In What Foundations Want to Know we discovered the eight questions grant reviewers want answered. Grant Writing: What Need Do You Meet? gave us insight into how to describe the needs our program meets. Grant Writing: How Do You Meet the Need You Describe? gave us pointers on how to write about the program we want funded. In Grant Writing: How Do You Define Success? we talked about projecting success. In Grant Writing: How Do You Measure Success? we covered several bases on which to measure success. Grant Writing: How Much Does Your Program Cost? And Grant Writing: Do You Have Community Support? showed us different ways to show community support, even if we are a new nonprofit. Today, we discuss how to demonstrate sustainability.
Foundations do not want funding leeches. Generally, foundations only provide one year of funding at a time, with no promise of future funding. They want to know what you are going to do when their funding runs out. And they want to see progress. Foundations want their contributions to make more than a year’s worth of impact. They are looking to make a significant impact over a long period time. How do you show sustainability, especially if you are a small nonprofit with limited resources?
Demonstrating Financial Sustainability
Financial sustainability is demonstrated through good financial planning. Good financial planning is accomplished through good financial management, solid revenue generation, and protection of assets. A well written strategic plan addresses all three of these areas. The fifty percent of nonprofits with a written strategic plan are ahead of the game. Their chances of succeeding in an environment of increasing demands with decreasing resources are far better than those nonprofits with no written plan. This is why foundations ask about strategic plans. They know the strength that results from the strategic planning process. We talked about using the strategic plan as a basis for success in your proposal narrative in Grant Writing: How Do You Define Success?
The way to demonstrate good financial management in your grant proposal is to include a brief statement of your agency’s financial procedures. In most cases, due to length restrictions, you’ll need to get it down to a sentence or two. In longer proposals, usually when requesting large sums of money, foundations may ask for more detailed information.
Good financial management also means having reserves for a rainy day. How many months of operations can your reserves fund? The recommended amount is three to six months. If you don’t have that much, how will you get it? What will you do if you experience an unexpected expense that must paid? Tell the foundation your plans for dealing with financial emergencies.
To demonstrate solid revenue generation, include all sources of revenue in your sustainability plans. For example. If your organization has an endowment, state how much in interest or dividends is going to be used for program operations, if any. If your nonprofit realizes fees from goods or services, state your agency’s plans for continuing and/or increasing the earned income stream. Talk about your fundraising efforts through individual donations, corporate contributions, government contracts and special events, as well as other foundations. Just how do you plan to raise and continue the revenues you included in your revenue budget?
Let the foundation know you will protect the resources your nonprofit so painstakingly obtained. What are the checks and balances in your organization’s accounting systems? How do you care for your agency’s facilities and equipment? What about your nonprofit’s confidential client, employee, donor, and financial information? Is there other property your organization needs to protect? An often overlooked one is intellectual property.
Mentioning assets in your sustainability section is evidence of financial strength. Assets are a measure of wealth. They are resources that are quantified in your nonprofit’s financial statements. Possession of long-term assets means there are resources that will last some period of time into the future. Developing and maintaining assets is an important part of any nonprofit’s financial strategy.
Demonstrating Program Sustainability
In addition to financial sustainability, you should address program sustainability in your grant narrative. By program sustainability, I am referring to how your organization will sustain its operations. For example, how does your nonprofit attract and recruit staff, especially in a tight labor market? What retention strategies does your organization employ to keep talented staff? What about the space your program uses? Does your agency own or rent space? If your nonprofit rents, how long is the agreement? If space is donated, how long will that agreement last?
You also need to mention program sustainability in terms of program clients. How do potential clients become of aware of your program? How does your nonprofit fill openings in your programs? How long does it take? Do you accept referrals into your programs? From whom? What is the process? In other words, how do you market your program and what is your clients’ initial experience? We talked about the client journey in. Grant Writing: How Do You Meet the Need You Describe?
Rather than sentences, answer most questions about program sustainability by adding descriptive adjectives and adjective phrases to sentences in sections other than the sustainability section. The section where you describe your program’s operations is ideal. Space is limited in most foundation proposals. You may need to figure out ways to be extremely concise. Some proposals have word limits. Some even have character limits.
Demonstrating Mission Sustainability
In addition to financial and program sustainability, address mission sustainability in your grant narrative. This is most easily done by referencing your nonprofit’s strategic plan. We talked about measuring success through an agency strategic plan in Grant Writing: How Do You Measure Success? A strategic plan is a written road map of how your agency plans on fulfilling its mission. Having a strategic plan anticipates future existence. Following the strategy outlined in the strategic plan assumes mission sustainability. Needing to regularly update the plan means that your organization has met its goals and objectives or that it is responding to some sort of change. Both indicate mission sustainability and organizational strength.
Financial stability is what most grant writers write about in the sustainability sections of their proposals. To demonstrate financial sustainability, show good financial management, solid revenue generation, and adequate asset protection. To cover all your bases, in addition to financial sustainability, address program and mission sustainability. Talk about program operations and marketing when addressing program sustainability. Reference your nonprofit’s strategic plan to address mission sustainability. You may need to find creative ways to concisely communicate mission and program sustainability.
Wrapping It Up
- In your proposal, address financial, program, and mission sustainability.
- Financial sustainability is demonstrated through good financial management, solid revenue generation, and adequate asset protection.
- Describing how your program will sustain its operations is just as important as describing how it will sustain its finances.
- Regular strategic planning is a good indicator of mission sustainability.
- Be creative and concise in communicating sustainability to adhere to foundation page, word, or character limitations.
Grant writing is just one piece of the fundraising pie. It is also important to identify your nonprofit’s fundraising strengths and gaps, explore diverse revenue streams, engange your board and excite your community.
To learn what your agency can do to move ahead, schedule a complementary 30-minute strategy session with me. During our time together, we will clarify the fundraising issues your nonprofit is facing, explore possible solutions, and develop a plan of action.
When you make your appointment, you will be asked a few brief questions about your situation so that I am best prepared to help you. I look forward to our conversation!