The Secret to Using Grant Funding to Cover Operational Overhead

fundraising grants Jan 24, 2022

The Secret to Using Grant Funding to Cover Operational Overhead

Could it be? Can grants really cover operation expenses?

Everything discussed in my previous post on grant writing discussed the “ideal” and the “mindset” I want you to use moving forward as you pursue grant funding. However, I am no stranger to the reality of fundraising.

If grant funding is given primarily to organizations with successful programs, how do you build a successful program without funding; the catch twenty-two of grant funding and starting a new nonprofit. I work in and for nonprofits, and I am no stranger to the need to use grant funding to cover a start-up or an operational gap. This week’s post is a pro-tip and some advice that successful grant writers use to cover some of your overhead using the mindset and the ideals outlined prior.

You will recall from the last post that I said if you want to increase your chances of success in seeking grant funding, choose to seek funding for a project that is already proven. I could telepathically hear you saying, “easier said than done.” I will give you a solution with a lesser commitment. Let’s say you are committed to a project, but you need more funding to get to the proof of concept. This strategy can help you achieve the necessary funding to get you to the point of proving concept.

The assumption prior isn’t that you have a proven project, but I will lower the threshold and set the limit much further down the chain. The new assumption is that you are committed to carrying forward one project to completion or to proof of concept in the coming few years.

Here’s the plan:

  • Take your budget for the next year and break it down into projects.
  • Then choose the project that you are most likely to accomplish.

Now that we have a starting point, here’s what we will do next. Remember how we said that grant funding was most likely to be received when you were confident that you would achieve your goal? You will achieve your goal, and it’s budgeted. Break your project’s budget into different parts and write out an explanation of the importance of each section for the success of the whole.

Let’s say you had a program that helped high school and college students graduate at higher rates… it’s not proven, but you just launched it or are working towards establishing its effectiveness. You now have a story. It is going to take you at least eight years to prove the concept (that’s from high school freshman to college graduation); however, if students graduate from college at a respectable six-year rate rather than a four-year rate, that is ten years to prove your concept.

Now, you can apply for a grant to cover ONE program costs for up to 10 years. That covers some operational expenses, thus freeing up your budget that you would otherwise need to fundraise to cover.

In the example, let’s say that you did SAT prep as part of your college prep experience. You gather some stats from other organizations that show how SAT prep positively impacts college acceptance and graduation. Now break down your budget for this program: Books, cost per hour for the tutors, rental space for the classes and test prep, etc. Write the grant application. You can ask for a proctor and for a tutor because it is directly related to your SAT project. These funds alleviate your overhead, thus freeing up money that you had budgeted for these purposes and making it unrestricted.

You’ve now gotten a grant that covers a program and coved some of your overhead expenses! You also wrote it with the confidence that you will do this project with or without the help of the granting foundation, which gave you a competitive edge and made your grant application more appealing to fund—tricks of the trade.