January 24, 2012

From {Centered}: When the foundation grant is less than you asked for

If you submit proposals to several foundations each year, sometimes you get good news and other times bad news. But what happens when you get good news and bad news simultaneously - when you got the grant, but it's for less than you requested?

How you deal with this scenario will have a long-term impact on your relationship with the grantmaker. So let's explore it from the perspective of several foundation executives. What has their experience been, and what do they expect their grantees to do in these circumstances?

I spoke with Kerry Anderson, President, True North Foundation; Dave Beckwith, Executive Director, Needmor Fund; Keith Burwell, President, Toledo Community Foundation; Lois DeBacker, Senior Program Director - Environment, The Kresge Foundation; Jon Jensen, Executive Director, Park Foundation; and Sam Passmore, Program Director - Environment, Charles Stewart Mott Foundation. Here's what they told me:

Initial stages of the grantmaking process
Four of the six foundations rarely, if ever, make grants for less than was requested in the proposal. This is because they negotiate the amount in advance with the prospective grantee either through a conversation or after a Letter of Inquiry (LOI) has been submitted. During these discussions they may determine whether there are other possible sources of support for the total amount the applicant needs for the project, and they may ask the applicant to lower the amount of the original request.

Some of these four will not bring a proposal to their board for an amount the board won't fund. Others tend to be flexible if they've had a long-term relationship with the applicant and know a great deal about the organization.

The other two foundations nearly always make grants for less than requested - even when they are enthusiastic about a proposal. This is because, although they are open to proposals from new groups, they get more requests each year, while the amount they can give stays static. If they have funded a group previously, they look at the historical precedent with that grantee and try to stay in the same general range.

In all cases, the foundation executives advise you never to ask for more than a foundation says is its maximum if its grant ranges are clear.

When the amount essential for the project is more than the foundation can support
Since none of these six foundations is likely to be the sole supporter of a project or organization for which a proposal is submitted, they will discuss the possible consequences for the applicant and for the project if the total amount needed is not obtained.

In the initial discussion, the foundation may challenge whether the group needs as much as proposed. Or it may ask the applicant to find additional sources of funding. In most cases, the foundation will help the applicant identify those sources. The prospective grantee may also be asked to scale back the goals of the project. If the foundation wants to support an organization or a project, such a discussion is unlikely to result in a decision not to invite the proposal.

One of the funders said that, in these conversations, "foundation staff's job is managing expectations." Even then they rarely ask a group to redraft a proposal, but they do point out the strengths and weaknesses of the proposal.

The funders that negotiate an amount to be requested will not forbid the applicant from asking for more, but they will not make any promises. If the request clearly is for partial support of a larger project, these funders often ask that the foundation's support not be tied to specific line items; instead they ask the applicant what they won't do if they don't get the total amount.

As one foundation executive said, "The grantseeker needs to have a clear, compelling, and reasonable rationale for the amount requested - if they ask for a larger amount assuming it will be reduced, it weakens their case."

After the grant is made 
The foundation executives I spoke with were very clear about what they do and don't want from a grantee organization that gets less than it requested.

What they expect you to do:

  • Listen to what foundation staff say and send updates on progress with the project. 
  • Develop a relationship with the program officer. 
  • Adjust your goals or seek funding from other sources. 
  • Show how you will make the project happen, and ask for help if you need it. 
  • Inform the foundation if grants expected from other funders don't come through; then discuss how you might change the scope of the project or whether the funder could help you find other foundation support. 
  • Do as much as possible with the resources available and seek funds from other sources. 
  • Let the foundation know if you need to make significant changes to your project. 

What you should never do:

  • Ignore the fact that you got a smaller grant. 
  • Say - if the difference is significant - that even with the lesser amount, you can still do everything you had originally planned to do. 
  • Kill yourselves trying to produce results with insufficient resources. 
  • Wait until the end of the grant period to tell the foundation that you couldn't accomplish the grant purposes for lack of money. (Foundations don't like surprises!) 
  • Whine or give up on the project. (Don't blame the foundation for your failure.) 
  • Use the grant for other purposes. 

None of the foundations want to set their grantees up to fail. They want the projects they fund to be sustainable, and they're willing to help their grantees find other foundation support. But, without timely and honest communication from you, they can't help you either restructure your project or obtain the other grants you need to fully complete it.

So don't shoot yourself in the foot if you get a foundation grant that's for less than the amount you requested. Instead, use this as an opportunity to build a stronger long-term relationship with the foundation.

Jim Abernathy is a consultant to nonprofit groups and to other organizations on general management, board and staff leadership issues, coalition-building, and grantmaking. He has worked in the field of nonprofit management for over 35 years and was the founding Executive Director of the Environmental Support Center.

Source: {Centered} January 2012 - Volume 5, Issue 1 © 2012 The Grantsmanship Center, Inc. All rights reserved. www.tgci.com

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