Westfield
Development
Corporation
Small Business
Book
Westfield Development
Corporation
Compiled by Paul Benson
Grants Development, Mayville, NY
27 East Main Street
Westfield, NY 14787
Phone 716.326.2200
Fax 716.326.2299
Email wdevcorp@cecomet.net
Internet
www2.cecomet.net/wdevcorp/
Table of Contents
Executive Summary
Introduction
The Myth of Grants for Businesses
How it Works: Process of Grant Procurement
Proposal Writing Tips
Proposal Writing
The
Letter Proposal
Grant Stewardship
The Business Plan
Contacts, Funders, Info and Links
Proposal
Development
Business
Information
Loan
and Venture Capital Info
Chautauqua
County Foundations
Research
Sites: Local to National
Helpful Organization
References
Executive Summary
This booklet is designed to be an
information resource and a functional tool for business people looking for
funding. The Westfield Development
Corporation is well aware of the needs of the community’s businesses and is
constructively seeking to inform as well as educate. The information provided below is an introduction to the vast
quantity of resources available. We
hope that as you use the document, you will provide feedback on its usefulness,
suggest new sources, report dead links and propose new ways to make the
document more valuable in the future.
This document is designed at two
levels. The first as a readable text
that acts as an information source. The
second form is as an interactive text with links to the internet. The document was produced in Microsoft Word
Office Professional XP. If viewed in
Word, the blue lettered words are links to internet sources. Clicking with the control key down on these
words will take you to the site cited in the text.
Introduction
The Westfield Development
Corporation has been organized this year into nine working committees. Each active member of the Westfield
Development Corporation is asked to sit on two committees along with other
community resource people, who are referred to as Associate members. It is the intent of this committee structure
to get more people actively involved in economic development and quality of
life issues that impact Westfield and the surrounding areas.
One of the Westfield Development
Committees is the Grants Committee. The Grants Committee has adopted the
following mission statement. “The Grants Committee of the Westfield Development
Corporation, in support of the general mission of the Corporation, will act as a
facilitator in pursuit of grant funding for individuals, organizations or other
Westfield Development Corporation Committees which will support economic
development of the Westfield Community and surrounding areas.”
The Grants Committee, working in conjunction
with the Westfield Development Corporation Executive Director, will act as a
lead agency for writing and obtaining grants, act as a resource for information
or guidance for an individual or organizations own grant writing efforts or act
as a liaison to connect individuals or organizations interested in pursuing
grant funding with appropriate grant writers or funding sources. The Grants Committee will also act as a
resource or liaison in pursuit of revolving loans and low cost loans for small
businesses. The Westfield Development
Corporation does not presently administer any of these loans, but does have
information on how and where to apply.
Anyone interested in obtaining
information on grant funding and alternative loan opportunities, or data to
support an existing grant writing effort, is urged to call the Westfield
Development Corporation Executive Director at 326-2200. The Grants Committee also has a web page
linked to the Westfield Development Corporation website which contains a host
of links and other grant/loan opportunity information. The WDC website is
located at www2.cecomet.net/wdevcorp/.
There is also a hard copy resource
guide available through the WDC office on how to prepare a grant along with
Westfield area specific data.
If you are planning on writing a
grant, are in the process of writing one or are interested in obtaining
information on revolving/low cost loans please feel free to contact the
Westfield Development Corporation for assistance.
The Myth
HOW CAN I GET A GRANT TO START OR EXPAND MY
BUSINESS?
Compiled by the NY Small Business Development Center
Research Network State University of New York, 41 State Street/SUNY Plaza,
Albany, NY 12246 Revised August 1999
Unless your business
involves the development of new technology or is a non‑profit
organization, it is difficult to find a grant to start or expand a small
business. A representative from the
Small Business Administration answered a few basic questions on this issue:
QUESTION: Are there any grants to start a business?
ANSWER No. Even though many publications and talk shows
publicize grants to small businesses there is only one grant available and that
is for research and development for technology based products and services for
the government. Even then, the process
is very competitive and involves preparing a detailed written proposal.
Certain
types of government grants are available to small businesses. These include "Small Business
Innovation Research" (SBIR) and "Small Business Technology
Transfer" (STTR) grants. Grants
from other agencies may also be available for new technologies, inventions, or
products. You can find information
about some of these government grants such as SBIR/STTR on the Internet at http://www.win-sbir.com/ Here a paragraph addressing these grants
from a Business Week article (cited below) by Karen Klein:
There are also some very restrictive,
difficult-to-obtain grants given to small businesses to research new
technologies for the government. “There is something called the Small Business
Innovative Research (SBIR) program that gives entrepreneurs up to $100,000 to
research an idea that’s considered promising and up to $1 million to create
products from it, if the research pans out,” says Phil Borden, director of the
Women's Enterprise Development Corp., a Long Beach (Calif.) nonprofit business
assistance center. “The problem is, the promising ideas have to do with things
like how to capture a satellite in orbit and repair it. The people who compete
with intricate, detailed proposals for these grants are experts in engineering
and science and have the brightest technology minds in the country. The notion that this kind of money is
available to folks off the street is a joke.”
QUESTION: Can I get grant money for my small
business?
ANSWER: There is no federal grant money for individual business
owners.
SBA
questions and answers taken from http://www.sba.gov/womeninbusiness/
Finding and
identifying government agencies that give grants for specific purposes or in
specific subject areas requires considerable time, effort, and research. Getting a grant is hard work. Don't be fooled by advertisements and
promotions that state that you can get "free money" just by asking
for it. It is an urban
legend.
There are
some Government grants available for businesses (but not to start a business).
For the most part, these grants are very specialized. In addition, many Government grants are not available
year-round. That is, you can’t apply
for most of them at any time you please—in general, you can apply for them only
when they are announced by a Government agency. When an agency makes funds available for a grant, it places an
announcement in the Federal Register
(http://www.access.gpo.gov/su_docs/aces/aces140.html) which is published each
weekday. Here's where you can find the Government's Most Recent Grant
Announcements (http://www.wifcon.com/todaysfa.htm).
Please take the time to
read these articles:
The Myth of Free
Government Money: A Perennial and Pernicious Scam
Why do so many entrepreneurs believe in the Tooth
Fairy? By Karen E. Klein
In Business Week at http://www.businessweek.com/smallbiz/0001/sa000111.htm
"Cash
Free" Grants? By Megan Beste from the Council on Foundations web site
at: http://www.cof.org/foundationnews/0900/cashfree.htm.
Scams Point the
Desperate to Nonexistent Assistance By Tamar Lewin, In the New York Times,
February 13, 2001 http://www.nytimes.com/2001/02/13/national/13SCAM.html
There is a
great deal of competition for grant funds.
To be successful in winning a grant, you must provide the funding agency
with a well‑written proposal that clearly states your objectives and sets
forth a plan and budget for your activities.
Grants are "free" in that you do not have to pay back the
money. However, if you are awarded a
grant you may be required to provide periodic progress, program evaluation,
and/or financial reports to the government or foundation.
If you are
looking for funding for an existing or new for‑profit business, you may
encounter difficulties in finding and getting grant funding. Government grants are generally (though not
always) given to non‑profit organizations for programs and services that
benefit the community or the public at large.
You can check the Catalog of
Federal Domestic Assistance for this type of information. There is a link
from the Research Network page at http://aspe.hhs.gov/cfda/index.htm
For more
information on funding for startups, visit the SBA's Web site at www.sba.gov. It features extensive information on
small-business loans and startup funding.
For information on venture capital, visit the Venture Capital Resource
Library, www.vfinance.com,
the Capital Network, www.thecapitalnetwork.com,
or
Garage.com, www.garage.com.
Grants from Non‑Government
Organizations
There are other types of
grants such as those from foundations, corporations, or private
organizations. Many non‑government
organizations provide grant funds but most of them have specific requirements
as to who is eligible to apply for and receive grant funding. By and large, foundations do not make
grants to for‑profit enterprises. If you are trying to start a for‑profit business, as
opposed to a not‑for‑profit entity, visit the business section of
your local public library. Your state's
department of economic development may also offer some resources.
A relatively
small number of foundations award program‑related investments (PRIs),
which most commonly are loans to for‑profit or nonprofit entities
for purposes closely related to a particular foundation's funding
interests. Program‑related
investments (PRIs) are investments made by foundations to support charitable
activities that involve the potential return of capital within an established
time frame. PRIs include financing methods commonly associated with banks or
other private investors, such as loans, loan guarantees, linked deposits, and
even equity investments in charitable organizations or in commercial ventures
for charitable purposes. The Foundation
Center sells a guide, Program‑Related' investments: A Guide to Finders
and Trends (1995); go to http://fdncenter.org
for more information about this publication.
Finding
Information About Grants
Two Foundation Center
publications that may be helpful in your search for grants are “Foundation
Grants to Individuals” and the “National Directory Public Charities”. Foundation Grants to Individuals includes
information about foundation giving for research and education, for personal,
living and medical expenses, and for individuals in the arts and sciences. In the National Directory of Grantmaking
Public Charities, look under "Grants to Individuals" in the Types of
Support index to find charities that give directly to individuals.
Although
there is a great deal of online information about federal funding programs, it
can be potentially overwhelming. Since
government funding programs and priorities change frequently, it is a good idea
to call the agency in question before applying for government funding in order
to obtain the most up‑to‑date information on its programs.
Information on state and municipal grants is often difficult to
find. Check with local government
officials and congressional offices to see what information they have. Federal funders generally prefer projects
that serve as prototypes or models for others to replicate; local government
funders require strong evidence of community support for a project. Though a fair number of individual awards
exist, the majority of government grants are awarded to eligible nonprofit
organizations, not to individuals. Government grants nearly always have stiff reporting
requirements. Careful record keeping is
a must, since an audit is always a possibility.
How It Works
The key to successful
grant writing effort is accurate information.
The
Process: There are four major steps in the development of successful
grants funding: a). a thorough search of available funding sources; b). a
detailed proposal specifying how the funds will serve the organization’s constituency;
c). an accurate grants tracking system; and, d). a sustained effort.
The
Documents: In order to succinctly research and then
write the proposals the following documents are necessary:
Description
of Project Needs, Goals and Objectives
Mission
Statement
History
of the Organization
Narrative
of Organization’s Objectives, Programs and Services
List
of Board of Directors with Affiliations, Contact Addresses, and Phone Numbers
List
of Organizational Administrators and Duties: Table of Organization
Constituency
and Area Demographics
List
of Potential Corporate Sponsors
Rendering
of Facility
Short
and Long Range Plans
Marketing
Reports (if available)
Annual
Report
Photos
of Activities
Project
Budget
Current
Organization Budget
Current
Grants or Endowments
Budget
Summary of Current Campaign
501(c)(3)
Nonprofit Determination Letter from the IRS
Copy
of Most Recent IRS Form 990
State
Charities Registration Number
Federal
Employee I.D. Number
The
People: The final component for solid proposals is access to key
administrative staff and board members for a continuous flow of
information. These individuals will
ensure the overall quality of information in the proposals and the probability
of their success.
Proposal Writing Tips
1.
When
seeking funding for a program start from you own strategic plan, what
activities will move you forward and what will they cost.
2.
Do
your homework, make sure you have identified, described and documented the need
for which you are seeking funding (include statistics when possible). Make sure to put this “problem statement”
near the beginning of your proposal.
3.
Do your homework some more . . . have an
understanding of the funder’s mission, funding priorities and geographical
preferences. Based on you program needs
and each funder’s interests, match your program with a prospective funder. Also understand the typical grant size given
by the funder.
4.
Understand the application process; get a
copy of their guidelines and deadlines for submission. Funders vary with their timelines and even
how they want to be contacted. This
sounds simple but if they have specific instructions – follow them to the
letter!
5.
Pay close attention to the appearance of the
proposal. Make sure your font is not
smaller than 12 point. Use
bold/underlined headings for new sections.
Your margins should not be less than one inch on all sides. Toss in a chart, graph or sidebar story once
in a while. In other words, try to make
the document user friendly. The
reviewer can’t help but have an “Oh No” reaction to a proposal with dense type
and narrow margins.
6.
Generally, most proposals start with a
one-page summary or project abstract page – this should tightly summarize your
case for support and proposal.
7.
Typically, a longer project narrative, goals
and objectives of the project, evaluation, budget and budget justification
page, follows the summary page. The
entire proposal should be about five, and no more than ten, pages unless the
funder guidelines permit a longer narrative.
8.
Include a one-page cover letter outlining
your agency or business, the proposal and the amount of funding you are asking
for. If possible have it signed by you
CEO or principal board officer.
9.
If your proposals are not accepted, send them
a thank you note or make a call – thanking the funder for the time spent
reviewing your proposal. Ask for any
shortcomings of the application, so that you might revise when applying in the
future or during the next round.
10.
If
your project is funded, follow up with a thank you, a six-month and 12-month
letter telling the funder how the money is being spent.
Proposal Writing
The Following is from the Foundation Center’s Short Course on Proposal Writing
Introduction
The
subject of this short course is proposal writing. But the proposal does not
stand alone. It must be part of a process of planning and of research on,
outreach to, and cultivation of potential foundation and corporate donors.
This process is grounded in the conviction that a
partnership should develop between the nonprofit and the donor. When you spend
a great deal of your time seeking money, it is hard to remember that it can
also be difficult to give money away. In fact, the dollars contributed by a foundation
or corporation have no value until they are attached to solid programs in the
nonprofit sector.
This truly is an ideal partnership. The nonprofits
have the ideas and the capacity to solve problems, but no dollars with which to
implement them. The foundations and corporations have the financial resources
but not the other resources needed to create programs. Bring the two together
effectively, and the result is a dynamic collaboration.
You need to follow a step-by-step process in the
search for private dollars. It takes time and persistence to succeed. After you
have written a proposal, it could take as
long as a year to obtain the funds needed to carry it out. And even a
perfectly written proposal submitted to the right prospect might be rejected for
any number of reasons.
Raising funds is an investment in the future. Your aim
should be to build a network of foundation and corporate funders, many of which
give small gifts on a fairly steady basis and a few of which give large,
periodic grants. By doggedly pursuing the various steps of the process, each
year you can retain most of your regular supporters and strike a balance with
the comings and goings of larger donors.
The recommended process is not a formula to be rigidly
adhered to. It is a suggested approach that can be adapted to fit the needs of
any nonprofit and the peculiarities of each situation. Fundraising is an art as
well as a science. You must bring your own creativity to it and remain
flexible.
Gathering Background
Information
The
first thing you will need to do in writing the master proposal is to gather the
documentation for it. You will require background documentation in three areas:
concept, program, and expenses. If all of this information is not readily
available to you, determine who will help you gather each type of information.
If you are part of a small nonprofit with no staff, a knowledgeable board
member will be the logical choice. If you are in a larger agency, there should
be program and financial support staff who can help you. Once you know with
whom to talk, identify the questions to ask. This data-gathering process makes
the actual writing much easier. And by involving other stakeholders in the
process, it also helps key people within your agency seriously consider the
project’s value to the organization.
Concept
It
is important that you have a good sense of how the project fits into the
philosophy and mission of your agency. The need that the proposal is addressing
must also be documented. These concepts must be well-articulated in the
proposal. Funders want to know that a project reinforces the overall direction
of an organization, and they may need to be convinced that the case for the
project is compelling. You should collect background data on your organization
and on the need to be addressed so that your arguments are well-documented.
Program
Here is a check list of the program information you require: the nature of the project and how it will be conducted; the timetable for the project; the anticipated outcomes and how best to evaluate the results; and staffing and volunteer needs, including deployment of existing staff and new hires.
Expenses
You
will not be able to pin down all the expenses associated with the project until
the program details and timing have been worked out. Thus, the main financial
data gathering takes place after the narrative part of the master proposal has
been written. However, at this stage you do need to sketch out the broad
outlines of the budget to be sure that the costs are in reasonable proportion
to the outcomes you anticipate. If it appears that the costs will be
prohibitive, even with a foundation grant, you should then scale back your
plans or adjust them to remove the least cost-effective expenditures.
Statement of Need: why this project is necessary 2 pages
Budget: financial description of the project plus explanatory notes 1 page
Conclusion: summary of the proposal’s main points 2 paragraphs
The
Executive Summary
This
first page of the proposal is the most important section of the entire
document. Here you will provide the reader with a snapshot of what is to
follow. Specifically, it summarizes all of the key information and is a sales
document designed to convince the reader that this project should be considered
for support. Be certain to include:
Problem — a brief statement of the problem or need your agency has recognized and is prepared to address (one or two paragraphs);
Solution — a short description of the project, including what
will take place and how many people will benefit from the program, how and
where it will operate, for how long, and who will staff it (one or two
paragraphs);
Funding
requirements— an explanation of the amount
of grant money required
for
the project and what your plans are for funding it in the future (one
paragraph); and;
Organization
and its expertise— a brief statement
of the name, history, purpose, and activities of your agency, emphasizing its
capacity to carry out this proposal (one paragraph).
The
Statement of Need
If
the funder reads beyond the executive summary, you have successfully piqued his
or her interest. Your next task is to
build on this initial interest in your project by enabling the funder to
understand the problem that the project will remedy.
The statement of need will enable the reader to learn
more about the issues. It presents the facts and evidence that support the need
for the project and establishes that your nonprofit understands the problems
and therefore can reasonably address them. The information used to support the
case can come from authorities in the field, as well as from your agency’s own
experience. You want the need section to be succinct, yet persuasive. Like a good
debater, you must assemble all the arguments. Then present them in a logical
sequence that will readily convince the reader of their importance. As you
marshal your arguments, consider the following six points.
First,
decide which facts or statistics best support the project. Be sure the data you
present are accurate. There are few things more embarrassing than to have the
funder tell you that your information is out of date or incorrect. Information
that is too generic or broad will not help you develop a winning argument for
your project. Information that does not relate to your organization or the
project you are presenting will cause the funder to question the entire
proposal. There also should be a balance between the information presented and
the scale of the program.
Second, give
the reader hope. The picture you paint should not be so grim that the solution
appears hopeless. The funder will wonder whether an investment in a solution
will be worthwhile. Here’s an example
of a solid statement of need: “Breast cancer kills. But statistics prove that
regular check-ups catch most breast cancer in the early stages, reducing the
likelihood of death. Hence, a program to encourage preventive check-ups will
reduce the risk of death due to breast cancer.” Avoid overstatement and overly
emotional appeals.
Third,
decide if you want to put your project forward as a model. This could expand
the base of potential funders, but serving as a model works only for certain
types of projects. Don’t try to make this argument if it doesn’t really fit.
Funders may well expect your agency to follow through with a replication plan
if you present your project as a model.
If
the decision about a model is affirmative, you should document how the problem
you are addressing occurs in other communities. Be sure to explain how your
solution could be a solution for others as well.
Fourth,
determine whether it is reasonable to portray the need as acute. You are asking
the funder to pay more attention to your proposal because either the problem
you address is worse than others or the solution you propose makes more sense
than others. Here is an example of a balanced but weighty statement: “Drug
abuse is a national problem. Each day, children all over the country die from
drug overdose. In the South Bronx the problem is worse. More children die here
than any place else. It is an epidemic. Hence, our drug prevention program is
needed more in the South Bronx than in any other part of the city.”
Fifth,
decide whether you can demonstrate that your program addresses the need
differently or better than other projects that preceded it. It is often
difficult to describe the need for your project without being critical of the
competition. But you must be careful not to do so. Being critical of other nonprofits
will not be well received by the funder. It may cause the funder to look more
carefully at your own project to see why you felt you had to build your case by
demeaning others. The funder may have invested in these other projects or may
begin to consider them, now that you have brought them to their attention. If possible, you should make it clear that
you are cognizant of, and on good terms with, others doing work in your field.
Keep in mind that today’s funders are very interested in collaboration. They
may even ask why you are not collaborating with those you view as key
competitors. So at the least you need to describe how your work complements,
but does not duplicate, the work of others.
Sixth, avoid
circular reasoning. In circular reasoning, you present the absence of your
solution as the actual problem. Then your solution is offered as the way to
solve the problem. For example, the circular reasoning for building a community
swimming pool might go like this: “The problem is that we have no pool in our
community. Building a pool will solve the problem.” A more persuasive case
would cite what a pool has meant to a neighboring community, permitting it to
offer recreation, exercise, and physical therapy programs. The statement might
refer to a survey that underscored the target audience’s planned usage of the
facility and conclude with the connection between the proposed usage and
potential benefits to enhance life in the community.
The statement of need does not have to be long and
involved. Short, concise information
captures the reader’s attention.
This
section of your proposal should have five subsections: objectives, methods,
staffing/administration, evaluation, and sustainability. Together, objectives
and methods dictate staffing and administrative requirements. They then become
the focus of the evaluation to assess the results of the project. The project’s
sustainability flows directly from its success, hence its ability to attract
other support. Taken together, the five subsections present an interlocking
picture of the total project.
Objectives
Objectives
are the measurable outcomes of the program. They define your methods. Your
objectives must be tangible, specific, concrete, measurable, and achievable in
a specified time period. Grantseekers often confuse objectives with goals,
which are conceptual and more abstract. For the purpose of illustration, here
is the goal of a project with a subsidiary objective:
Goal: Our after-school program will help children read better.
Objective: Our after-school remedial education program will assist 50 children in improving their reading scores by one grade level as demonstrated on standardized reading tests administered after participating in the program for six months.
The goal in this case is abstract: improving reading,
while the objective is much more specific.
It is achievable in the short term (six months) and measurable
(improving 50 children’s reading scores by one grade level). With competition for dollars so great,
well-articulated objectives are increasingly critical to a proposal’s success.
Methods
By
means of the objectives, you have explained to the funder what will be achieved
by the project. The methods section describes the specific activities that will
take place to achieve the objectives. It might be helpful to divide our
discussion of methods into the following: how, when, and why.
How: This is the detailed description of what will occur
from the time the project begins until it is completed. Your methods should
match the previously stated objectives.
When: The methods section should present the order and
timing for the tasks. It might make sense to provide a timetable so that the
reader does not have to map out the sequencing on his or her own....The timetable
tells the reader “when” and provides another summary of the project that
supports the rest of the methods section.
Why: You may need to defend your chosen methods,
especially if they are new or unorthodox.
Why will the planned work lead to the outcomes you anticipate? You can
answer this question in a number of ways, including using expert testimony and
examples of other projects that work.
The methods section enables the reader to visualize the implementation
of the project. It should convince the reader that your agency knows what it is
doing, thereby establishing its credibility.
Staffing/Administration
In
describing the methods, you will have mentioned staffing for the project. You
now need to devote a few sentences to discussing the number of staff, their
qualifications, and specific assignments. Details about individual staff
members involved in the project can be included either as part of this section
or in the appendix, depending on the length and importance of this information.
“Staffing” may refer to volunteers or to consultants,
as well as to paid staff. Most proposal writers do not develop staffing
sections for projects that are primarily volunteer run. Describing tasks that
volunteers will undertake, however, can be most helpful to the proposal reader.
Such information underscores the value added by the volunteers as well as the
cost-effectiveness of the project.
For a project with paid staff, be certain to describe
which staff will work full time and which will work part time on the project.
Identify staff already employed by your nonprofit and those to be recruited
specifically for the project. How will you free up the time of an already fully
deployed individual?
Salary and project costs are affected by the
qualifications of the staff. Delineate the practical experience you require for
key staff, as well as level of expertise and educational background. If an
individual has already been selected to direct the program, summarize his or
her credentials and include a brief biographical sketch in the appendix. A
strong project director can help influence a grant decision.
Describe for the reader your plans for administering
the project. This is especially important in a large operation, if more than
one agency is collaborating on the project, or if you are using a fiscal agent.
It needs to be crystal clear who is responsible for financial management,
project outcomes, and reporting.
Evaluation
An
evaluation plan should not be considered only after the project is over; it
should be built into the project. Including an evaluation plan in your proposal
indicates that you take your objectives seriously and want to know how well you
have achieved them. Evaluation is also a sound management tool. Like strategic
planning, it helps a nonprofit refine and improve its program. An evaluation can often be the best means
for others to learn from your experience in conducting the project.
There are two types of formal evaluation. One measures
the product; the other analyzes the process. Either or both might be
appropriate to your project. The approach you choose will depend on the nature
of the project and its objectives. For either type, you will need to describe
the manner in which evaluation information will be collected and how the data
will be analyzed. You should present
your plan for how the evaluation and its results will be reported and the
audience to which it will be directed. For example, it might be used internally
or be shared with the funder, or it might deserve a wider audience. A funder
might even have an opinion about the scope of this dissemination.
Sustainability
A
clear message from grantmakers today is that grantseekers will be expected to
demonstrate in very concrete ways the long-term financial viability of the
project to be funded and of the nonprofit organization itself.
It stands to reason that most grantmakers will not
want to take on a permanent funding commitment to a particular agency. Rather,
funders will want you to prove either that your project is finite (with start-up
and ending dates); or that it is capacity-building (that it will contribute to
the future self-sufficiency of your agency and/or enable it to expand services
that might be revenue generating); or that it will make your organization
attractive to other funders in the future. With the new trend toward adopting
some of the investment principles of venture capital groups to the practice of
philanthropy, evidence of fiscal sustainability becomes a highly sought-after
characteristic of the successful grant proposal.
It behooves you to be very specific about current and
projected funding streams, both earned income and fundraised, and about the
base of financial support for your nonprofit. Here is an area where it is
important to have backup figures and prognostications at the ready, in case a
prospective funder asks for these, even though you are unlikely to include this
information in the actual grant proposal. Some grantmakers, of course, will
want to know who else will be receiving a copy of this same proposal. You
should not be shy about sharing this information with the funder.
The
Budget
The
budget for your proposal may be as simple as a one-page statement of projected
expenses. Or your proposal may require a more complex presentation, perhaps
including a page on projected support and revenue and notes explaining various
items of expense or of revenue.
Expense
Budget
As
you prepare to assemble the budget, go back through the proposal narrative and
make a list of all personnel and nonpersonnel items related to the operation of
the project. Be sure that you list not only new costs that will be incurred if
the project is funded but also any ongoing expenses for items that will be
allocated to the project. Then get the relevant costs from the person in your
agency who is responsible for keeping the books. You may need to estimate the
proportions of your agency’s ongoing expenses that should be charged to the
project and any new costs, such as salaries for project personnel not yet
hired. Put the costs you have identified next to each item on your list.
Your list of budget items and the calculations you
have done to arrive at a dollar figure for each item should be summarized on
worksheets. You should keep these to remind yourself how the numbers were
developed. These worksheets can be useful as you continue to develop the
proposal and discuss it with funders; they are also a valuable tool for
monitoring the project once it is under way and for reporting after completion
of the grant.
A portion of a worksheet for a year-long project might look like this:
Item Description
Executive director
Supervision
10% of salary = $10,000
25% benefits = $ 2,500
Project director
Hired in month one
11 months at $35,000 = $32,083
25% benefits = $ 8,025
12 working 10 hours per week for three months
12 x 10 x 13 x $ 4.50 = $ 7,020
Office space
Requires 25% of current space
25% x $20,000 = $ 5,000
20% of project cost
20% x $64,628 = $12,926
With
your worksheets in hand, you are ready to prepare the expense budget. For most
projects, costs should be grouped into subcategories, selected to reflect the
critical areas of expense. All
significant costs should be broken out within the subcategories, but small ones
can be combined on one line. You might divide your expense budget into
personnel and nonpersonnel costs; your personnel subcategories might include
salaries, benefits, and consultants. Subcategories under nonpersonnel costs
might include travel, equipment, and printing, for example, with a dollar figure
attached to each line.
Support
and Revenue Statement
For
the typical project, no support and revenue statement is necessary. The expense
budget represents the amount of grant support required. But if grant support
has already been awarded to the project, or if you expect project activities to
generate income, a support and revenue statement is the place to provide this
information.
In itemizing grant support, make note of any earmarked
grants; this will suggest how new grants may be allocated. The total grant
support already committed should then be deducted from the “Total Expenses”
line on the expense budget to give you the “Amount to Be Raised” or the
“Balance Requested.”
Any earned income anticipated should be estimated on
the support and revenue statement. For instance, if you expect 50 people to
attend your performance on each of the four nights, it is given at $10 a
ticket, and if you hope that 20 of them will buy the $5 souvenir book each
night, you would show two lines of income, “Ticket Sales” at $2,000 and
“Souvenir Book Sales” at $400. As with the expense budget, you should keep
backup worksheets for the support and revenue statement to remind yourself of
the assumptions you have made.
Budget
Narrative
A
narrative portion of the budget is used to explain any unusual line items in
the budget and is not always needed. If costs are straightforward and the
numbers tell the story clearly, explanations are redundant.
If you decide a budget narrative is needed, you can structure it in one of two ways. You can create “Not