Should Your Nonprofit Go for a Government Grant?

Winning a competitive federal grant can boost an organization’s revenues and reputation. But the costs in time and resources can be high, both to apply for a federal grant and to report on results later. Dive into the process unprepared and an organization can quickly find itself underwater. 

Is your nonprofit ready to sink or swim in the federal grant seeking pool? Use the following criteria to audit your organization’s readiness to compete. 

Is your agency registered?  

Your nonprofit can’t compete if it isn’t registered. Registration is often complicated, requires multiple steps and a waiting period, and must be renewed annually. We recommend beginning the registration process six weeks prior to an application deadline. The following steps are required to apply for all federal grant opportunities:

  • DUNS Number:  Securing a Data Universal Number System (DUNS), or a unique number used to identify your organization, is the first step to registering in the federal grant systems. 
  • SAM.gov: Your nonprofit must have an active registration with the U.S. Government’s System for Award Management (SAM), to do federal business. 
  • Grants.gov: Register your organization with Grants.gov, where you can “find, apply and succeed” in relation to government grant opportunities.  

Also be sure to investigate any unique registration requirements of the specific federal funding agency. For example, several agencies including the Substance Abuse and Mental Health Services Administration require registration in a separate system called eRA Commons. Give yourself plenty of time to discover and take these additional steps.

Do you have the time and capacity to apply?

On average, there is only a six-week turnaround from the time a federal agency releases an opportunity to the time applications are due. This leaves a tight window to prepare an application and requires that organizations are ready to act immediately.

As soon as a federal opportunity is announced, begin by reviewing the RFP and making a list of the requirements. Assess what your team can realistically accomplish within the time frame. Can they assemble community partners and gather letters of support? Articulate a program model that addresses every aspect of the opportunity? Prepare other unique attachments, including budgets? Compose compelling narrative and upload in the online application system?

If the assessment reveals that the time is too tight to complete every step, but the funding opportunity is a strong fit and a high priority, consider what else can come off your team’s plate temporarily or if you can bring on an experienced federal grants consultant to help. If neither of those solutions are feasible, your best option may be to forego the opportunity rather than scramble to submit a poor or incomplete application.

Is your toolkit of standard materials ready?

Be prepared well before an opportunity is released by having a toolkit of core materials ready. The following items are standard attachments required of many federal grant applications:

  • Audited financial statements
  • Overall organizational budget
  • Program/project budgets
  • Bios, resumes, and job descriptions for key leadership and program staff

Have we collected data that can be measured and evaluated?

Collecting and evaluating measurable program outcomes is not just a requirement for federal grants, but an opportunity for your proposal to rise above the competition. You’ll want to demonstrate that a federal investment in your program will result in a significant return by achieving impactful results. Consider not only the outcomes you will achieve with a federal grant, but if your organization is prepared to demonstrate a history of success:  

  • Do we have a record of data collection, evaluation, and successful outcomes with this or another program? 
  • Do we have an internal structure in place for data entry, retrieval, and analysis?  
  • Does the program we intend to pitch have a compelling need and data (including outside reference/resources) to back it up? 
  • If required, are we prepared to engage an external evaluator to support the program’s evaluation? 

Can you demonstrate engaged partners and supporters?

Partnerships and community support for your program can be critical for reinforcing your organization’s preparedness and likelihood of success. Often, government agencies require letters of support or Memorandums of Understanding (MOU), which serve to demonstrate the organizations or individuals who will have an active role in your proposed program, and show who is willing to vouch for your program’s significance. 

Make a list of potential partners for your key programs and, where needed, develop a plan for forging new connections. While the guidelines for MOUs and letters of support vary across government agencies, consider the following sources to ensure you’re prepared to draw from a dynamic list:  

  • Current and potential new program partners
  • Philanthropic partners
  • Public officials who are familiar with and can stress the need for your work
  • Organizations or individuals who have benefited or will benefit from your work

Identifying and engaging partners and supporters, defining and requesting documentation of their planned participation, and obtaining signed letters or MOUs can be a lengthy process, so start this process well in advance of applying for a federal grant.

Do you have internal controls and accountability to manage a federal grant?

The work of applying for a federal grant is only the beginning. If you are fortunate to win a federal grant, next comes managing the extensive post-award requirements.

Federal grants have stringent reporting regulations and guidelines that must be followed to ensure funds are utilized effectively and ethically. To meet federal reporting requirements, your organization will be required to collect and report on financial, compliance, and project performance data. 

Answer these questions to determine if your organization has the capacity to stay afloat during post-award management: 

  • Do we have the right team in place to ensure successful program execution, financial management, and compliance? If not, what should that team look like?  
  • Can my finance staff devote the time to developing detailed financial analysis and progress reports and participate in annual audits?  
  • Can a current member of my team manage data collection, analysis, and reporting, including learning and utilizing the federal agency’s electronic grants management systems?
  • Who will manage the relationship with the federal grants management officer and program officer assigned to our grant (e.g. providing reports, addressing concerns, conducting site visits, and preparing for audits)? 
  • Does our financial management system allow separate management and tracking of federal funds? 

If you answered no to any of these questions, consider shoring up your readiness before you take on the heavy responsibility of a federal grant.

While seeking federal grants can be intensive, winning them can advance your organization in significant ways, making it worthwhile to take the steps that will ensure you are ready to jump in.

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