Grant Fundraising Mythology

True-life, fairy-tale stories about life-saving (or organization-saving) grants abound. Richard Linklater received a $2,300 grant from a Texas-based nonprofit supporting independent film to complete Slackers, the film that established his career.

On the other end of the scale, Conservation International -- one of the largest conservation organizations in the world -- received a $261 million grant from the Betty and Gordon Moore Foundation for a range of special projects to protect biological diversity worldwide; this is the largest grant ever awarded to an environmental group. Such stories of a single grant that makes a dream project possible only lend power to a certain mythology around grant fundraising.

According to the myth perpetuated by the often money-strapped nonprofit community, the grant writer is the one person who can keep the organization afloat, or at least allow staff to embark on that next exciting project. However far from the truth this may be -- and in fact it is, since foundation grants account for only 12 percent of all charitable giving in the United States -- the myth persists each time a sizable grant is awarded to an organization.

So who gives out these mythic grants? For the most part, the primary focus of institutional fundraising is foundations, which are in fact another kind of legally recognized nonprofit organization established for the purpose of distributing funds to worthy causes. Like other nonprofits, foundations will have a governing board, usually known as the board of trustees, and an executive director or president, all of whom are usually involved in making decision about who to fund.

A lengthier description on the nature of foundations is provided elsewhere in this guide, but suffice it to say that while foundations vary in size and structure, most are established by wealthy individuals as a more formal mechanism for making philanthropic gifts. The aforementioned Gordon and Betty Moore Foundation is a good example of such a foundation; it was established by Gordon Moore and his wife out of the wealth he accumulated as the founder of Intel. Similarly, Bill and Melinda Gates have established a large foundation out of a portion of his Microsoft treasure chest.

For-profit corporations may also establish foundations through which they distribute a small percentage (usually no more than five percent) of their revenue. Two of the largest corporate foundations in the country are the Wells Fargo Foundation and the Verizon Foundation.

How Much do Nonprofits Really Rely on Grant Dollars?

Its closer to the truth to say that if a nonprofit organization relies solely on grant funding, its definitely in trouble. A small organization with a budget of $750,000 a year, for example, can easily slide into financial instability if a foundation decides not to renew a $100,000 grant (more than 13 percent of the organizations entire revenue). However, a grant writer is an essential part of any strong fundraising team and can play an important role for an organization beyond bringing in grant dollars.

A grant writer (also known as a proposal writer, foundation relations manager, or institutional giving officer) crafts funding proposals to convince grant-making institutions (referred to in the nonprofit community as funders, grant-makers, or grantors) to give money. In the simplest terms, a grant proposal describes a grant-seekers mission, programs, activities, and how much money the grant-seekers needs to undertake its work. The proposal may describe the grant-seeking nonprofit generally, or a specific project. A successful grant proposal also outlines all the compelling reasons why a grant-seeking nonprofit, and the work described in the proposal, makes a difference in the world.