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Common Questions and Answers About Fundraising
for Small Nonprofits

What do I do if the funder says "we only give to pre-selected organizations?"

The question really needs to be "how can I become a pre-selected organization? Often, funders have a select list of grantees they have historically given to and it is easier on them to just continue to fund this small group of organizations. Sometimes the pre-selected organizations are chosen because one of the trustees either sits on the board of the agency or the trustees or donor family have a close relationship with the organization.

Applying directly to the funder with an unsolicited proposal just won't work. Remember, people give to other people and not just to causes and organizations. Our suggestion is to research the trustees and staff and see if you can establish relationships with them at their church or synagogue, service club (Rotary, Lions, Elks, etc.) or at their business location. This is best done by someone who "knows the funding source" and can make the introduction to give you more credibility. Does one of your board, staff or volunteers know someone involved with the funder? Do they know someone who knows someone? Becoming a pre-selected organization takes time and patience while you wait for the funder to shift priorities and your organization becomes a favorite.

After you have made the initial contact, put the grant maker on your mailing list; find ways to meet the trustees or staff periodically throughout the year, find out what specific priorities and interests they have, and invite them to tour your facilities. Sometimes you can invite the staff or trustees to become individual donors of your organization - and that's a great way to "get your foot in the door."

None of the local funders is willing to come up with money to expand our program. As a small nonprofit, do we have any chance of funding from large, national foundations?

Usually, national foundations are interested in supporting programs that have either a good chance at being replicated in other parts of the country or have high local or regional/national impact. They will be looking to see which local funders are "coming to the table". National funders are interested in seeing their dollars leveraged by other resources, not necessarily institutional funders-money can come from churches, small and large donors, or special events. In-kind contributions also add to a local organization's credibility to raise national funds.

There are some exceptions to the above rule. For many years, I have raised money for advocacy and community organizing efforts involving controversial issues or strategies that fostered social change efforts. In this case, local funders; may be unwilling to fund these efforts because they don't view their role as fostering social change. Local funds may be difficult or impossible to raise in these situations. In this case, your best bet is to approach one of the "social change foundations." interested in supporting social change efforts involving poor and disenfranchised constituties. Visit a Foundation Center Cooperating Collection and ask to use FC Search, or ask whether the library carries the National Network of Grantmakers's GRANTMAKERS DIRECTORY, one of the most comprehensive directories of social change foundations available.

Remember, the competition for national funds is greater than for local resources. If you approach national foundations, always do your homework first, by calling for their latest annual report, seeing if they have a web page, getting guidelines. Try to see if you can "plug into" a national network that represents your interests and can make the introductions. If not, try writing a two-page letter of introduction and let them know that you will be in New York, Chicago, California, etc during the week of _____and you would like a 30 minute interview. Then, find a way to get to there.

I've got an interview with a program officer and I want to make an impact. How can I take control of the short time I'm allowed for the meeting?

Congratulations! Try to take two-three people with you, at least one person being a recipient of your services. This person is key as he or she can talk from the "heart" about the impact of your program. Funders get to meet CEO types all the time, but don't always get to meet the "guts" of your mission. Bear in mind that you want three things from the interview:

A commitment that the funder is seriously interested in receiving a proposal from your organization. How do you get this? You ask "can we submit a proposal for your summer youth employment program that will employ 250 kids next summer?"

A specific dollar amount. "Can we submit this proposal for $25,000 to your foundation?. The total cost of the program is $45,000 and we are raising the rest of the money from private corporations, our board of directors, and churches within our community. Do your homework prior to going into the meeting and research the median grants. If you are a first time applicant to this funding source, you can apply for about 20-30 percent above the median figure

Gather a timeline for when the proposal is due. Try to get the proposal into the funder at least 30 days prior to the deadline. This allows the program officer time to review it and suggest changes (not all foundations do this), it allows you enough time to mail follow-up materials, and to place phone calls to either the staff or trustees.

How can I get an interview with the program officer when the foundation "prefers to be contacted by mail"?

Good luck!!! Sometimes you need luck, work, and perseverance to get the interview. In our opinion, any way that you can convince a funder to meet you in person is highly recommended. There is no better person to "sell" your program than you and your team.

Obviously, if the funder is adamant that applicants will not be seen without first submitting a proposal, there is nothing you can do. You have to abide by the funders' rules. Often, though, you can write a well-composed, interesting and exciting two page letter (1 pages is better) that asks for an interview. This has been known to work.

If you can't get an interview in person, try to make a phone call and be prepared to talk about your program, its uniqueness to your community/constituency, and why you think the funder should be interested in supporting you. If the phone call goes well, let the funder know that you would welcome the chance to meet for 30 minutes with them in person.

How can I cover my general operating costs, when the foundation does not cover "administrative expenses"?

It is ironic that almost all private sector funders (foundations, corporations, religious institutions) do not want to fund administrative expenses when they all know that without covering the overhead, organizations cannot survive. Most funders want to fund specific programs, projects, capital and equipment needs. Grant makers will support aspects of your organization where they think they can see tangible, specific, and concrete results. Most funders support the leadership and capability of organizations to accomplish their missions.

Government and public funders have long realized the need to cover administrative overhead on grant and contract proposals and many local, state, and federal government sources will either allow or give you a percentage of the costs for overhead. In the private funding world this usually is not possible unless the funder specifically says that it provides "general support."

Recommended strategy: When you are writing grant applications, put into the budget your actual costs without calling them administrative overhead. Make sure that if the CEO has to spend 10 percent of her time supervising the project director and her salary is $50,000 that you put into the budget $5,000 for the CEO time and tie it into the project budget. Also include computers, rent, paper and other administrative expenses. The point here is to put all of the actual costs of running the program without calling it administrative costs. Sometimes funders will not allow these costs.

From our experience, however, oftentimes the funder will allow many of the costs if they are directly tied to the completion of the program/project. And besides, if the funder accepts your proposal but doesn't give you all the money you asked for (which is likely), at least these costs are always written into the grant and you are in a better negotiating position.




WWW http://staff.lib.msu.edu/harris23/grants/

Ownership Statement
Jon Harrison : Page Editor
Funding Center Supervisor
Social Sciences Collections Coordinator
Michigan State University Libraries
366 W. Circle Drive
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E-mail: harris23@mail.lib.msu.edu
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Last revised 06/22/08

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