Grant Research: Facts vs. Assumptions

When you need to find a grant-maker, or a set of grant-makers, to fund a specific program or project, the first step is to undertake primary research. You identify a list of potential grant-makers using an online database, such as GrantStation. This primary research, while incredibly important, is really only the first step when starting your research process, and the secondary research results in finding the best grant-makers to approach. 

The most productive grant research is fact-based. Instead of throwing requests at your list of potential funders, you have to dig deeper. This secondary research, which comes on the heels of primary research, is the process of determining which potential funders are your best bet. The information you uncover will be the groundwork for thinking through your strategic approach.

Your overall approach to each grant-maker is a combination of facts and assumptions. You make assumptions about who can give you what and when, but these assumptions are based on facts.

What Is Primary Research?

Primary research consists of using key search terms to identify an initial list of possible funders. This will include looking at all types of funders, making sure you meet their criteria and generating a list of funders to pursue. For example, if you’re a regional food bank and want to start a community garden, your key search terms might include hunger, nutrition, gardening, agriculture, etc. Let’s say you need to raise $25,000 to get the community garden off the ground this coming summer. 

To begin your primary research, you should review each grant-maker’s profile to see if their mission aligns with your community garden project. You are also looking to see if the financial support they offer makes sense for your given project. If they only give $1,000 grant awards, is submitting an application to them really the best use of your time? However, if they provide awards of up to $25,000, is it wise to ask them for the entire amount if you have no existing relationship with the funder? These are issues to consider.

Of course, you are also looking at eligibility. Perhaps they give in your county but seldom give in your community. That could be a red flag. On the other hand, maybe your community is their main focus — bingo, we have a winner!

And finally, check out their deadline for proposals.  If they accept proposals every quarter, this should fit into your project calendar. If their deadline just passed, and it is an annual deadline, you may want to set that funder aside.

Secondary Grant Research

Once you have reviewed all of this information, you should have a good working list of potential funders. Now is the time to begin your secondary research as you want to narrow that list to those funders that are the best fit for your project.

Secondary research consists of looking more closely at each funder you’ve identified so you end up with a list of the best possible sources. The sources you collected will be woven into your overall funding strategy. You now need to review each funder’s:

• application guidelines;
• annual report;
• grants awarded; and,
• IRS 990 (for nonprofit sources).

Application Guidelines

Reviewing the funder’s application guidelines is critical since you must confirm that your project fits these guidelines. For example, the guidelines may require matching funds, which might be impossible for you to secure before the deadline, so you should drop that particular funder from your list. Or you may find that they only fund collaborative projects, and though you don’t have a partner at present, you could develop a partnership to meet their guidelines.

The application process generally isn’t too complicated with private funders, but it can get time-consuming with government grant-makers. Once you review the application guidelines, you will better understand how each funder fits into your overall timeline and strategy.

Annual Report

If a private grant-maker publishes an annual report, take a few minutes to look it over. When you review the annual report, focus on the Executive Director’s or CEO’s opening statement because it will often give you a feel for what they have accomplished in the past year and where they will be in the next year. This information can provide a better idea of how your project fits their objectives. Take note of the language they use in their report, as you may want to mirror it in your application. In the case of corporations, you will often find a list of grantees in their corporate annual report posted on their website.

Grants Awarded

Some funders have a special section on their website that lists recently awarded grants. This list gives you a good indication of the types of organizations they are funding, the organizations’ locations, and the amount of the grant awards. You will glean a lot of information from reviewing this information. This will help you craft your own request. It can also be helpful to talk to one or two of their grantees that work in your field to get a sense of the “dos and don’ts” when working with a particular funder.

IRS Form 990 for Grant Research

IRS Form 990s are available on the IRS website. Access is free. You can search for specific funders and charities by either their name or EIN (employer identification number). Once you find the organization you are looking for, you will see copies of the filed IRS Form 990s. Another option to acquire the information is to directly ask the funder to email you a copy of their latest IRS Form 990.

The IRS Form 990 provides detailed financial information such as sources of revenue, a summary of an organization’s expenditures, and changes in net assets or fund balances. The IRS Form 990 also includes direct and indirect public support an organization receives. It will also outline the number of contributions it receives from federal, state, and local governments.

Most funders include details on their charitable giving for the previous year. You may find details such as their total annual giving and a list of grantees, their location, the amount given, and for what reason (e.g., general support, building funds, project support, etc.). This is in Part XV of the 990 and is typically on page 11. However, it might be later in the document or included as an addendum.

Check to see if the grants given match your funding priorities. This list may help determine if you should include a grant-maker in your funding strategy. Keep in mind that an organization’s financial information is more useful if examined over a more extended period. One year’s IRS Form 990 presents only a limited amount of data. We recommend reviewing the three most recent 990s to fully understand the funder’s priorities and programs.

Additional Website Review

If a funder still seems like a potential fit after reviewing their application guidelines, annual report and grants awarded list, then look around their website to get a sense of their mission, objectives, etc. 

The website might also provide an eligibility quiz to take or a pre-application form to fill out before applying for funding. Either of these can be helpful as a pre-screening tool. 

If the grant-maker publishes a blog, scan the topics they focused on in the past six months. As a result, you will indicate what they consider their top priorities. If you find a relevant post to your work, you might even include a quote from it in your proposal.

Stay Flexible!

Throughout the research process, it’s essential to stay flexible in your thinking and keep in mind these search tips. You want to consider multiple alternatives and entertain a range of scenarios. Your overall approach should be adaptable. You have to be able to make revisions as you go forward. A denial of a request may shift your approach, just as receiving an award will. And make sure you give as much thought when adjusting the strategy as you have to the initial development. For example, if you get a larger award than expected upfront, you will need to re-think your approach. You’ll have the best chance of success in your grant-seeking by staying flexible.

This spotlighted blog post is courtesy of Grant Station.