Hooray! So you won that hard-fought grant. You’ve celebrated, treated your office to a nice lunch, and now the reality of getting that grant starts to set in. To continue those programs this funding will support will take more money.
The Grant Advisors suggest you take a deep breath and begin planning for the next campaign.
Convincing a private funder to continue support for your organization isn’t as simple as getting it from the government, which often assumes continued success unless money is specifically limited to one year. Head Start funding is usually allocated for five-year funding chunks unless there is something very wrong with the program.
While the same criteria usually apply to follow-up funding requests, foundations have internal guidelines on whether a program deserves more money. Funders know when you are floundering or doing well. Here are early some key warning signs they look for.
1-Continual Failure to Meet Financial Projections: Some problems, especially with small nonprofits, are expected. Most small or new organizations have limited cash reserves and high uncertainty about timing and sources of revenue. However, reviewers are wary when annual operating deficits are called cash-flow problems. For a program officer, this may innitially appear in the form of consistently unrealistic budgets and frequent requests for advances. Any group that anually ends up with an operating deficit and has a cash-flow problem present a huge warning sign that it’s a project that probably should be terminated.
What the Applicant Should Consider: Was the original budget realistic in the first place? Once you’re stuck with an unrealistic projection, it’s hard to get out from under to make things work. How many times do you have problems meeting the costs of day-to-day operations? If you’re having problems, admit it, but don’t leave it at that. Is there a way you can demonstrate the steps you are taking to make sure problems don’t reoccur?
2-Disregard for the Original Proposal or Business Plan: Acritical indicator — when the grantee no longer refers to the proposal once the project gets funded, or when the budget and operating plan are abandoned at the first crisis. This often means the leadership has not thought through the project, financial projects and program goals may reflect nothing more than a wild guess, and/or there is little capacity in the organization to carry out the program.
What the Applicant Should Consider: Do progress reports and evaluations speak directly to the original goals and expectations? If you propose changing your project, have you shown a good reason why you are doing so? You can change your program’s goal or focus, but only as part of a process in which you indicate why you’re taking a new approach — which usually implies you’ve given your original idea a fair test — and how you’ll now measure success. The evaluation must measure criteria as specific as those originally proposed.
3-Founder/Director Conflicts: The skills to create an organization or program often are not the same as those needed to make operations run smoothly. In addition, founders often have trouble detaching themselves from their “babies” — acknowledging when something is not going right or taking responsibility for failure. Reviewers are alert for a founder who cannot designate authority to staff to do the things he or she may not be good at doing or who cannot accept responsibility when things go wrong.
What the Applicant Should Consider: Are management and program operations institutionalized or operated on an ad hoc basis? Is one person – say, the director — doing too much vis à vis proposed activities and the budget? How much oversight does the founder have over day-to-day operations, including the right to spend money?
4– Lack of Communication: Good communication within the organization and with donors is a key indicator of a healthy project. Project directors who are experiencing problems and not resolving them often do not communicate within their organization, let alone among donors. Emails that don’t get answered spell trouble.
What the Applicant Should Consider: Is the funder made aware of major staff changes? If the funder sends out a reminder that progress reports are due, does the applicant make an effort to acknowledge the communication? That’s a small point, but a revealing one. Do you have a quarterly “tickler file” to remind you to check in with the foundation? Do you send the funder copies of your newsletter or send regular progress reports to the board?
5-Inattentive Boards: Does the board have its eye on the ball? Just because the board has business people as members, reviewers don’t assume that their voices will be heard.
What the Applicant Should Consider: Does the board have program and financial review committees? A lack of board commitment or little involvement in the development of major proposals shows the board won’t be much help in solving any problems that arise later.