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Budgeting for Grants

Updated: Oct 6, 2023

I recently had a phone call with a long time client.

"Hey Dana! We just finished writing the budget for next year and we set an income goal of $680,000 in grants. I know we can do it!"

"Absolutely! Your mission is needed more than ever and your outcomes are amazing. How much more did you add to you expense column to pay for it?"


This is a typical conversation. Grants are FREE money after all, aren't they?

NOPE! THAT'S A MYTH - So let's address it!

What is the cost of grants anyway?!

According to research from the Association for Fundraising Professionals, US nonprofit organizations spend $0.20 received on grants. That's a 5:1 return on investment.

What goes into that cost?

The primary cost is time. Seeking, securing, and managing grants requires tremendous time. The less expertise you have in grant seeking, the more time these tasks will require.

Here are the common tasks:

  • Seeking Opportunities

    • Prospecting: This is searching databases or other sources for potential grantors. This takes time and grant professionals will review new opportunities daily.

    • Vetting: When an opportunity seems like a good fit, it can take hours to do the necessary deep dive. Who has received previous funding? Is your organization even eligible? What is the likelihood of getting funded based on the history of the grant?

    • Building a relationship: Fundraising is all about relationships -- and grants are a form of fundraising. Building a positive relationship with grantors is a key responsibility of a grant professional.

  • Securing the Grant: A foundation grant may take 20 hours to complete, while a government grant could take 100 hours or more. (Charity Science)

    • Creating a solid draft: The funder provides a document telling you what needs to be included in a grant application. The grant professional uses that information and creates a draft outline that lists those items. This becomes the framework for the proposal.

    • Collecting information: Very seldom does the grant professional have all the required information on hand. They have to spend many hours collecting information from program staff, the financial department, etc.

    • Approving the draft: Depending on the organization, there may be several approval levels required for the proposal. The grant professional manages that process and makes any needed/requested changes.

    • Submitting the proposal: The days of mailing an application are vanishing. Most funders have online portals that must be learned and used for submission. Just logging in and registering can take valuable time.

    • Follow up: Funders often circle back and request additional information. This is a good sign! It is the responsibility of the grant professional to respond to these requests or make changes.

  • Managing the Award: The grant is awarded! Now the real work begins.

    • Confirming the award: The grant professional ensures the award information is received and distributed across the organization. Funders often require the organization leader to review and sign a contract for the award. This is a document that must be returned to the funder and placed on file ar the organization.

    • Award Management: Large organizations often have a separate team for award management. Small nonprofits rely on the grant professional to ensure the award is managed appropriately. This includes monitoring the budget, tracking activities, measuring outcomes, and timely submission of funder requirements.

    • Continuation Grants: This is where the work start over. The grant professional ensures the previous grant is appropriately closed out while simultaneously seeking additional funding to continue the program(s).

WOW! Grants are a lot of work! And worth every penny of your investment.

You may be having trouble getting your team on board for adding grant writing as a line item on your budget. Come back to find out how you can advocate for your Grant Budget!



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