Most people think to fund your nonprofit you should look for grants. It is a good idea, and after all, many organizations out there give money away to support various programs. However, to grow your non-profit, you need to have a plan with diverse revenue streams. One source of funding can be usgrants.org, and you should seek all the grant money you can get. But, interestingly, there are times when grants money is not the way to go. Below are 5 examples of times you should not seek grant funding.
1. To cover startup costs
When you are getting started, it may be difficult but not impossible to cover startup costs. But, most foundations will not consider you as they need to see at least three or more years of experience before supporting your program. You have to prove with results that your organization is worthy of the funds. Through the impact, your program is having and your track record. Thus, getting a grant before you do anything is a challenge. First, build your reputation to prove you are doing good work. Even with few grant offers for startups, they are very competitive and scarce. It is best to build a donor base and other forms of fundraising as you get grant ready.
2. For ongoing funding
Do not count on grant funding for your ongoing operations or programs. Once you get awarded a grant from a foundation one year, it is not automatic to receive it every year or when in need to further ongoing funding. For this reason, do not plan your income or organization budget around the expectation that a grantor will fund your needs continuously. Sometimes, although it is rare, you might find a family foundation that loves your work and wants to offer funds yearly. Other than this, do not assume you will receive grant money the following year unless otherwise.
3. For urgent needs
Sometimes you might need money for urgent needs because something happened. For instance, your organization responds to emergencies in the community, and you need funds fast to address them. It may be a flood, fire disaster, or an outbreak in the community. Also, it may be you discover your treasurer has not been paying the rent or keeping up with taxes. Such situations are urgent and need you to have money to sort them. Yet, grants are not a good source of funds to meet urgent needs. Grants are best to fund specific projects and programs.
4. For administration
Only apply for a grant for administrative or payroll stuff unless the funding is for that purpose. Most foundations love helping with hands-on work, supplies for the hands-on work, facilities to help with hands-on work, and anything else that is of assistance to the hands-on work. It is not exciting or of interest to them about paying administrative assistants and bookkeepers. The administrative side is always important and keeps your doors open, but most grantors do not offer or dedicate funds for these purposes. Therefore, avoid looking for grants to cover your overhead expense.
5. When you need money fast
Sometimes your organization may need money fast to purchase something, for instance, a vehicle for the works in the organization. When you get one listed for sale at a great price. Time is vital to get it before someone else buys it. This is a time-sensitive need, and you need money fast. But, a grant is not the best way to fund the vehicle or any other thing you need that requires you to need the money fast to secure it. The main reason here is because grants take time. You need to write your grant proposal, ensure you meet the criteria, and wait for the funders to review your grant proposal before they make a decision, and it can take weeks or months. Even after you are approved, it still takes a month or two to receive the funds. So, avoid seeking grant funding, for they are not a fast source of revenue for an immediate need, so do not look for grants thinking you can get the money as fast as you expect.