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Your Grants Glossary

Written by Stephenie Slahor

Like every other field of endeavor, grant writing has its own vocabulary, and the quicker you master it, the easier your task of grant writing and the more insightful your work in grant seeking. That’s the advice of Rod Helm of Grant Writing USA.

Take, for example, a “501 (c) (3).” The admixture of numerals and a letter actually refers to a specific section in the Internal Revenue Service code dealing with “exempt” organizations. What does that mean for grant writers? Helm replied: “Exemption as a public charity or a private foundation” or what most people would call a “non-profit” and therefore benefiting from breaks in federal taxation.

Public charities have a cause for which they raise money, incorporate as a non-profit organization, and enjoy tax-exempt status. “Private foundations give money,” said Helm. He added, “Government agencies are not 501 (c) (3)’s. But they can form an affiliated” organization which would enjoy tax exempt status and could therefore seek and obtain grants from private foundations. Donors will not get a tax write-off if they give to a government agency (with the exception of a few rare units of government whose purpose is exclusively for the public good). Donors will get a write-off if they give to a 501 (c) (3) organization.

RFP, SGA, NOFA. Respectively, these initials stand for requests for proposals, solicitation for grant application, and notice of funding availability. In other words, they are the mandates that describe who can apply for what. “The grant maker will say, first, who is eligible to apply, what the money can be sued for, what the deadline is, and other requirements that should not be overlooked,” said Helm. Carefully read and follow the mandates in the requests.

Helm said that most mandates are extremely specific, even down to the style and size of font to use when typing the application. Margin size, the methods of attaching supplementary material, the site where the papers should be stapled, the color of ink for signatures, etc. might all be covered in the mandates. Grants have been lost when the mandates weren’t followed, warned Helm. Know how to apply, following the directions carefully when preparing the grant application.

Helm said that the fastest way to learn how to do grants applications correctly is to be on a grant review committee. It will have a technical review to check for all the “right” ways to prepare the grant application. “If you failed to comply with any one of those, you’re out of the competition!” warned Helm. It’s not nit-picking.

Helm explained that there are two reasons why such attention to detail is critical. The first is to “level the playing field” by making all the applications look alike. The second reason is to test whether the applicant can follow directions. “The grant maker will say, ‘If you can’t follow directions today, how can I trust you with my money tomorrow?’” said Helm. The grant application is “the preliminary indication of cooperation and responsibility,” he said.

Challenge Grant

This increasingly popular grant challenges the grantee to raise additional funds for the project. The grantee gets the challenge, but won’t receive the funds until the challenge is met. Helm said, “If you’re smart, one of the things to figure out is whether you’re qualified and whether they have geographic preferences.” Research what is the “respectable, reasonable level” to ask for in your grant. “If two million is available, don’t ask for two million,” said Helm.

When being challenged, additional time might be granted in which to raise the money, but recognize that a challenge grant is just that: a challenge, and deadlines must be met. “The challenge grant tends to get people demoralized,” said Helm, “but I can’t figure out why because it’s a prelude to future grant money.” The second and third grants from the grant maker come easier when you prove that you have raised the money to meet the challenge, he avowed.

Community Foundation

Specifically targeted for a certain geographic area, the community foundation usually collects gifts from multiple donors, and puts those gifts into a fund for long-term charitable management of the money, under the directions of the donors. Community foundation grants might not raise a lot of money, but Helm called them “a great fishing hole if you need $25,000-30,000 or so.”

Corporate Foundations and Giving Programs

Some corporations put a percentage of their profits into a fund similar to a private foundation. Generally, these corporations give that money only in the geographic areas in which the corporation has a major presence. The giving is usually managed with the input of the firm’s public relations and marketing departments.

The corporation is looking for “visibility and donor recognition” as its “payback,” said Helm. “Have your radar up because you have to know what is the give back,” he said. See if the “strings attached” are problematical or merely minor. For example, Helm pointed out that some communities have a conservative amount of “ad space” on their patrol cars or fire engines as the payback for receiving grant money from the auto or radio company putting its name on the vehicles.

Discretionary Funds

Some federal grant money channels from the federal to the state level. Some go from the federal level directly to the local. But most federal grant money channels from the federal to the state to the local, via a so-called “pass-through grant” by which the state sub-awards the grant money through competitive RFPs. Helm advised that you network with your state to be on its notification list to know what grants will be available and when.

“Formula grants” are based on a national assessment of what the state needs (for example, California might need far more than a state with lesser population). This translates to the fact that some discretionary funds are awarded at the discretion of a particular agency, federal or state. There are also private discretionary funds in which grants are distributed at the discretion of an organization’s trustees rather than by the approval of a full board of directors.

Again, it is necessary to do your homework, advised Helm. “People who complain about a grantor’s requirements don’t know what they are getting into,” he said. “You must walk away from some grants.” A certain scope of work is required for a grant and if you cannot, or will not, do that work, the money stops coming in or you have to turn back the money. “Know what’s involved,” said Helm.

Funding Cycle

Many grant makers set definitive cycles for such steps as proposal review, decision-making and notification. These cycles might be annual or longer or shorter, but they are not spontaneous. When an RFP is announced, look at the deadline, said Helm. You can plan on 80 to 120 hours of work to get things going. If you have only a short time (e.g. 30 days) in which to submit an application, you might not be able to do so.

“Most people don’t wake up and want to be grant writers,” he said. Such duty usually comes with a promotion. “You’re probably doing 40 hours a week already,” he said. “Come to grips with the variables and plan accordingly.” Much of grant work is planning and thought so you can do some tasks in advance, ready for the moment when you put it all together to write your grant application, but if your time is limited, you might not be able to meet the requirements of the funding cycle.

One bit of advice he offers: do the planning work and apply in the next funding cycle. Create a planning calendar. Go to the grant makers’ websites and data bases to look at last year’s grants: what got funded and how. Investigate whether you’d qualify, too.

“Grants are two-thirds planning and one-third execution,” advised Helm. Much of the basic work can be done well in advance of the actual application. You then only need to check the new RFP and bring your facts and figures up to date. “Planning includes much time building trust and relationships,” Helm said, so plan thoroughly and effectively.

In-Kind Contribution

If, instead of paying money for goods or services, you are given those goods or services, you’ve received an in-kind contribution. Helm said that if you’re tracking the work of volunteers in the agency and you need a dollar value for that in-kind contribution, go to www.independentsector.org to learn the value of the volunteer’s work.

Letter of Intent, Letter of Inquiry, Preliminary Proposal

Before you go to the time and expense of a full proposal, you might write a brief letter of intent or inquiry indicating interest in submitting a full proposal later. Helm said that this practice is both a “nice idea and a dangerous proposition.” Running something on a grant is using money that is encumbered or restricted so it is not practical to run an agency strictly on grant money.

But if you do strategic planning and plot your organization’s growth over the next five years, overlaying anticipated revenue streams, grants might fill the gaps in funding. “That’s the way to plan,” said Helm. “Yet most people see an RFP, and look at it, and do it opportunistically.” He advised, “It’s better to use the primary motivation of where we are today and tomorrow,” state your intent to the grant maker, and use a letter of inquiry or intent to show the grant maker how its help will get you to the next goal.

Ongoing Support, General Support

This type of funding covers such things as day-to-day expenses, salaries, utilities, office supplies, rent/mortgage payments, insurance, and accounting costs. Although not a frequent type of grant, it exists. Helm said it is in the genre of “you’ve got to ask people to give you money.” But it is not “shaking a tin cup.” Instead, he said, you prepare information that shows your value-added qualities.

The grant maker is always looking at “the bigger picture.” You must show that that what you need and what you want accomplishes the “greater good.” Helm said this type of grant is probably the closest any grantee will get to “free money,” otherwise “free money” just doesn’t exist in the world of grants. “This is grants, not gifts,” he said.

Stephenie Slahor, PhD is a lawyer who writes in the fields of law enforcement and security. She may be reached at DrSS12@msn.com.

Published in Law and Order, Feb 2006

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