How do you know if your nonprofit is ready to apply for grants?

It's official! Your organization received notice that you are a 501(c)(3) nonprofit. Congratulations! You're ready to impact change in your community and the world. You're probably considering ways to fund your programs, staffing, and resources. Grants are an excellent resource for helping finance your mission — after all, who doesn't like "free" money? Hold on just a sec. There's a critical piece of information you need to be clear about: grants should not be your first line of funding for your nonprofit. Most grantmakers want to know if your nonprofit can sustain your programs when their funds to you run out. In fact, grants should account for no more than 30% of a strong organization's budget. So, how do you know if your organization is grant ready? Let's consider a few aspects.

What does your organization stand for? Do the funder's priorities align? No, like, really align? Finding a grant opportunity that seems like a good fit for your organization is easy. Still, as your dig in deeper, you risk changing the scope of your program to fit within the funder's priorities and become unaligned with your overall mission. Instead, make sure you're clear on how your proposed program fits within your organization's mission and strategic plan. Use that as your guide in finding funding opportunities in alignment. As your organization develops a grant management plan, you'll want to be realistic about how the program will be implemented and maintained. Many grantmakers also ask for a sustainability plan to ensure the project continues after their funding period ends.

A robust and engaged board can mean the difference in getting things done for a nonprofit. Your board (and executive director) establishes your nonprofit's strategic plan, budgets, and development plans. If your board members are connecting with community members, involved in strategic planning, and connecting with funders, then you're in good shape.

Funders require a few documents to verify your financial stability, including recent 990s, Articles of Incorporation, your organization's Annual Report, and your IRS Determination Letter. Different funders may want to see other documents, and federal funding will likely require the most documentation. Creating a digital folder of these commonly requested documents can save you time. Just review them each fiscal year to ensure they are current.

Not only do grantmakers want to fund programs that align with their mission and priorities. They also want to know if your nonprofit can sustain your programs. Having other funding ensures that great programs are maintained even when the grant money runs out. This means seeking individual donors and other sources that indicate the program's longevity is essential.