often called a friend-raiser instead of a fundraiser, is designed to spread awareness about your vision and mission to family, friends, and key stakeholders, so they support your proposed core program. Fundraisers can generate significant revenue, but usually not as much as the nonprofit needs to operate and deliver core programs.
So, you’ll want to advance to the second rung of the fundraising ladder: the Annual Appeal. This letter ‘appeals’ to the hearts and minds of those interested in how you are solving a problem. At your special event, you will collect everyone’s contact information so you can follow up with them. This Appeal Letter is one way to grow your audience, revenue, and general awareness. Your purpose for the letter can be to thank them for attending, invite them to future events, offer ways to get involved and ask for a gift. By taking these steps, you increase your reach of the number of people who want to support you. By engaging in special events and annual appeals, you show the potential grant funder that you have diversified funding streams and are not banking on grants alone.
When you have raised enough funding, you deliver the program while refining the budget and tracking outputs and outcomes. You can seek grant funding when you have delivered the program for at least a year or two and achieved the intended results with proof of success. As you contemplate using Grant Writing as a fundraising tool, learn its strengths and limitations. The Grant Writing process is slow, limiting, restrictive and prescriptive. Funders want to help your organization, but only if it is financially fit, following best practices, and fulfilling its mission. The more successful you are, the more appealing you become to funders. Demonstrating your organization’s self-sufficiency will save you time, money, and frustration while increasing your chances of gaining the funding you seek.