Three Must-Have Keys to Get Grant Ready and Avoid the ‘Door Effect’
By : Jane Ramachandran
Categories : funding, loans, small business, grants, blog, not-for-profit, money, grant ready, cash flow, startup, government grants, company, applications |
Everybody knows that a winning proposal requires great writing, awesome ideas, and compelling impacts. However, in reality the application is not the only factor that influences funding success.
One of the most crucial yet overlooked success indicators is what is known in the industry as “grant readiness”.
Applying for funding without being grant ready is akin to propping up a door on a grassy hill and looking to sell it as a house. With no frame. No basement. Just a door. No matter how nice that door looks, it is missing a key element: the rest of the house!
In the funding context we call this the “door effect”. It's what happens when an organization applies for funding for a great-sounding project but fails to clearly demonstrate capacity to manage the grant and undertake the project.
Getting funding isn’t just about money. It’s also about trust. Funding agencies are looking for more than a great pitch and world-changing ideas before investing the cash. They want to know there is organizational strength behind the idea and a high probability for success.
As important as this is, assessing grant readiness is not completely objective and straightforward. There are many factors that can make the case or raise a red flag, and each agency is different. However, organizations wanting to improve their grant readiness can get a head start by ensuring they have the following:
1. A Well-defined Project
Grant-ready organizations know what they want and why. They have a purpose in mind even before looking for funding, which makes it easier to define their project. In its most fundamental form, a well-defined project can answer our classic three questions:
- How much money do you need?
- How will the money be used?
- When do you need the money?
Answering these questions will then help with the next level of detail, that is, to determine if the funding will be project-based or expenditure-based.
A project is defined as having:
- a start date and end date,
- deliverables in the form of an output that you can measure.
An expenditure is defined by a cost category, e.g. salaries, equipment or travel, ideally with specifications.
Having a project or expenditure that is clearly defined, and explaining it in the context of your organization's vision or mission, will help you confidently communicate the use of funds and convince funders that their investment will be well spent.
2. Business Systems
When it comes to grant readiness, business systems are essential to collect and report information to the funding agency. Examples include:
- an accounting system to track expenditures,
- a time tracking system for project staff, and
- a way to track and quantify deliverables.
There are many software tools in a range of price points that can help with tracking and reporting. If possible, go for simple yet robust tools that are easy to use. The key is to collect the info you need without making reporting in itself a project!
This might seem like an oxymoron, however having sufficient cash is one of the most important factors to become grant ready. This is because in order to receive a grant there are three things related to cash that must be demonstrated:
- Matching cash for the project, which generally ranges from 10-50% of eligible project costs plus 100% of ineligible project costs.
- At least four months of cash flow for the entire project’s costs.
- Cash to sustain your operations while you are undertaking this project.
Cash can be a major obstacle to funding success, so we’ll cover the topic and each of the above points in more detail in future posts.
Understanding what funders look for before they consider supporting you, and taking the necessary steps to become grant ready, will help your organization shine and better position your project as a worthy, high-impact investment.
Don’t know where to start? Contact us. We help clients build a strong foundation through templates, advice and hands-on support.
Has grant readiness impacted your funding success? Have some advice to share? Join in the conversation below!comments powered by Disqus