This is one the of most significant questions nonprofit organizations pose each year. As grant fund become available, most nonprofits develop a sense of entitlement throughout the year as if everyone should get a piece of the pie. However, based on the following statistics, your organization may want to change its focus.
• Foundations and corporations together gave almost $72 million to charities in 2014 which represented less than 25% of overall giving. See article.
• Individuals accounted for almost 72% of donations to charitable organizations in 2014.
So, which types of funding are better: grants or individual contributions? Although there is no easy answer, there is, in fact, a point to be made based on this data. If your organization is funded primarily through grants, your financial stream is not diversified enough. Some time and energy should be focused on developing a fundraising campaign to match grant funding. If you have the capacity to apply for an eligible grant, surely make the effort. However, if this is the extent of your organization’s fundraising agenda, as opposed to seeking out additional match funding or cultivating relationships with added program support, then you need to rethink your strategy.
It is estimated that there is an excess of $50 billion in grant funds available across the U.S. Why shouldn’t your nonprofit benefit? Listed below are just a few reasons to argue against grant funding as a sole source of nonprofit financial stability:
1. Your nonprofit organization has limited staff without any time to devote to researching proper types of grants. All too often, inexperienced organizations waste time and money applying for grants for which they do not qualify.
2. Government grants involve considerable documentation and reporting prerequisites. Some nonprofits may secure the funds, but are unable to meet the standards to maintain the award. Such negative publicly can be devastating for an organization should they have to return the funds.
3. Many organizations do not have the money to invest in a qualified grant writer. If you are familiar with the grant process, every detail is scrutinized. Numbers must be underscored with a specific length line and a dollar sign. If your organization is unable to secure an experienced grant writer, submitting applications can be fruitless and time-consuming.
4. Finally, the most significant issue is the reporting requirements and measurable outcomes needed for grant proposals. If your financial system is not accurate and transparent, obtaining grant funds can be next to impossible.
If your nonprofit organization lacks financial accuracy and transparency, WVC RubixCloud can help. We leverage advanced technology to assist nonprofits in gaining the financial clarity they need. As a result, applying for grant funding can be a painless process. Don’t be held back financially by your accounting function. Take a step in the right direction and download our whitepaper, “There Is Gold In Your Numbers” and learn how our services can be a game-changer for your nonprofit.