Chapter 42. Getting Grants and Financial Resources | Community Tool Box

Community work often comes with significant financial pressures. Organizations may have ambitious goals while struggling to sustain existing programs. Staff may be underpaid, workloads may be difficult to sustain, necessary programs may be reduced because resources are limited, and some organizations may face uncertainty about whether they can continue operating.

Sound familiar? The question in this section is: How can organizations reduce these risks? And, if financial instability is already affecting your organization, what can you do to strengthen its long-term sustainability?

Securing and sustaining financial resources is not a process reserved for specialists. Staff members, board members, volunteers, community partners, and others can learn to participate in resource development. With planning, appropriate skills, relationships, and sustained effort, organizations can build a stronger financial foundation for their work.

However, financial sustainability rarely happens effectively without planning. "If we need it, it will come" is not a reliable strategy. Organizations sometimes begin important work with the intention of figuring out the funding later, only to encounter financial strain, difficult choices, or unsustainable commitments.

In this section, we'll look at the basics of planning for the financial sustainability of your organization. We'll discuss what financial sustainability means, why it matters, and how to plan for it. Finally, we'll close with some practical lessons from people with experience doing this work.

What is a plan for financial sustainability?

A financial sustainability plan is a tool for helping an organization or initiative - and, more importantly, the goals and community priorities it supports - remain viable over the long term.

A financial sustainability plan is not just about raising money. Funding will probably be an important part of the plan, and organizations may obtain resources through donations, grants, public funding, fees for services, contracts, or other sources.

But money is not the whole story. A financial sustainability plan can also identify other resources, such as in-kind support, volunteers, shared staff or facilities, partnerships, donated equipment, technical assistance, or opportunities for another organization to assume responsibility for an activity or program when that makes sense.

A simple rule to go by: If a resource helps sustain your organization or its work, and you otherwise would have had to pay for it, it may be appropriate to include that resource in your financial sustainability plan.

Like other organizational plans, a financial sustainability plan includes objectives, strategies, responsibilities, timelines, and action steps for securing and sustaining resources. These elements should be made as concrete as possible.

For example, a partial list of what your plan will probably include:

• A list of the resources, activities, and needs required to carry out the work
• The amount or level of resources required to sustain each item
• Current resources
• Additional resources required
• Potential funders, partners, supporters, or other resource sources
• The amount or type of support that may be requested from each source
• How support will be requested, by whom, and when

Your plan should consider both short- and long-term sustainability. It may address what your organization needs six months from now as well as where you hope the organization and its work will be several years in the future.

It is also important to remember what a financial sustainability plan is not. Financial sustainability supports your mission; it is not the mission itself. The purpose of securing resources is to make it possible to continue doing meaningful work.

Planning for financial sustainability is therefore one part of sustaining your organization, initiative, or community work as a whole. It can help create the stability needed to focus on priorities such as improving health, strengthening neighborhoods, supporting education, advancing equity, building community connections, or pursuing other organizational goals.

Pay careful attention to finances, but keep funding decisions connected to your organization's mission, values, community commitments, and intended impact.

Why should you complete a plan for financial sustainability?

Developing a financial sustainability plan takes time and effort, particularly for organizations whose staff and volunteers are already managing substantial responsibilities. A clear plan, however, can help reduce uncertainty and make resource development more intentional.

By developing such a plan, your financial position may become more secure, which can support:

• Greater focus on your mission. With more stable resources, staff and volunteers can spend more time on the organization's purpose and less time responding to immediate financial crises.
• Stronger organizational capacity and stability. Adequate resources can help an organization hire enough qualified staff, provide fair compensation, invest in training and professional development, maintain necessary infrastructure, and carry out its work effectively.
• Easier transitions. A sustainability plan can help an organization prepare for changes when a grant ends, a contract changes, costs increase, or another source of support becomes unavailable.
• Meeting funding or organizational requirements. Some funders require a financial sustainability plan as a condition of support. Having an existing plan can help an organization respond more effectively to such requirements.

When should you develop a plan for financial sustainability?

It's never too early to begin planning. If your work requires resources and is intended to continue over time, financial sustainability should be considered from the beginning rather than only after funding becomes uncertain.

Organizations that have been operating successfully for some time should also review their sustainability plans periodically. An annual review, or another schedule appropriate to the organization, can help determine whether assumptions, costs, funding sources, and priorities have changed.

If your organization's financial condition is already unstable or moving in an unsustainable direction, a more comprehensive review of the plan may be necessary.

How do you plan for financial sustainability?

Every organization is different, and its financial sustainability strategy should reflect its mission, community, scale, resources, structure, and circumstances. For many organizations, however, a process like the following can provide a useful starting point. Adapt it to fit your needs.

Before developing your plan, think carefully about what financial sustainability actually requires. If an initial grant was for $100,000, for example, don't automatically assume you need another $100,000 the following year. Review what the funding accomplished, what the community and organization need now, and whether activities should continue in the same form. Some programs may need to expand, some may need to change, and some may be more appropriately sustained by a partner organization.

Also consider how different funding strategies may affect your organization, its accessibility, and its relationships with the community. For example, could a high membership fee create financial barriers to participation? Could a new facility or funding model unintentionally make some community members feel that the organization is less accessible to them? Could requirements attached to funding conflict with your mission, community priorities, or organizational values?

The lesson is to think broadly about both resources and consequences from the beginning. With that in mind, let's look at a step-by-step approach to developing a financial sustainability plan.

Decide who will develop the plan

If you have developed a financial sustainability committee, that group may take primary responsibility for the plan. If not, consider creating a committee or temporary working group. Board members, staff members, and people with financial or fundraising knowledge may be important participants. Depending on the organization, it may also be helpful to include people with direct knowledge of programs, participants, community priorities, and partnerships. Shared leadership can make the planning process stronger and reduce dependence on one person.

Let people know what you are doing

Keep relevant staff members, board members, funders, partners, and others affected by the plan informed about the process. They may have information, concerns, ideas, or opportunities that the planning group has not considered.

Open communication can also strengthen trust and reduce uncertainty. Financial decisions often affect programs, staffing, partnerships, and community commitments, so people should understand what is being considered, why decisions may be necessary, and how they can contribute relevant information or feedback.

Conduct an internal financial review

Identify the resources, obligations, revenue, and expenses your organization currently has. You need to understand your current financial position before deciding where you are going. Consider:

• How much money and other financial resources you currently have
• How much revenue you reasonably expect in the coming year and, where possible, in later years
• Where those resources come from
• How resources are currently allocated among programs, staffing, operations, and other needs
• What debts or other financial obligations the organization has

Much of this information may already be available in your annual budget or other financial records. Review those materials and make sure the information is current and understood by the people developing the sustainability plan. If your organization does not yet have a written budget, developing one should be an early priority.

Determine how much money you need

This step builds on the financial review. Consider what resources are necessary to sustain the organization's essential work and what adjustments might be possible if funding were reduced. The purpose is not simply to cut costs, but to understand what is necessary to maintain responsible operations and protect the most important elements of your mission.

This step has two parts: identifying activities that are essential to your mission and estimating the full cost of those activities, along with the organization's general operating costs.

What you are currently doing

Make a list of what your group is currently doing that is:

• Essential to your mission and community commitments
• Appropriate for your organization to carry out

What is essential may not always be obvious, and people involved in the work may reasonably have different perspectives. For example, if an organization is working to reduce pregnancies among adolescents, it might consider whether an after-school program that provides supportive activities, mentoring, relationships, and connections to resources is an essential part of that strategy.

Decisions about what is essential should be made thoughtfully and, where appropriate, with input from staff members, participants, partners, and community members affected by the work. Labeling something "non-essential" for purposes of calculating a minimum operating budget does not necessarily mean that it should be eliminated. The goal is to understand the minimum resources needed to sustain the organization's most central responsibilities.

The second question - whether an activity is something your organization itself should carry out - is equally important. Some activities may be essential to achieving a community goal but may be more effectively or sustainably provided through a partnership with another organization that already has relevant expertise, infrastructure, or relationships.

For example, a neighborhood revitalization coalition may identify access to employment opportunities as an important priority. Rather than creating and operating its own job training program, the coalition might partner with a community college, workforce development organization, or youth employment program that already has relevant expertise and infrastructure. The coalition can still help shape the effort so that training reflects residents' goals, local employment opportunities, and barriers to participation.

Before completing your list of essential activities, make sure it reflects what the organization truly needs to sustain its mission and commitments. Additional activities can be added or expanded as resources become available.

What each of these things costs

Estimate the full cost of continuing these activities. Include program expenses as well as staffing costs, compensation, benefits where applicable, training, accessibility needs, technology, evaluation, and other resources required to carry out the work responsibly.

Organizations also have costs that are not tied to one particular program, such as rent, utilities, insurance, technology, communications, accounting, administration, and other shared operating expenses. Include these costs when estimating the resources required for sustainability.

Decide how much money and other resources you want

After determining the minimum resources needed for core operations, consider what additional resources would allow the organization to strengthen or expand its work.

Think about your long-term goals. If adequate resources were available, what could the organization do differently or more effectively? What community priorities could it address? What investments would strengthen quality, accessibility, equity, staffing, partnerships, or infrastructure?

Seek ideas beyond the financial planning group. Talk with staff members, participants, community members, partners, board or advisory members, and others with relevant knowledge about where they believe the organization should go and what resources would support that direction.

Even without adding new programs, the organization may need resources for technology, equipment, accessibility improvements, staffing, professional development, evaluation, communications, facilities, or other organizational needs. Include these resource priorities as well.

Make these goals concrete. What resources would be required? Would you need additional staff, staff with specialized training, new technology, expanded facilities, transportation support, interpretation, or another form of capacity? Estimate the cost and timing of each priority over a realistic planning period.

Compare the amounts set out in the previous three steps

Compare your current resources, minimum operating needs, and longer-term resource goals. How large are the gaps? What financial and other resources would be needed over the next several years to maintain essential work and pursue priority goals?

Set objectives

Using the information you have gathered, decide which funding and resource objectives are realistic and appropriate to pursue.

If your organization already has most of the resources required for its goals, objectives may focus on maintaining those resources, strengthening reserves, replacing expiring funding, or making selected investments.

If there is a large gap between current resources and your longer-term goals, prioritize rather than spending so much time on fundraising that the organization's core work suffers. Consider which goals are most important, feasible, and aligned with community priorities at this stage.

From these choices, establish specific short- and long-term financial objectives. A short-term objective might involve securing funding for two additional positions. Longer-term objectives might include developing an operating reserve, endowment, multi-year funding relationships, or more stable facilities.

Consider the available possibilities

Brainstorm potential funding and resource strategies.

What are different ways to obtain resources that make sense for your organization?

• Sharing positions, facilities, equipment, or other resources with partner organizations
• Becoming a line item in an existing public or organizational budget
• Integrating activities or services into organizations with compatible missions
• Applying for grants
• Using existing personnel and organizational resources more effectively
• Soliciting in-kind support
• Conducting fundraising activities
• Using third-party reimbursement or other appropriate funding mechanisms
• Developing an equitable fee-for-service structure when appropriate
• Securing public funding or tax-supported revenue
• Developing endowments, planned giving, or other long-term giving arrangements
• Establishing membership fees or dues while considering affordability and access
• Developing a business or earned-income plan
• Developing a mission-aligned earned-income or social enterprise strategy when appropriate
• Transitioning appropriate programs or activities to partner organizations that can sustain them

Another way to look at it: Finding resources through partnerships

Many of the strategies above can be pursued directly by your organization. Community organizations also frequently work with public agencies, schools, businesses, funders, coalitions, and other partners toward shared goals. Different organizations may have access to different funding streams, facilities, staff expertise, relationships, or other resources that can support collaborative work.

For example, a community violence-prevention initiative may partner with public agencies, schools, health organizations, neighborhood groups, or other organizations that have access to funding or resources the initiative itself cannot obtain. A school district or health agency may also have resources related to substance use prevention or youth well-being. Any shared funding arrangement should have clear roles, expectations, accountability, and agreement about how resources will support the shared purpose.

What partnership possibilities exist in your community?

Decide which funding possibilities you will follow up on

Now, consider which possibilities make the most sense for your organization. Questions that might help shape your decision include:

• Which approaches are feasible with our current capacity?
• Which possibilities have a reasonable likelihood of success?
• Which approaches fit the skills, interests, and strengths of the people involved?
• How might each funding strategy affect what we do, whom we serve, and how we operate?
• Which approaches are most consistent with our mission, values, community commitments, and long-term goals?

Strategize how to secure the resources you need

Who will you need to work with to implement your funding strategies? What shared goals or interests could support a partnership? What value does the proposed work create for the community, for partners, and for potential funders?

Funders and donors make decisions based on many factors, including mission, community priorities, expected impact, evidence, relationships, public benefit, organizational capacity, and their own funding strategies. Understanding those priorities can help you identify where genuine alignment exists.

The goal is not to reshape your organization simply to satisfy a potential donor. Instead, understand what funders support, communicate clearly how your work aligns where it genuinely does, and avoid funding arrangements that would compromise your mission, community accountability, ethics, or organizational priorities.

Foundations and other funders usually provide guidelines explaining their priorities, eligibility requirements, timelines, and application procedures. Read and follow those guidelines carefully. Understanding funder expectations can help you decide what to request, how to frame the request accurately, and whether the funding opportunity is a good fit in the first place.

Develop a timeline

The timeline should identify the actions to be taken, when they should occur, and who is responsible for carrying them out.

Develop a draft of your plan

This draft should incorporate the information you have compiled so far, including:

• Your current financial situation, including your annual budget
• Your short- and long-term financial goals
• The broad strategies you will use to pursue those goals
• A timeline with specific actions and responsibilities
• A one-page executive summary at the beginning of the document summarizing the major points
• The executive summary should provide a concise overview of the organization's current financial position, goals, strategies, and major actions so readers can understand the plan before reviewing the details.

Incorporate feedback on your plan

Once you have a draft, invite feedback from groups with relevant knowledge or a stake in the plan. Depending on your organization, these may include:

• Staff members
• Board members
• Participants, people using services, or community members affected by the work
• Community partners and leaders
• Current funders and other relevant resource partners

Feedback can strengthen the plan by identifying unrealistic assumptions, overlooked needs, unintended consequences, or additional opportunities. People who will be responsible for implementing or affected by the plan may also have information that the planning group does not.

Meaningful involvement can also strengthen understanding and shared investment in the plan. When people have opportunities to contribute to decisions that affect their work or community, they are more likely to understand how those decisions were made and how they can participate in implementation.

When asking people to review financial information, explain the numbers clearly and provide enough context to interpret them. A large organizational budget, for example, may include salaries, benefits, facilities, insurance, program costs, technology, transportation, contracted services, grants to partners, and many other expenses. Staff members may reasonably have questions about compensation or proposed program reductions, and those questions should be addressed transparently rather than dismissed as misunderstandings.

Similarly, debt or a projected deficit should be explained in context so that people understand the organization's actual financial position, risks, and plans. After stakeholders have had an opportunity to comment, the planning group should review the feedback, revise the plan where appropriate, and communicate how significant concerns or suggestions were addressed.

Implement your plan

Once the plan has been reviewed and revised, begin carrying out the agreed-upon actions and responsibilities.

Monitor and evaluate your progress

Implementation is not the end of financial sustainability planning. Continue monitoring revenue, expenses, funding risks, progress toward objectives, organizational capacity, and changes in community or program needs. Adjust the plan when circumstances change or when strategies are not producing the intended results.

Remember: planning is ongoing. Financial sustainability plans should evolve along with the organization, its community, available resources, and the environment in which it works. Resource development is no exception.

Tips from the field

Financial sustainability can be challenging. The following lessons can help organizations approach the work more intentionally:

• Build and maintain relationships, stay informed about community and funding developments, and participate in relevant networks.
• Identify someone, or a small team, responsible for monitoring potential funding and partnership opportunities and sharing relevant information with the organization.
• If resources allow, consider hiring or contracting with an experienced grant writer or resource-development professional. If that is not possible, seek review and guidance from someone with relevant grant-writing and subject-matter experience.
• If your organization does not yet have the legal or administrative structure required to receive certain grants, an established tax-exempt organization may sometimes serve as a fiscal sponsor or lead agency, depending on the circumstances.
• If you enter such an arrangement, establish roles, responsibilities, decision-making authority, financial procedures, administrative costs, reporting requirements, and benefits to each organization in advance.
• Funding opportunities often have short timelines. Maintaining relationships with potential funders and partners and having well-developed program ideas, budgets, and action plans can help your organization respond when appropriate opportunities arise.
• Build appropriate relationships with elected officials and policymakers so they understand the community issue, relevant evidence, and the importance of the work.
• Diversify funding and other resources so the organization is not overly dependent on a single source of support.
• Maintain continuity in your mission, values, relationships, and commitments while remaining willing to adapt strategies as community priorities, evidence, staffing, and circumstances change. Avoid making the organization's sustainability dependent on one person, one funder, or one way of doing the work.

Some of these tips have been adapted from The Spirit of Coalition Building.

In Summary

Developing a financial sustainability plan takes time and ongoing attention, but it is an important part of sustaining an organization or initiative. A strong plan connects financial decisions to mission, community priorities, staffing needs, organizational capacity, partnerships, and long-term goals.

Financial sustainability is not simply about raising as much money as possible. It involves understanding what resources are needed, identifying diverse and mission-aligned ways to obtain them, making informed choices about priorities, involving people affected by those choices, and regularly adjusting the plan as conditions change. Done well, financial planning can give an organization greater stability and allow more attention to remain focused on the work and community outcomes that resources are meant to support.

Example 1: Interview with Tom Wolff

Tom Wolff, former director of AHEC/Community Partners in Amherst, MA, is considered a national expert on community coalitions. Here, he discusses his ideas on how a coalition can be sustainable over the long term.

"Generally, people think about sustainability at the point at which their grant is a year from ending, at best, often three months. And they say, 'What we need now is to replace the 1.2 million, hundred twenty thousand, forty thousand dollars,' - whatever it is their grant was. They say financial sustainability is replacing that money and continuing to do what we're doing. That's the general thinking, and it's erroneous. It really is a status quo way of thinking of sustainability.

"You have to ask yourself, what have we been doing, what is worth maintaining, and how do we maintain that. One of the ways of doing that is by institutionalizing the effort. That is, you do a curriculum on domestic violence prevention and after your first year of doing it, the schools, the YMCA, or the shelter pick it up. They find a way to get a state grant or something but they keep doing it and so you've institutionalized it into some more formal part of the community. This is the most successful way of doing it, 'cause it means it will keep going.

"The second way to be sustainable is you create policy change. They recently did a policy in the courts in Massachusetts that requires all divorcing couples to go through a course on the impact on kids before you divorce. So, if you had been doing a prevention program on trying to limit the negative effects of divorce on children, you get the courts to make this mandate. You've now created a policy that will institutionalize this program.

"The third way to be sustainable is really to turn to the community and to strengthen the community in their capacity to solve the problems. This is the idealistic community development approach. I think it's the hardest and longest term, but I think it's a goal that's worth achieving.

"But generally, when people talk about sustainability, they're not thinking about any of those three. They're thinking about incorporating, getting the cash, and continuing to do what they are doing using the money. All this has a place, but only has it after you've asked yourself some questions about the other three.

"The way you should develop sustainable coalitions is when you get your funding, think about what your goals are, and how you're going to sustain your work.

You think at the beginning of a coalition what is that you're trying to do and how would you sustain the pieces of what you're trying to do over time. You don't think about it just in terms of money."

Example 2: Example internal audit sheet

This is the example of an internal audit for a teen pregnancy prevention project in the Midwest. The group had been awarded a four year grant and had obtained significant commitments from the community for funding over the next five years. This is the audit their group came up with, based on their action plan and expected expenses.

Thanks to Chris Hampton, Jacquie Fisher, and Adrienne Paine-Andrews for their work on the development of this example.

 Internal Audit Sheet

	Year 1	Year 2	Year 3	Year 4	Year 5
Amount of Funding
Funding from Source 1: Foundation Grant	$77,750	$77,750	$77,750	$77,750	grant ends
Funding from Source 2: Health Department	$21,125	$21,000	$20,500	$20,125	$20,000
Funding from Source 3: Community organization	$18,125	$18,000	$18,500	$18,500	$18,500
Funding from Source 4: School District	$15,625	$16,700	$17,950	$17,105	$18,310
Funding from Source 5: Area churches	$4,250	$4,200	$4,500	$4,000	$4,000
Total of funding from all sources	$136,875	$137,650	$139,200	$137,480	$60,810
Amount of expenses
Staff #1: Project Director, 100%	$37,500	$38,000	$38,000	$39,000	$39,500
Staff #2: Administrative Assistant, 50%	$11,250	$11,500	$11,500	$12,000	$12,250
Staff #3: Outreach Coordinator, 75%	$25,000	$25,300	$25,300	$25,900	$26,200
Staff #4: Outreach Coordinator, 75%	$25,000	$25,300	$25,300	$25,900	$26,200
Staff #5:	--	--	--	--	--
Total Personnel Costs:	$98,750	$100,100	$100,100	$102,800	$104,150
Program #1: Graduate Teacher training	$22,875	$22,875	$22,875	$22,875	$22,875
Program #2: Baby Wait a While high school program	--	--	$1,500	$1,500	$1,500
Program #3:	--	--	--
Total Program Costs:	$22,875	$22,875	$24,375	$24,375	$24,375
Travel	$2,500	$2,500	$2,225	$2,225	$2,225
Equipment	$2,000	$1,000	$500	$500	$500
Supplies	$2,000	$2,500	$2500	$2,500	$2,500
Printing	$2,000	$2,000	$2,125	$2,125	$2,125
Media/publicity	$3,000	$3,000	$3,250	$3,250	$3,250
Phone/fax	$1,000	$1,000	$1,125	$1,250	$1,250
Postage	$500	$500	$750	$750	$750
Miscellaneous	$2,250	$2,000	$2,000	$2,000	$2,000
Rent/housing	n/a	n/a	n/a	n/a	n/a
Utilities	n/a	n/a	n/a	n/a	n/a
Amount paid on debt	n/a	n/a	n/a	n/a	n/a
Total of all expenses:	$136,875	$137,475	$138,950	$141,775	$143, 125
Expected deficit or surplus:	0	+ $175	+$250	-$4,295	-$82,315

Example 3: Example Timeline

Nashua Literacy Coalition Timeline for Developing Funding Possibilities 

Goal	Action Steps to Meet Objective	By whom	By when
Renew current grant (current grant ends 6/2014)	Write a new proposal that takes into account the foundation's new emphasis on community collaboration	Jeannie, Marcelo, Robin, with input from area churches, schools, shelters, the library, and Head Start	12/2013
	Edit proposal	Board of Directors	2/2014
Develop a fee-for-service tutoring program for high school students who will be taking standardized tests	Look into the legal consequences of a fee-for-service program	Leslie (a lawyer on the Board)	8/2013
	Decide fee scale, logistics	Rashma, Jeannie	9/2013
	Train literacy tutors for this type of tutoring	Robin	10/2013
	Market program at area schools	Tanisha	11/2013 and continuing
Work with other organizations in town to do some of the literacy work	Meet with heads of area organizations to suggest the idea	Jeannie	10/2013
	Train staff and volunteers of interested groups as tutors for literacy	Robin	11/2013 and continuing
Ask city to pay for base costs as part of annual budget	Meet with council members, discuss possibilities	Jeannie with help from the Board	3/2014

Examplel 4: Executive Summary

Daleton Crisis Assistance Center:

Plan for Financial Sustainability - Executive Summary

Current situation

The Daleton Crisis Assistance Center (DCAC), now in it's twelfth year, currently has an annual budget of $260,000. That amount can be broken down as follows:

• $100,000 comes from the local University
• $50,000 comes from the United Way
• $50,000 from a grant from the Dinkerston Foundation
• $25,000 from a grant from the Cuassa Foundation
• $25,000 (total) from area churches
• $10,000 (approximately) from our annual membership drive

Expenses for the center are as follows:

• $168,750 for staff costs (5 full time staff, 3 part time)
• $24,000 for rent and utilities
• $30,000 office/miscellaneous (e.g., equipment, travel, supplies, publicity, communications )
• $30,000 program costs (Community Crisis Readiness Program, Picking up the Pieces Family Support Program, Daleton Area Community Resources Directory)

For this year, the Center has a slight ($7,250) surplus.

Projected situation

Our situation remains relatively strong, with all of our money expected to continue at the same level for the next two years. However, in January 2001 the Dinkerston grant will end, and the Cuassa grant will end in August 2001. The Cuassa grant is nonrefundable.

Staff has made clear the fact that additional support is necessary, with a particular need for a director of volunteers. The Center also has two goals that will require additional funding: the purchase of a facility, and a fund to offer financial assistance for families or individuals struck by crises.

Recommendations

The recommendations of this report are as follows:

• Set a goal to double the amount raised in the membership drive in the upcoming year, and increase the amount by 15% in each of the subsequent two years. Use this money for a down payment on a facility.
• Consider implementing a sliding scale fee-for-service for the Picking up the Pieces Family Support Program
• Search for additional grants; reapply for the Dinkerston grant following the recommendations of our program officer

Tool 1: Internal audit sheet

Use this sheet to do an internal audit for your organization as described in Step 3 of this section. Depending on the size of your organization, you may need to add additional pages, or further separate some of the categories. On the other hand, many of the costs listed will not be applicable to smaller groups.

To use this sheet, do the following:

1. List the funding you have (or for future years, anticipate having) from each source in the appropriate box.
2. Add up the funding from each source for every year. Write these totals in the box marked Total of funding from all sources.
3. Go to the second half of the table, Amount of expenses. Write in all of your current and anticipated expenses for each year. The cells in grey should be totaled in the white cells above them. For example, the cost of each staff member should be written out individually, and the total of all of the staff costs should be added in Total Personnel Costs. A similar process should take place for Total Program Costs.
4. Add up the expenses for each year. Do NOT include the grey cells in this figure, as they will be added in under the subtotals for personnel and program costs. Write these figures in the Total of all expenses for each year.
5. Subtract the amount in Total of all expenses from the Total of funding from all sources for each year. If you have a positive number, you have a real or projected budget surplus - your organization has extra money, and is in the black. If the number you have found for a given year is negative, you have a real or projected deficit for that year - you are in the red, and will need to find additional resources.
6. Confusing? See Examples for a filled out version of this table.

Internal Audit Sheet

	Year 1	Year 2	Year 3	Year 4	Year 5
Amount of Funding
Funding from Source 1:
Funding from Source 2:
Funding from Source 3:
Funding from Source 4:
Funding from Source 5:
Total from all funding sources:
Amount of expenses
Staff #1(list title and %FTE):
Staff #2:
Staff #3:
Staff #4:
Staff #5:
*Total Personnel Costs:
Program #1:
Program #2:
Program #3:
**Total Program Costs:
Travel
Equipment
Supplies
Printing
Media/publicity
Phone/fax
Postage
Miscellaneous
Rent/housing
Utilities
Amount paid on debt
Total of all expenses:

* For personnel costs, include salary and the cost of fringe benefits. FTE = full time employment
** Remember to take personnel costs out of program costs, as they are listed separately.

Tool 2: What donors want from you

What follows is a list of desires that are typical of many groups of donors, such as government agencies, foundations, and individual donors. By knowing what members want, you will be able to target your marketing to their desires.

All of these suggestions should be taken as a starting point. Just as different nonprofit organizations want very different things, different donors will have their individual desires as well. It's your job to figure out what they are, and how your organization can best fulfill them.

Government agencies (federal, state, city, or county)

• A carefully defined set of services, provided by a carefully defined set of people, in a set period, often in a set manner, with no audit exceptions, and with all paper work in on time.
• Generally, government representatives want you to know regulations cold.
• You should meet all of their regulatory and bureaucratic wants.
• You might also design specific materials (such as reports or brochures) using needs and keywords of government. They should emphasize outcomes, quality, and certification levels.

Members

• Clear, tangible benefits that they actually receive.
• Updates on what the organization is doing.

Foundations

• Innovative projects that meet their criteria
• A demonstration of strong community support
• Self-sustainability within approximately three years
• Usually, they want general information, such as your mission, history, and goals.
• Letters of endorsement from community leaders or collaborators can be helpful

We should note here that foundations are a slightly different case than other potential donors. Many times, they are located across the country, and each may be unique in its desires and goals. Talk to program officers of foundations if you can, and ask what they like to see most and least in applications. Read the foundation press and consider getting help from an experienced, successful grant writer.

United Ways

• Guidelines for funding met precisely.

United Ways are an excellent source of funding for many small community organizations. If your United Way does needs assessments, make sure that you participate so that your service area needs are included.

Donors

• To support a program.
• To support an endowment.
• Some want to be visibly thanked for your contribution; many others don't. Ask.

Donors, both individual and corporate, have wants that vary widely. Organizations should learn who is most likely to donate, and focus energies on these potential donors.

Users who pay fees

• High quality and value for their money. Note that we say value, not low prices. Many people who pay fees won't balk at a high price tag if they feel they are getting a lot out of it. For example, a group of tourists may willingly pay ten or twenty dollars to tour a historical site if they have heard that it is particularly beautiful, or that the guide is exceptionally charming.

While this list gives many of the more common ways for a nonprofit organization to raise money, it isn't meant to be a complete list. Does your group have other potential means of funding? What are they?

From Peter Brinckerhoff's Financial Empowerment: More Money for More Mission. Used with permission.

Tool 3: Timeline

For each financial goal, use a separate cell to write out the action steps that need to occur, who will do them, and by when. This chart can then be used as a reminder for what you still need to do.

Timeline for Financial Sustainability Plan

Goal	Action Steps to meet the objective	By whom	By when	Completed?

Tool 4: Developing a strategic funding plan

Innovation Network, Inc. is a 501(c)(3) nonprofit organization founded in 1993 to meet the critical information and evaluation needs of nonprofit and public organizations. InnoNet's mission is to help agencies better plan, executive and evaluate their structures, organizations, and services. Their web page will walk you through an interactive page to help you develop a strategic funding plan. The service is free, but you will need to register.

What is a plan for financial sustainability?

___A plan for financial sustainability is a tool used to help the organization or initiative and its goals thrive over the long term

What are the advantages of a plan for financial sustainability?

___Financial security

___An increased focus on your real work

___Becoming more competitive in your field

___Easier transitions

___Following guidelines

How should you plan for financial sustainability?

___Develop your plan early and revise it often

___Decide who will develop the plan

___Let everyone know what you are doing

___Conduct an internal audit

___Determine how much money you need

___Decide how much money you want

___Compare how much money you have, need, and want

___Set objectives

___Consider the available possibilities

___Decide which funding possibilities you will follow up on

___Strategize how to get what you want

___Develop a timeline

___Develop a draft of your plan

___Incorporate feedback on your plan

___Implement your plan

___Continuously monitor and evaluate your progress

• What's the connection between business and community development?

• What's a business plan?

• Why should you make a business plan?

• When should you make a business plan?

• How do you make a business plan?

What's the connection between business and community development?

Although your primary goal may be improving community well-being rather than generating profit, business and earned-income activities can sometimes support community work. Nonprofit organizations and community initiatives need resources to sustain their missions, and selling appropriate products or services may be one part of a broader financial sustainability strategy.

Earned-income activities usually involve providing products, services, or both in exchange for payment. Examples include:

Products	Services
Books, guides, or educational materials	Childcare
Arts, crafts, or locally made goods	Food delivery or food-access services
Seeds, plants, or flowers	Gardening, landscaping, or yard services
Greeting cards or other printed products	Housing, workspace, or facility rentals
Clothing or organization-branded merchandise	Recreational, educational, or community programs

But is it ethical for a community or nonprofit organization to sell products and services?

It can be, when the activity is honest, transparent, fair, mission-aligned, and designed to provide genuine value. Products and services should be accurately described, appropriately priced, accessible to the people they are intended to serve, and delivered as promised.

Earned-income activities may also advance an organization's mission directly. For example, an organization might provide useful training, childcare, educational materials, recreation, food services, or other offerings that meet community needs while generating revenue to help sustain the work.

At the same time, organizations should consider whether a business activity could create barriers to access, shift attention away from the mission, compete unnecessarily with community partners, or place new demands on staff and organizational capacity.

And is it legal?

In many situations, nonprofit organizations may generate earned revenue and may end a year with a financial surplus. However, business activities must comply with applicable federal, state, and local laws, tax requirements, organizational documents, licenses, and regulations. Requirements may vary depending on the type of organization and the relationship between the business activity and its mission, so organizations should obtain appropriate legal, tax, or accounting guidance when needed.

Does this mean every nonprofit or community organization should develop business activities?

No. Earned income is only one possible sustainability strategy. Other sources may include grants, fundraising, membership dues, public funding, contracts, donations, and in-kind support. The decision to develop an earned-income activity should reflect your financial needs, organizational capacity, community priorities, mission, available alternatives, and realistic prospects for success.

Planning for overall financial sustainability requires a broader financial strategy. If earned-income or business activities are part of that strategy, a business plan can help you assess and organize them.

What is a business plan?

A business plan is a written document that explains what product or service you intend to provide, whom it is intended for, how the activity will operate, what resources it requires, how it will generate revenue, what risks it faces, and why you believe it can be financially and operationally sustainable. The plan should be supported by relevant evidence, financial information, community or market research, and realistic assumptions.

Why should you have a business plan?

• Developing a written plan can clarify your thinking, assumptions, priorities, and responsibilities.
• A clear business plan can increase confidence among staff, board members, community partners, funders, lenders, and other potential supporters.
• A business plan can help identify opportunities, costs, risks, capacity needs, and potential problems before substantial resources are committed.
• A plan can help determine whether a proposed business activity is financially viable, mission-aligned, equitable, and appropriate for the community or market it is intended to serve.

When should you make a business plan?

• When you are seriously considering starting an earned-income or business activity
• When you need greater clarity about costs, operations, staffing, customers or users, risks, and expected revenue
• When you want expert, community, customer, or partner feedback on the details of your idea
• When you are seeking grants, gifts, loans, investment, supplies, facilities, partnerships, or other forms of support
• When you need to determine whether an existing business activity should continue, expand, change, or end

How should I make a business plan?

We'll cover three main elements:

• What should the plan contain?
• How should the plan be written?
• How should the plan be presented?

What Should the Plan Contain?

Business plans vary in length and format depending on the organization, audience, activity, and purpose. Most plans, however, include several common components. Adapt them to your situation rather than treating one format as mandatory.

Cover page

Include the title of the plan, organization name, date, and relevant contact information, such as a phone number, email address, website, and mailing address when appropriate. The title should clearly identify the activity or purpose of the plan.

Table of contents

For a longer plan, include a table of contents with clear section headings and page numbers or digital links. Make the document easy to navigate whether it is read in print or electronically.

Executive summary

The executive summary is often one of the most important parts of the plan. It is usually written after the rest of the plan and provides a concise overview of the proposed activity, the need or opportunity it addresses, whom it will serve, how it will operate, expected financial results, major risks, and what support or decision is being requested.

If your executive summary is effectively written, it will:

• Communicate your organization's vision and purpose for the activity
• Establish your organization's credibility and relevant experience
• Describe the product or service and how it will be provided or sold
• Explain the need, demand, or opportunity the product or service addresses
• Summarize major implementation steps
• Give the reader enough information to understand the plan and decide whether to review the details
• If funding is being requested, state the amount or type of support needed and explain how it will be used

Description of your organization

This section should explain who you are and why your organization is positioned to carry out the plan. It may include:

• What your organization does
• Where it operates and the communities or markets it serves
• How long it has been operating
• Its mission, goals, and objectives
• Relevant accomplishments and experience
• Current funding or other resources relevant to the plan
• Experience providing or selling similar products or services
• What distinguishes your organization, including relationships, expertise, community knowledge, accessibility, or other strengths relevant to the activity

Description of your management and implementation capacity

If you are seeking outside support, describe the people and structures responsible for carrying out the plan. Briefly identify key staff members, officers, project leads, board members, advisors, or partners and explain the experience or qualifications relevant to the activity.

This section should demonstrate that the organization has, or has a realistic plan to develop, the leadership, staffing, partnerships, financial systems, and operational capacity needed to carry out the proposal responsibly.

Description of your product or service

Describe clearly what you intend to provide. What is the product or service? What needs or opportunities does it address? What features, benefits, accessibility considerations, or limitations should customers or users understand?

Use clear examples. If the offering is a physical product, photographs, drawings, samples, or product information may be useful. If permits, licenses, certifications, accessibility standards, safety requirements, or other regulations apply, identify them.

Explain the value the product or service provides. When appropriate, include evidence of previous demand, customer or participant feedback, testimonials used with permission, pilot results, or relevant research.

Information about your market and community

Your reader will want to understand who is likely to use or purchase the product or service, what evidence supports that expectation, and how you plan to reach those people.

This may be one of the most detailed sections of the plan. Consider the following:

• Your market means the customers or users you intend to reach. How many potential customers or users are there? Where are they located? What needs, preferences, circumstances, or characteristics are relevant to the offering? Are there barriers involving affordability, transportation, language, disability access, technology, or other factors? Your projections should be based on realistic evidence that enough people are likely to use or purchase the offering to support the level of revenue you expect.
• Your market research documents why you believe people will use or purchase the product or service. Relevant evidence might include data on comparable offerings, surveys, interviews, focus groups, community assessments, pilot programs, sales data, user testing, or feedback on prototypes. Where the activity directly affects community members, include their perspectives rather than relying only on assumptions about what they want.
• Your marketing and outreach plan explains how people will learn about and access the offering. Options might include a physical location, partner organizations, community events, email, websites, social media, online marketplaces, digital advertising, print materials, referrals, phone or text communication, or other channels appropriate to your audience. Consider accessibility, language, digital access, cost, and trust when choosing communication channels. Include alternative strategies in case one approach does not work as expected.

Information about comparable providers, competition, and collaboration

Most products or services already have alternatives. Other businesses, nonprofits, public agencies, informal community networks, or organizations may offer similar or related services.

Describe relevant alternatives and comparable providers. Rather than assuming your offering must be "better" than everyone else's, explain what distinguishes it, what need or gap it addresses, what value it provides, and why there is sufficient demand or community benefit to justify the activity. Also consider whether collaboration, referral, shared services, or partnership with existing providers would serve the community better than unnecessary duplication.

Details of your operating plan

Explain how the product or service will actually be produced, acquired, delivered, managed, and supported.

An operating plan should answer questions such as:

• What are the major production or service-delivery processes?
• Who will carry them out, and where?
• What staffing, contractor, volunteer, or partner capacity is needed?
• Is the offering currently operating, being piloted, or still in development?
• What equipment, technology, or other infrastructure is required?
• Is a specific physical or digital location required?
• How will supplies, inventory, scheduling, vendors, and other operational needs be managed?
• What laws, licenses, permits, safety requirements, accessibility requirements, or other regulations apply?
• What staffing, workforce, compensation, maintenance, and training considerations need to be addressed?
• How will products or services reach customers or users?
• How will quality be monitored and improved?
• What contingency plans exist if costs rise, suppliers fail, demand changes, staffing becomes unavailable, or other problems occur?
• How will customer or user satisfaction, accessibility, and experience be assessed?
• Would a process map, workflow diagram, or other visual help explain operations?

You may not be able to answer every question immediately. Identifying unanswered questions is itself useful because it shows what needs additional research, testing, planning, or consultation before the activity begins.

Financial information

This section should show whether the activity can generate enough revenue and other support to cover its costs and contribute appropriately to the organization's financial goals.

Relevant financial information may include:

• Historical revenue and expense data for the product or service, if available
• Revenue projections for several future periods
• Projected costs over the same periods, including staffing, benefits, materials, facilities, technology, marketing, accessibility, administration, and other relevant expenses
• The assumptions behind your revenue and cost projections
• Cash on hand and other assets available to support startup or ongoing operations
• Additional funding or financing needed to begin or sustain the activity
• The point at which revenue is expected to cover operating costs, when applicable
• Major financial risks and how the organization plans to respond if revenue or costs differ from projections

If you are seeking a loan or other financing, explain how the funds will be used, what revenue or other resources will support repayment, and what assumptions underlie the repayment plan.

Common financial documents may include a balance sheet, income statement or forecast, cash-flow projection, startup budget, and other schedules appropriate to the activity. Use the formats that best help readers understand the financial condition and projections of the proposed business activity.

Timelines

Include a timeline showing major action steps, responsibilities, decision points, and expected completion dates. A clear timeline helps both internal planners and potential supporters understand how the activity will move from planning to implementation.

Appendices

Supporting information that would interrupt the flow of the main plan can be placed in appendices. Examples might include staff qualifications, letters of support, detailed market research, survey results, permits, technical specifications, financial schedules, partnership agreements, photographs, or other relevant documentation.

These are common business-plan components. Adapt them to the scale and purpose of your activity, then focus on presenting the information clearly and accessibly.

How should the plan be written?

Your plan should be clear, concise, accurate, evidence-informed, honest, and appropriate to its intended audience.

Common problems in business plans include:

• The writing is unclear or difficult to understand.
• The plan is unnecessarily long or does not distinguish key information from supporting detail.
• The organization or layout is difficult to follow, or useful visuals and explanations are missing.
• The executive summary is missing or does not accurately summarize the plan.
• The plan uses excessive technical jargon or does not clearly explain why the product or service is useful.
• The plan does not adequately explain whether the organization has the capacity and qualifications to carry it out.
• The intended market or users are poorly defined, or relevant market and community research is missing.
• Comparable providers, competitors, collaborators, or alternatives are not discussed.
• Financial information or assumptions are unclear, incomplete, or unrealistic.
• The plan does not clearly explain the value of the activity or why a funder, lender, partner, customer, or other supporter should participate.
• The plan does not address important risks, accessibility considerations, community impacts, or possible unintended consequences.

Review these issues before finalizing your plan.

How should the plan be presented?

Your plan should be professional, accessible, easy to navigate, and appropriate to how your intended audience will receive and review it.

Consider the following:

• Provide the plan in the format requested by the intended audience, whether that is a digital document, online application, presentation, printed copy, or another format.
• Use enough detail to support informed review without making the document longer than necessary. Length should reflect the complexity of the proposed activity and the expectations of the intended audience rather than an arbitrary page count.
• Use headings, tables, charts, graphics, and other visual elements when they improve understanding. Make sure digital and visual materials are accessible.
• For digital plans, use clear navigation, readable formatting, accessible document structure, descriptive links, and appropriate file formats. For printed plans, use clear organization and durable presentation appropriate to the audience.
• Have several people review the plan for accuracy, clarity, accessibility, consistency, and errors before it is submitted or distributed.

A professional presentation should support the content rather than distract from it. Clear writing, accurate information, accessible formatting, realistic financial assumptions, and evidence of community or market understanding are more important than elaborate design.

Example: Timeline for Staff and Financial Sustainability Committee

This is an example of a timeline for the formation of a financial sustainability committee. The Tools part of the section has a blank form you can download and use for your own organization.

By February 1, 2014, project staff will identify individuals who will serve on the Financial Sustainability Committee.

By April 1, 2014, the Director will recruit members for the committee and schedule the first meeting.

By the first meeting of the Financial Sustainability Committee, the administrative assistant will locate or develop materials that will be used to facilitate the meeting.

By June 1, 2014, the Director will hold the first meeting of the committee.

By September 1, 2014, members of the committee will have identified organizations/individuals to approach and determined the amount that will be requested of each. The committee will begin to contact these organizations/individuals.

By December 1, 2014, committee members will have contacted all organizations and individuals identified as potential contributors.

Tool 1: Timeline Form

You can use the following form to record the growth and accomplishments of your own Financial Sustainability Committee.

Timeline Form

By _____________, project staff will identify individuals who should serve on the Financial Sustainability Committee.	Potential committee members:
By _____________, the Director will recruit members for the committee and schedule the first meeting.	Final list of committee members:
By the first meeting of the Financial Sustainability Committee, the administrative assistant will locate or develop materials that will be used to facilitate the meeting.	What materials need to be located or developed?   By when:__________________ Check when done:__________
By _________________, the Director will hold the first meeting of the committee.	Reminders sent out (Y/N)?_____ When? ___________
By _______________, members of the committee will have identified organizations /individuals to approach and determined the amount that will be requested of each. The committee will begin to contact these organizations/individuals.
By ________________, committee members will have contacted all organizations and individuals identified as potential contributors	Potential contributors contacted? Y/N ____ When:____________________________
Once potential contributors have been contacted, the financial coordinator will develop a forecasting budget reflecting the areas in which resources have been obtained.	Date completed:_______________

Tool 2: Donor Request Form 

Copies of this form can be given to members of the Financial Sustainability Committee to keep track of donations requested. One member of the group may want to group the information from all of these sheets into one large master document. Such a document can be used to help track requested donations and responses over the life of the organization.

Donor Request Form

Donor (Name, phone #, etc.)	Requested donation (Amount/Type)	Date Requested	Response	Thank-you note sent (Yes/No)	Comments and Follow-up

 

___You understand that a financial sustainability committee is a group that helps you raise money or obtain goods for your project

___You understand the advantages of developing such a committee

___You realize it is never too early to start thinking about sustainability

___You understand when you should and shouldn't develop a financial sustainability committee

___You have brainstormed possible committee members

___You have decided how large you would like the committee to be

___You have recruited members

___You have set a date for the first meeting

___You have taken care of the logistics for the first meeting

___You have held the first meeting

___You have congratulated yourself!

___You are continuing to hold regular meetings

___You understand how to maintain a financial sustainability committee

• Do you really want to apply for a grant?

• What are grants?

• Why should you apply for grants?

• When should you apply for grants?

• How should you apply for grants?

Do you really want to apply for a grant?

Grants can provide important resources for work your organization might otherwise be unable to undertake. They can support staff, programs, equipment, evaluation, partnerships, and other activities that advance community priorities.

Grants also require significant time and effort. First, you need to identify funding opportunities that fit your mission and proposed work. Then you need to prepare an application that meets the funder's requirements and clearly explains what you hope to accomplish. Grant programs are often competitive, and even strong proposals may not be funded because available resources are limited.

The good news is that grant development is a skill that can be learned and strengthened over time. One important area is proposal writing itself. Many resources can guide you through proposal development, budgeting, evaluation planning, and other parts of the application process, including materials listed in the Resources for this section.

Another important area is everything that surrounds the writing: assessing whether the opportunity fits your mission, researching the funder, engaging community members and partners, gathering evidence, developing a realistic budget, coordinating contributors, and planning for implementation and sustainability.

With a thoughtful approach, you can:

• Make sure your grant-seeking strategy supports your organizational goals and community commitments
• Clarify your strategy, readiness, and reasons for applying before investing substantial time in a proposal
• Understand how funder priorities, available resources, relationships, community context, and other factors may affect funding decisions in addition to the quality of the proposal itself
• Strengthen the quality, fit, and competitiveness of your proposals

What are grants?

For our purposes, grants are financial or in-kind awards provided to an organization, group, or sometimes an individual to support specific work. Grant funding might support a community program, initiative, research project, capacity-building effort, equipment purchase, planning process, or another defined purpose.

This section focuses primarily on financial grants to groups and organizations carrying out community work.

Why should you apply for grants?

Grants can make it possible to undertake work that an organization could not reasonably support from its existing budget. Community projects require staff time, facilities, equipment, technology, evaluation, outreach, accessibility supports, transportation, supplies, and many other resources. Grants can provide some or all of those resources.

Grants can be valuable, but they are not always necessary or appropriate:

• Some community work can be accomplished with relatively few financial resources. Convening a meeting, organizing residents, sharing information, advocating for policy change, or coordinating existing resources may sometimes require more relationships and organizing capacity than new funding.
• Funding also creates responsibilities. Someone must manage the money, maintain records, follow grant conditions, document expenditures, report progress, and remain accountable to both the funder and the community. New funding may also change staff roles, workloads, decision-making, partnerships, or expectations, so those effects should be considered in advance.

Grants are also only one source of financial support. A strong sustainability strategy may include public funding, donations, contracts, earned revenue, partnerships, in-kind resources, membership support, and other funding sources. Avoid making the organization's future dependent on a single grant whenever possible.

When should you apply for grants?

• When you want to start, strengthen, or expand work that requires additional financial resources
• When those costs cannot reasonably be covered through your current budget or other available resources
• When you identify a funder whose priorities and grant program genuinely align with the work you want to undertake
• When your organization meets the funder's eligibility and application requirements
• When you have the time, information, partnerships, and organizational capacity needed to prepare a strong proposal and, if funded, carry out the work responsibly

What about writing a grant proposal mainly because funding is available?

Funding opportunities sometimes introduce organizations to approaches they had not previously considered. The important question is whether the opportunity genuinely fits the organization's mission and community priorities.

• Suppose your group provides after-school programs for children and young people and is looking for additional funding. A local foundation funds community organizations but is particularly interested in programs involving older adults. One possibility might be an intergenerational program in which older adults and young people participate together. Should you develop such a program?
• Probably not if the main reason is simply to improve your chances of receiving funding. But the idea may be worth exploring if young people, older adults, staff, families, and community partners see genuine value in the program and it fits your organization's mission and capacity. Funding opportunities can inspire useful ideas, but they should not replace community priorities or cause the organization to change direction primarily to satisfy a funder.

Consider carefully whether the benefits of the funding opportunity justify any new requirements, responsibilities, restrictions, or changes it would bring to your organization and community.

How should you apply for grants?

Be clear about your reasons for applying

Before beginning an application, consider the larger picture. Why are you seeking this particular grant, and how would it support your mission and community priorities?

Ask yourself questions such as:

• What are our long-term program and community goals?
• Could we accomplish the same goals effectively through existing resources, partnerships, or another funding strategy?
• What exactly would the grant support?
• Are we considering this opportunity primarily because funding happens to be available?
• Is a grant the most appropriate way to support this work?
• Are there other financial or in-kind resources that may be more sustainable or flexible?
• Does the opportunity fit our mission, values, community commitments, capacity, and realistic prospects for success?
• Can we devote enough time and attention to prepare a high-quality proposal and carry out the work if funded?

If you are part of an organization or coalition, involve the appropriate people in this decision. Depending on the proposal, that may include staff, board members, partners, participants, community members, and others with knowledge of the proposed work. Their input can help determine whether grantseeking is the right next step.

Know the types of support available

Before pursuing a grant, consider other forms of financial and in-kind support that may be available. These might include government funding, contracts, individual donations, business support, earned income, partnerships, shared resources, membership support, or contributions of space, equipment, expertise, or staff time.

Focus on the type of support you want

After reviewing your options, you may decide that another strategy fits your work better. Or you may decide that a grant is the right approach. Either way, making the decision deliberately can help you move forward with greater clarity.

Search the field

Common sources of grant funding include:

• Federal, state, local, tribal, and other public agencies
• Businesses and corporate giving programs
• Private, family, community, and other foundations and philanthropic organizations

Application requirements differ considerably among funders. Government grant programs may require detailed forms, certifications, budgets, registrations, performance measures, and other documentation. Foundations and corporate giving programs may use different formats and review processes. Follow the instructions provided for each specific opportunity.

This section emphasizes foundation grantseeking because many community organizations seek foundation support and because several of the same basic principles - understanding fit, following guidelines, presenting evidence, building appropriate relationships, and describing realistic outcomes - also apply to other funding sources.

There are many potential funders, so finding the right opportunities usually requires research.

Useful approaches include:

• Use grant and philanthropy databases and directories. Resources such as Foundation Directory and other searchable grant databases can help identify funders by geographic area, issue, population, type of support, and other criteria. Public and university libraries may also provide access to subscription databases or grant-research assistance.
• Ask librarians, nonprofit support organizations, community foundations, colleagues, and other knowledgeable partners about additional resources. Regional nonprofit associations and philanthropy networks may also provide training or information about funding opportunities.
• Follow philanthropy and nonprofit-sector news. Sources such as the Chronicle of Philanthropy, funder newsletters, nonprofit associations, government grant alerts, and other sector publications can help you stay informed about funding trends and opportunities.
• Use funders' websites and online application systems. Most funders provide information about priorities, eligibility, previous grants, application requirements, deadlines, contact procedures, and application materials online.

Narrow the field

Your research may identify many possible funders. Applying to all of them is usually neither practical nor strategic. Narrow the list by looking carefully at fit.

• Check the issues and communities the funder supports. Does your work fit its stated priorities?
• Check the type of support available. Some funders support startup costs, general operations, capacity building, capital needs, advocacy, research, or specific programs, while others do not.
• Check typical and maximum grant amounts. Make sure the request you are considering is realistic for that funder. A larger project may require support from several sources.
• Check geographic eligibility and priorities. Some funders work only in particular cities, regions, states, countries, or communities.
• Review previous grants when information is available. Past awards can help you understand the funder's interests, typical grant size, and the kinds of organizations it has supported.

A methodical review can help you focus limited time on opportunities with the strongest alignment.

Investigate your leading prospects

Before preparing an application, learn as much as reasonably possible about the funder. Review its mission, current priorities, eligibility criteria, application process, deadlines, typical award amounts, previous grants, geographic focus, and any restrictions.

Start with the funder's website and application materials. Annual reports, grants lists, public tax filings where applicable, grant databases, webinars, frequently asked questions, and other public information may also provide useful context.

This research can save considerable time. An organization whose name sounds relevant to your issue may in fact fund a very different type of work. Confirm fit before investing significant effort in an application.

Know the guidelines - they can vary

Each funder establishes its own priorities and application requirements, and those requirements can vary substantially.

Some funders begin with a short letter of inquiry or concept note and invite selected applicants to submit full proposals. Others request a complete application at the outset. Requirements may include organizational information, budgets, evaluation plans, partnerships, financial records, demographic information, letters of support, or other documentation.

Read the current guidelines for the specific opportunity rather than assuming that requirements from another funder or an earlier funding cycle still apply.

Follow the guidelines

Follow the funder's instructions carefully.

If the application requests a two-page concept paper, stay within that limit. If documentation of tax-exempt or other legal status is required, provide it. Meet deadlines and submit materials using the required format or application system.

If your circumstances do not fit a requirement exactly, contact the funder when appropriate or explain the situation in the place the application provides for additional context. Do not ignore application requirements without a clear reason.

Ask questions when needed

If the guidelines do not answer an important question, contact the funder using its preferred communication method. Some funders welcome questions by email or phone; others offer webinars, office hours, technical-assistance sessions, or formal question-and-answer processes.

Review available materials first so that your question addresses something genuinely unclear. Respect staff time and follow any instructions about when or how applicants should contact the funder.

Appropriate contact can sometimes clarify whether the opportunity fits your work and may provide useful information about the application process. The goal should be understanding and alignment, not gaining an advantage through personal access.

Consider a conversation with the funding source

Some funders allow or encourage prospective applicants to discuss ideas before submitting a proposal. These conversations may occur in person, by phone, virtually, during office hours, or through another format.

If the funder's guidelines permit this, a conversation can help clarify whether your proposed work fits its priorities, what questions you should address, and whether applying is a good use of your organization's time.

Not all funders have the capacity to meet individually with applicants, and declining a meeting does not necessarily indicate lack of interest. Follow the process the funder provides.

Use appropriate introductions and relationships

Professional and community relationships can sometimes help an organization learn about a funder or make an appropriate introduction. This may be especially useful for organizations that are newer to grantseeking or unfamiliar with a particular funding network.

If a trusted colleague, partner, or community connection genuinely knows both your organization and a funder, they may be able to introduce you or provide context about your work. Such introductions should be accurate and transparent and should not substitute for eligibility, a strong proposal, or meaningful alignment with the funder's priorities.

Organizations without well-connected networks should still be able to pursue grant opportunities through the funder's established application and outreach processes.

Build community support and participation

Funders often want evidence that proposed work responds to real community priorities and has meaningful support from people and organizations affected by the issue. The strongest evidence is not simply a collection of endorsements obtained for an application, but genuine community involvement in identifying priorities, shaping the approach, and deciding how the work should proceed.

Some proposed efforts may already have strong support. Other ideas may be new, unfamiliar, or viewed differently by different parts of the community. Avoid assuming that an entire community holds one opinion. Engage people with different perspectives and pay particular attention to those most directly affected by the proposed work.

One useful approach is to share a draft concept or outline and invite feedback before the proposal is finalized.

This can:

• Help determine whether the proposed work reflects community priorities and experiences
• Create opportunities for community members and partners to become meaningfully involved
• Identify partners that may be willing to document genuine commitments or roles when letters of support or partnership agreements are appropriate
• Provide constructive feedback that can strengthen, change, or occasionally challenge the proposed idea

Form a working group

Grant planning usually benefits from more than one perspective. A working group can bring together program knowledge, community experience, financial information, evaluation expertise, partnership perspectives, and other knowledge that one writer may not have.

Depending on the proposal, include staff members, partners, participants, community members, financial or evaluation staff, and others with relevant knowledge. People most directly affected by the proposed work can provide particularly important insight into whether the proposal reflects community priorities and realities.

The group does not need to write every sentence collectively. One person may coordinate or draft the proposal while group members contribute information, develop sections, review assumptions, check accuracy, and comment on drafts.

Get knowledgeable review

Before submitting the proposal, consider asking knowledgeable people to review it. Useful reviewers might include someone with subject-matter expertise, lived or community experience related to the issue, grant-development experience, evaluation expertise, financial knowledge, or familiarity with the type of funder involved.

Expertise may already exist within your organization or partnerships. When outside review is useful, make sure reviewers understand the purpose of the proposal and any confidentiality requirements.

Learn from funded examples

Reviewing successful proposals can help you understand how strong applications organize information, present evidence, explain outcomes, construct budgets, and respond to funder requirements.

Look for examples that have been publicly shared by funders, nonprofit support organizations, universities, government agencies, or previous applicants. You may also ask a funded organization whether it is willing to share all or part of an application, recognizing that it may decline because of confidentiality, capacity, proprietary information, or other concerns.

Use examples as learning tools, not templates to copy. Pay attention to structure, clarity, level of detail, evidence, budgets, and how the proposal responds to the specific funder's priorities. Your own proposal should accurately reflect your organization, community, and proposed work.

Learn from an unsuccessful proposal

Grant funding is competitive, and many strong proposals are not funded. A declined application does not necessarily mean the idea or proposal was poor. Funders may have limited resources, receive many strong applications, change priorities, seek a particular balance in their grant portfolio, or make choices among proposals that all have merit.

When a proposal is not funded, review what you can learn from the experience. Some funders provide reviewer comments or allow applicants to request feedback; others do not have the capacity or policy to do so.

If feedback is available, approach the conversation as an opportunity to learn. Questions such as "Are there areas we could strengthen if we apply again?" or "Was there a particular issue of fit or clarity we should understand?" are more useful than challenging the funding decision.

Consider the feedback alongside your own assessment and the perspectives of community members, staff, and partners. Not every funder recommendation will be appropriate for your organization, and you should not change your mission or community commitments merely to improve the chances of future funding.

If the opportunity remains a good fit, you may decide to revise and apply again. If not, use what you learned to strengthen future proposals to other appropriate funders.

And if your proposal is funded, celebrate the accomplishment - then make sure you have the systems, partnerships, staffing, financial controls, community accountability, and evaluation processes needed to carry out the work as promised.

Example 1: Getting initial support

Ray Shonholtz, the founder of an innovative organization called Community Boards, describes how he got initial community support for his work. Community Boards involves training citizens in dispute resolution on a neighborhood level. At the time Ray started, this was a very unfamiliar idea:

"When I started Community Boards, I knew that it was an unusual idea, particularly to funders and to political people. My first effort was to build credibility for the idea by associating it with people of some standing in the criminal justice community -- which meant people in the bar association, the district attorney's office, et cetera -- to at least say it was an interesting idea, worth experimenting with.

"So I wrote a concept paper, made 50 copies of it, distributed them to the legal community and to some community organizations. And then asked some friends of mine around the city to put me on the agenda for community organization meetings, public defender office meetings. And I started making contacts with all them, not for them to endorse it -- I never asked anybody to endorse it -- but merely to give it conceptual credence.

"The advantage of that is that you avoid anybody critiquing it too early, and kind of have all the benefits of getting what you really want, which is some green light like "This idea interests me," signed, "The Prosecutor." Since I didn't ask for more, I didn't get more; but those kind of support positions grew to be extremely useful with funders.

"Before any services were delivered, I also built a board of directors of name people -- some community people, but also a nice balance of lawyers and judges, very friendly to the idea. Then, in the funding proposals, I would show the support we had received from these different organizations, and leverage that with the funders. I'd say, "Look at the range of interests in this unique idea." So I became relatively skillful at educating the funding base.

"And I was a credible person: teaching at the law school, being an Associate Professor of Criminal Law, putting it on law school stationery, circulating the idea around. That added to the credibility of it, because stature, name, connections, I think have a lot to do with whether an idea gets some hearing or is quickly dismissed. I spent a lot of time around the politics of the idea, so that nobody came out opposing it. There were some people who were skeptical, but then I would only ask for conceptual support, for trying it -- not in the sense it was a meritorious idea, but one that ought to be given some chance.

"Well, there are very few people who won't give you that, you know. So I had very little if any opposition in the early days. It was very important to build a conceptual constituency within the local community for it."

Example 2: Approaching foundations

Ray describes how he approached foundations, and in particular how he used one funder to network with another. Eventually his work became funded by more than a dozen different foundations.

"I also learned foundations fund people first and ideas second. The foundation wants to know that the person they're funding isn't a kook. Regardless of what the idea is, they want to know that the person has a reasonable chance of delivering it, or at least making a reasonable effort to attempt to deliver it, especially if it's a very risky idea. So credibility becomes the first and primary issue for most sophisticated foundations. Who you are and who supports you will be the first determining factor of whether a foundation gives you money.

"My process with the funders was always to see the executive director of the foundation, not a program officer. It's to use one funder to network with other funders. So if one person in the funding community felt strongly about it, I would ask her or him who else this should go to, and could I use their name in the letter; or better yet, would they make a call for me indicating that I was going to call so-and-so. And invariably they'd say yes to one or the other of those openings.

"The issue with foundations is getting through the door. Once you're through the door, you have to be your own salesperson. But you need a door-opener. Somebody has to be the bridge, help you over the bridge, that's been my experience. So if I wanted to deal with the Ford Foundation, I'd need somebody who knew the Ford Foundation and who would say, "Hey, this program you should look at, and I'll let so-and-so know you're going to call." And that of course is a time-honored approach; I don 't think there's anything unique about it.

"But the funding community responds well to that, because they get so many requests, and most of them don't have the staff to screen -- see, they all operate on the principle of people first, ideas second. That might be simplistic, but I think it's generally true. That increases the importance of somebody to take you through the door."

(Both examples from an interview with Ray Shonholtz in Bill Berkowitz, Local Heroes, Lexington Books, Lexington, MA, 1987.)

Example 3: Collaboration, Not Competition: Thrive Allen County's Capacity Building Initiatives

Rural organizations face many challenges in applying for grants, including few major foundations located in or familiar with rural areas and the perception that a smaller population area means a smaller impact. But one nonprofit in Kansas is showing just how mighty a rural organization can be. Since 2019, Thrive Allen County has brought over $28 million into the county for a wide variety of projects, including public transportation, grocery stores, hiking trails, and much more.

In Thrive Allen County's early years, the executive director at the time decided to expand the organization's funding from local sources and start applying for state, regional, federal, and other funding sources. Expanding funding sources helped the nonprofit build capacity and avoid local budget cuts or changes in their early funding sources.

Thrive Allen County's grant writers “usually bring in more money for the community than they do for the organization,” Regehr said. The grant writing team helps governmental agencies and civic and nonprofit organizations apply for funding. “It's not just Thrive doing the work,” she added. “We're also working to empower all of them to do the work as well.”

In addition to Kansas, Thrive Allen County has worked with rural communities in California, Louisiana, Missouri, Nebraska, New York, Nebraska, and Oklahoma. “We are energized by working with other organizations in other communities,” Regehr said. “It is not just people learning from us; it's us learning from them. There are so many cool things that are being done across the nation.”

Thrive Allen County has even distributed funds to other organizations. During the COVID-19 pandemic, Thrive Allen County was asked by the county to distribute $2.4 million in SPARK funding, or Kansas's use of American Rescue Plan dollars. The money had to be spent in six months. Thrive Allen County met with people from different community sectors to create an advisory group and develop grant programs to distribute the money.

To read more about the success of Thrive Allen County, you can click this link to the full article on the Rural Health Information Hub website.

Tool: Tips for Successful Grant-Writing from Foundation Officials

We've collected some quotes from actual foundation officials regarding the grant -writing process. So here are some tips, straight from the source, that can guide you as you proceed:

Do your initial research

"Call first and ask for a copy of our report, which describes previous grants, so people get a sense of what the amounts are and what kinds of organizations we've been supporting."

Check the guidelines

"Do your homework, not just in finding out how to apply, but in making the match between your needs and our needs. Although we have a broad giving program, it's very clear in our annual report what we are most interested in and what's important to us."

"Read our guidelines. We have a number of printed materials relating to our programs. Study our past history, and then contact us with a specific request based on their understanding of our guidelines."

Ask, if you have good questions

"I respect people who aren't afraid to get on the phone and call me to talk about ideas. I invite that, as long as they've done their homework and know what we're about. If there's a sense that there's something there, and there's any room for them to come within our guidelines, and the idea sounds plausible, I'm probably going to encourage them to proceed with a small concept paper and then a proposal. We take it one step at a time."

Don't call just for the sake of calling

"I detest people calling up and saying "Can we send you a proposal?" The answer is "yes"; that's what we're in business for. But then they always want you to have lunch, show you around, tell you their whole story. I can't do it. There aren't enough days in the year."

Sensible middle ground

"If they have done the research, it may not be necessary to call. But I'm very willing to talk with people about what they are interested in having us support and if it's feasible."

Build community support

"One thing I find compelling is some indication of community support or involvement in programs we are being asked to fund. I would encourage anyone who has newspaper articles about the importance of the organization or a special program, or unsolicited letters of praise, to send us copies of those."

(Source: Interviews in Massachusetts Foundation Examiner.)

 

 

Tool: Potential Funders (by Category)

Funding resources on this page are categorized first by region of the world, and then by categories when appropriate. If you know of additional funding sources that should be added to this list, feel free to email them to us at toolbox@ku.edu.

Global

Foundations

• Council on Foundations. Provides tools to over 2,000 grantmaking foundations and giving organizations that are members of the Council on Foundations worldwide.

Grantwriting/Grantseeking (International)

• International Funding. A listing of international, regional, and country-specific directories. Provides information on how to write grants, training courses etc.
• International Human Rights Funders Group. Although the International Human Rights Funders Group (IHRFG) does not make grants, the site provides information about funders that do. You can search by geography, issue, type of support etc.
• Nonprofit Expert. Provides a list of international grants accommodating a wide range of interests, also provides various other resources as well.
• Grants to Non-U.S. Organizations. The Foundation Center provides some useful links and resources for international grants, including proposal writing, tools and resources, training courses etc.

Philanthropy (International)

• Philanthropy Australia. Philanthropy Australia is the national membership organization for grantmaking trusts and foundations. The site contains a gateway to community foundations, and links to research and information, workshops and training, fact sheets, and more, you must become a member before you can use their resources.
• International Philanthropy. This Site is devoted to online resources in the field of international Philanthropy which includes updates on the latest news within the field and a resource directory.
• The National Endowment for Democracy. Database that contains over 100 Philanthropic organizations that provide funding, fellowship and awards for those in the area of international democratic development.
• Worldwide Initiatives for Grantmaker Support. Dedicated to philanthropy and culture of giving, they provide mutual learning, support and knowledge sharing.
• Peace and Security Funders Group. Provides information on effective grantmaking strategies related to international peace and security. There is a cost for membership, see website for details.

Health

• Global Fund to Fight AIDS, TB and Malaria. Committed to saving lives all around the world through providing medicine to fight HIV/AIDS/ Tuberculosis and Malaria.
• Fogarty International Center. Research grants, training grants, fellowships and other opportunities related to global health.

Poverty

• Worldwide Initiatives for Grantmaker Support. Dedicated to philanthropy and culture of giving, they provide mutual learning, support and knowledge sharing.
• Global Development Network. Funding opportunities for development researchers and research institutes in low and middle income countries.

Research

• Grant Agency of the Czech Republic. An independent institution established to promote progress in scientific and technological development in the Czech Republic.
• Global Fund for Women. International network committed to equality and social justice for women by making grants to support women’s groups around the world.

Regional Sources of Funding – United States and North America

• The Foundation Center. Maintains a comprehensive database on U.S grantmakers and their grants. Access to free resources through five regional Libraries, has network of over 400 funding information centers.
• Grants.Gov This website, run by the U.S. government, is a central storehouse for information on over 1,000 grant programs. It provides access to approximately $500 billion in annual awards.
• Minnesota Council on Foundations. Provides grantmaking and grantseeking resources, requires a membership fee.
• The Grantsmanship Center. This site covers all aspects of the United States, and provides grantmaking foundations by state, community etc.; you must pay a membership fee in order to use this resource, check website for complete details.
• Cottonwood Foundation. This foundation focuses its funding on committed grass roots organizations that rely on volunteer efforts.

Agriculture

• International Agriculture Grants. A directory of selected international grants, exchanges, fellowships, and collaborative research opportunities in agriculture.
• International Forestry Grants. A Guide to Grants, Fellowships, and Scholarships in International Forestry and Natural Resources.
• United States Department of Agriculture. Contains information on research as well as tips on grantwriting and updated information on RFA’s (Request for Applicants).

Environmental

• Environmental Grantmakers Association. Helps member organizations become effective environmental grantmakers through information sharing and collaboration and networking.
• Grantmakers without Borders. Dedicated to increasing funding internationally specifically for international social justice, and environmental sustainability.
• Environmental Protection Agency. Contains various types of research and information related to the environment that can aid in the grantmaking process.
• Echoing Green. Provides seed money to social entrepreneurs who want to make a positive social change.

Grantwriting/Grantseeking

• Fundsnet. A compilation of grantwriting and fundraising services at no cost; includes various categories of interest.
• The Grantsmanship Center. Conducts grantsmanship trainings, as well as earned income strategies for nonprofits.
• How to Get Money Out of Donor Organizations. These detailed guidelines can assist you in getting your project funded by international donors.
• Appalachian Regional Commission. Provides a list of online resources by topic ranging from community planning to funding. Each year ARC provides funding for several hundred projects throughout the Appalachian Region.
• National Service Resources. Provides general grant resources as well as grant opportunities by category.

Health

• Grantmakers in Health. Grantmakers in Health (GIH) is a nonprofit, educational organization dedicated to helping foundations and corporate giving programs improve the health of all people, you must become a member in order to get full access to information.

Philanthropy

• Minnesota Council on Foundations. Provides grantmaking and grantseeking resources, requires a membership fee.

Poverty

• Administration for Children and Families. Responsible for federal programs that promote the economic and social well-being of families, children, individuals, and communities.

Women’s Health and Development

• Funding Sources for Gender-Equality and Women-focused Projects. Access to free downloads of materials, information on gender and development, great resource on implementing programs for gender development, mainstreaming gender equality concerns, and the information can aid in the grantwriting process.

Regional Sources of Funding – Africa Africa

• World Bank's Africa Program. The World Bank is a vital source of financial and technical assistance to developing countries around the world. This site provides data and research, news, publications etc. about the countries they are aiding.
• Kabissa: Space for Change In Africa. Online community for African civil society, designed to empower African organizations and their allies to showcase, connect and learn. It has a network of over 1200 organizations working to improve communities in Africa.

Regional Sources of Funding – Canada

• Canadian Grants. The site of Big Online, a fee-based subscription service of available funding sources in North America with an emphasis on Canada.
• Canadian Sources of Funding. Links to online databases and directories of funding agencies and foundations of interest to Canadian individuals and organizations.

Regional Sources of Funding – Europe

• European Commission. Provides the latest news of EU affairs, links to policies, direct links to key information services which may aid in the decision making process.
• Welcome Europe. A search engine for European grants and loans. You'll also find EU funding news, calls for tenders, and other information, this site does require a membership fee. The membership fee ranges in price.

Regional Sources of Funding – Russia

NIS Funding Opportunities & Exchange Programs. Programs that involve work or travel with scholars and students in Russia and the NIS.

Regional Sources of Funding – Southeast Asia

• Japan Foundation Center. Contains a lengthy list of links to Japanese Grant-Making Foundations as well as additional background information on history and trends, assets, and features of grant programs.
• Philippine Foundation Center. Contains databases on donors, NGOs, and foundations, as well as a publications database and other relevant links.

 

You understand when to apply for a grant:

___You want to start a new project or expand an existing one

___You know of a granting agency that makes awards for the costs you envision

___You know that you meet the eligibility standards

___You have the time and energy necessary for the grant-writing process

___You understand when not to apply for a grant:

• When you can do excellent work with little or no money
• When money can be a drawback
• Other ways to get money

Steps for applying for grants:

___You are clear about your reason for applying

___You know the types of support available

___You are focusing on the type of support you want

___You have searched the field

___You have narrowed the field

___You have investigated your leading prospects

___You know the guidelines

___You have followed the guidelines

___You have asked questions, as needed

___You have considered a meeting with the funding source

___You have asked others to make contacts for you

___You have built community support

___You have formed a working group

___You have gotten expert advice

___You used a successful model

___You have learned from rejection

• What is a grant?

• Why is it worthwhile to write a grant proposal?

• Who can write a grant proposal?

• What are the standard components of a grant proposal?

• How do you prepare a strong grant proposal?

Has your community identified an important health or community priority and a promising strategy for addressing it, but lacks the resources needed to move forward? A grant may provide funding, strengthen organizational capacity, and support community-led action.

Whether you are preparing your first proposal or returning to grant writing after some time away, this section can help you organize the process. The discussion focuses primarily on public-sector grants, but many of the principles also apply to foundation and other grant opportunities.

What is a grant?

A grant is financial or other support provided to an organization, group, or individual for an approved purpose. A grant proposal is the written or electronic application used to request that support and explain what the applicant proposes to accomplish.

Grants are not the same as contracts. A grant generally supports activities consistent with an approved purpose while allowing the recipient some responsibility for how the work is carried out within the funder's requirements. A contract is a legally binding agreement in which an organization or individual provides specified goods or services under defined terms. Always review the specific requirements of the funding opportunity.

Grant funding is available from public and private sources. Public grants may be offered by federal, state, tribal, territorial, or local government agencies. Private grants may come from foundations, corporations, community foundations, philanthropic organizations, or other funders.

Public funding priorities change over time as laws, budgets, community conditions, and policy priorities change. For that reason, use current funding announcements and official application materials rather than relying on older examples when determining what programs are currently supported.

Why is it worthwhile to write a grant proposal?

You may decide to pursue a grant for several reasons:

• You want to begin a new project that responds to an identified community priority, need, or opportunity.
• You want to strengthen or expand an existing project and the additional costs cannot reasonably be covered within your current budget.
• You have identified a funder whose priorities align with the program, initiative, or community work you want to support.
• Your organization meets the eligibility requirements for the funding opportunity.
• You have the staff time, partnerships, information, and other capacity needed to develop a strong proposal and carry out the project if funded.
• You have been invited to apply for funding.

Before investing substantial time in an application, make sure the opportunity is genuinely aligned with your mission, community priorities, organizational capacity, and long-term plans.

Where can you find funding opportunities?

Most grant research and application processes now take place online. For federal opportunities, Grants.gov provides a central location for organizations to search for funding opportunities, review eligibility and application requirements, subscribe to updates, and submit applications. Individual federal, state, tribal, territorial, and local agencies may also publish opportunities through their own funding portals.

Foundation and philanthropic opportunities can be researched through funder websites, Candid and other grant databases, community foundations, nonprofit resource centers, philanthropy networks, professional associations, and organizations working in related fields.

Useful sources may include:

• Grants.gov and the websites of relevant federal agencies
• State, tribal, territorial, county, and local government funding portals
• Candid and other current foundation and philanthropy research tools
• Community foundations and regional philanthropic organizations
• Nonprofit associations and technical-assistance organizations
• Professional associations, issue-specific networks, and newsletters
• Colleagues and community partners with relevant grant-development experience

Always verify opportunities through the funder's official materials. Be cautious about services that charge unnecessary fees, guarantee grant awards, or request sensitive financial information without a legitimate application process.

What is a typical proposal timeline?

Grant applications vary greatly in length and complexity. Some require only a brief concept paper, while others involve extensive narratives, budgets, work plans, evaluation measures, organizational documents, partner commitments, and electronic forms.

Deadlines can also vary considerably. Begin planning as early as possible so there is enough time to involve community members and partners, develop the project and budget, obtain required approvals, gather supporting documents, complete registrations, review the application, and resolve technical submission issues before the deadline.

Who can write a grant proposal?

Grant writing can be learned. Start by reading the funding announcement and application instructions carefully. Create a checklist of required components, eligibility requirements, deadlines, submission instructions, page or character limits, file formats, required registrations, and attachments.

A strong proposal is often a collaborative effort. One person may coordinate the writing, while staff members, community partners, participants, evaluators, finance staff, and others contribute information or review sections relevant to their expertise.

You do not need a particular academic degree to write an effective proposal. Clear writing matters, but so do a strong project design, accurate evidence, meaningful community participation, realistic goals, a credible evaluation plan, and a budget that reflects the actual resources needed.

Have at least one person who was not the primary writer review the proposal for clarity, consistency, accessibility, accuracy, and compliance with the funder's requirements.

What are the standard components of a grant proposal?

Funding opportunities vary, so always follow the specific instructions provided by the funder. Many proposals, however, contain some version of the following elements:

• Cover letter, title page, executive summary, or abstract
• Statement of community context, priorities, and need
• Project description, including goals, objectives, methods, activities, and timeline
• Evaluation and learning plan
• Budget request and budget justification
• Applicant qualifications and organizational capacity
• Sustainability or continuation plan, when required
• Appendices and required supporting documents

Cover letter, title page, and abstract

Follow the funder's instructions about whether a cover letter, title page, letter of intent, executive summary, or abstract is required and how each should be submitted.

A cover letter, when requested, might:

• Briefly describe the organization's interest in and capacity to carry out the proposed project
• Clearly communicate the purpose and significance of the request
• Summarize the proposed project
• Identify an appropriate contact person

Clear, accurate writing communicates professionalism, but writing style alone should not be treated as evidence of an organization's ability to carry out community work. Review the proposal carefully for errors because clarity helps reviewers understand your ideas and reduces the possibility of confusion.

A title page may include:

• Project title
• Applicant organization
• Relevant contact information
• Funder or funding opportunity
• Proposed project period
• Total amount requested

Some funders first request a letter of intent or concept paper. These shorter documents usually summarize the issue or opportunity, proposed strategy, expected results, organization, partnerships, and funding request. Follow the specific length and content requirements provided.

An abstract or executive summary generally provides a concise overview of the community context and need, project goals, key activities, expected outcomes, evaluation approach, partnerships, and organizational capacity.

Statement of Community Context, Priorities, and Need

This section explains why the proposed work matters. A strong statement combines reliable data with community knowledge and lived experience and avoids portraying communities only through deficits or problems.

Your statement should:

• Document the issue, condition, opportunity, or unmet need using relevant quantitative and qualitative evidence
• Describe relevant social, economic, environmental, organizational, policy, and structural conditions
• Identify community strengths, assets, relationships, and resources that the proposed work can build on
• Describe previous or existing approaches and what has been learned from them
• Explain how people most directly affected by the issue helped identify the priority or shape the proposed response

Use current, reliable data whenever possible. Depending on the issue, sources may include the U.S. Census Bureau and American Community Survey, public health surveillance systems, education or labor data, state and local government sources, administrative records, peer-reviewed research, community assessments, and other credible datasets.

Compare local data with appropriate benchmarks when doing so adds useful context. Avoid using comparisons simply to make a community appear deficient. Explain what the numbers mean and, where possible, disaggregate data thoughtfully to identify inequities without stereotyping groups.

If existing data do not answer important questions, consider gathering additional information through interviews, listening sessions, focus groups, surveys, observation, or other participatory methods. Follow appropriate privacy, consent, accessibility, compensation, and ethical practices.

For example, if residents and students have raised concerns about pedestrian safety around schools after significant neighborhood growth, combine available crash, traffic, infrastructure, and transportation data with the experiences of students, families, school staff, residents, people with disabilities, and others who use the area. This creates a fuller picture than relying on intuition alone.

Your proposal may build on existing work, adapt an evidence-informed approach, develop something new, or combine several strategies. Innovation can be useful, but novelty by itself is not a substitute for evidence, community fit, feasibility, or collaboration.

Tips for presenting data

• Use comparisons when they add meaningful context, such as trends over time, differences among geographic areas, or differences among populations that are relevant to the issue
• Choose a chart type appropriate to the data rather than using a particular format by default
• Use line charts when showing change over time is the main purpose
• Use bar charts when comparing categories or groups
• Use accurate, descriptive titles and identify the period represented by the data
• Clearly label axes and units of measure
• Include legends or other explanations when needed
• Make charts accessible by using readable labels, sufficient contrast, alternative text where appropriate, and patterns or direct labels rather than relying only on color
• Do not divide people into demographic categories unless those categories are relevant to the analysis and supported by the available data

Project Description

The project description explains how the proposed work will be carried out. It should connect directly to the priorities and evidence described earlier and provide enough detail for reviewers and future project staff to understand the approach.

The project description commonly includes:

• Goals and objectives
• Methods and activities
• A timeline, work plan, or implementation schedule
• Roles of staff, participants, community partners, and other collaborators
• Accessibility, equity, and participation considerations relevant to implementation

Goals and Objectives

Goals are broad statements describing the longer-term change or condition the project seeks to support. Objectives identify specific results, activities, or milestones that can be assessed over a defined period.

Well-written objectives are generally:

• Specific. They clearly identify what is expected to change or be completed, for whom or where, and within what period.
• Measurable. Progress can be assessed with appropriate quantitative or qualitative information.
• Achievable. They are realistic given the time, resources, evidence, partnerships, and conditions involved.
• Relevant. They connect clearly to the organization's mission and community priorities.
• Time-bound. They specify when progress or completion will be assessed.
• Meaningful. They address outcomes or activities that matter to the people and communities involved.

Less specific objective: "Gather feedback from people using prenatal care about barriers to receiving care early in pregnancy."

More specific objective: "During the first project year, invite at least 100 people who recently received prenatal care through Medicaid or private insurance to provide voluntary feedback about factors that supported or limited access to care during the first trimester."

Participation in surveys, interviews, or other data collection should be voluntary where applicable, and the proposal should address informed consent, privacy, accessibility, language access, and appropriate compensation or other support for participants.

Process and outcome objectives

A process objective describes an activity or implementation milestone. An outcome objective describes a change the project seeks to support.

Example process objective: "During the first project year, provide evidence-informed heart-health information through at least 20 community and clinical outreach locations."

Example outcome objective: "By the end of the three-year project period, reduce the prevalence of uncontrolled high blood pressure among participating adults by an agreed-upon amount from baseline."

Methods

The methods section describes how the project will accomplish its objectives. Explain the sequence of activities, who will carry them out, who will participate, how partners will be involved, and how accessibility and community input will be incorporated.

For educational or outreach materials, for example, consider:

• Whether an existing evidence-informed resource can be adapted rather than creating something new
• Who should participate in developing or reviewing the material, including subject-matter experts and intended users
• Whether translation, interpretation, plain-language versions, alternative formats, or other accessibility supports are needed
• How materials will be produced, distributed, promoted, and updated
• Which settings, organizations, networks, and communication channels will effectively reach the people the project is intended to serve
• How implementation and reach will be documented without creating unnecessary burden

Make clear how activities connect to one another and to the objectives. A work plan, logic model, flowchart, or Gantt chart may help show timing, dependencies, responsibilities, and milestones when appropriate.

Evaluation and Learning Plan

The evaluation plan explains how you will assess implementation, outcomes, equity, participant experience, and other relevant aspects of the project. It should describe what information will be collected, from whom, how, when, and how findings will be analyzed and used.

Evaluation can help your organization:

• Clarify what success or meaningful progress looks like
• Learn what is working, for whom, under what conditions, and what should be adjusted
• Understand the resources required for different activities and outcomes
• Meet funder reporting and accountability requirements
• Share learning with participants, partners, and the broader community

From a funder's perspective, evaluation can help demonstrate:

• Whether agreed-upon activities and objectives were achieved
• Whether resources were used as proposed
• What outcomes, lessons, and value resulted from the investment

Process evaluation examines how the project was implemented. Outcome evaluation examines changes associated with the project. Many projects use both.

Avoid claiming that observed changes were caused by your project unless the evaluation design supports that conclusion. Community outcomes are usually influenced by many programs, policies, environmental conditions, social factors, and other changes occurring at the same time.

Design evaluation methods that are proportionate to the project and feasible with available resources. When collecting information from people, address informed consent, privacy, confidentiality, accessibility, compensation where appropriate, data security, and responsible use of findings.

Budget Request and Budget Justification

The budget should reflect the actual resources required to carry out the activities described in the proposal. Every significant budget item should connect clearly to the project design.

Common budget categories may include:

• Salaries and wages
• Payroll taxes and required employment costs
• Benefits
• Indirect or administrative costs, when allowable
• In-kind contributions or cost sharing, when applicable
• Facilities and utilities
• Equipment, technology, and supplies
• Communications, printing, postage, and digital services
• Travel and transportation
• Interpretation, translation, accessibility, and accommodations
• Participant compensation, childcare or dependent-care support, meals, transportation, or other supports needed for equitable participation
• Evaluation and data-management costs

Staffing may be expressed in full-time equivalents (FTEs) or another format required by the funder. Use current and realistic compensation estimates and include appropriate benefits and employment costs.

Indirect costs help cover shared organizational expenses necessary to support a project, such as administration, facilities, information technology, finance, human resources, and other infrastructure. Follow the funder's rules concerning indirect-cost rates.

In-kind contributions are non-cash resources contributed to the project, such as staff time, space, equipment, or professional services. Document them accurately and follow the funder's requirements for valuation and allowable cost sharing.

The budget justification should explain:

• Why each significant cost is necessary
• How the amount was calculated
• How the expense connects to project activities
• Any assumptions used to estimate salaries, travel, supplies, contracts, participant support, or other costs

When preparing the budget:

• Stay within the funder's allowable funding range
• Make sure amounts are consistent across the narrative, budget, justification, and required forms
• For multi-year proposals, use reasonable assumptions about compensation adjustments, inflation, and changing costs
• Ask people with relevant experience to review estimates for activities your organization has not previously carried out

For example, suppose you plan to conduct three focus groups with parents facing economic barriers whose young children have significant health or support needs. A realistic and equitable budget might consider:

• Community outreach and recruitment
• Appropriate compensation or honoraria for participants' time and expertise
• Transportation or remote-participation support
• Childcare or dependent-care support
• Food and beverages when appropriate
• A trained facilitator or qualitative researcher
• Interpretation, translation, or bilingual facilitation
• Accessibility accommodations
• Recording, transcription, qualitative analysis, and secure data management

Applicant Qualifications and Organizational Capacity

Use this section to explain why your organization and partners are well positioned to carry out the proposed work. Rather than simply arguing that you are better than other applicants, demonstrate relevant experience, relationships, expertise, community trust, infrastructure, and capacity.

Include information such as:

• Your organization's mission, history, and relevant experience
• Relevant strengths, accomplishments, community relationships, and lessons learned
• Partnerships and resources that will contribute to implementation
• How participants or people most affected by the issue will contribute to planning, implementation, governance, or evaluation
• Financial, administrative, evaluation, data, and operational systems needed to manage the award responsibly

Future Funding Plans / Plans for Sustainability

Some funders ask how important activities or outcomes will continue after the grant period. Sustainability does not necessarily mean that a project must eventually generate enough revenue to support itself completely.

Sustainability may involve maintaining the most valuable activities, embedding practices within existing organizations, securing public or philanthropic support, strengthening community ownership, developing partnerships, transitioning responsibilities, integrating services into ongoing systems, or identifying other resources.

Consider questions such as:

• Which elements of the project should continue after the grant, and why?
• Could activities be integrated into existing organizational or public systems?
• Could additional grants, contracts, public funding, donations, or partnerships support continuation?
• Are earned-income strategies or fees appropriate without creating barriers to access?
• What knowledge, skills, relationships, or infrastructure will remain after the grant?
• How will community partners and participants be involved in decisions about continuation?

Avoid promising sustainability that is unrealistic. Explain what you reasonably expect to continue, what resources will be required, and what actions you will take during the grant period to strengthen long-term viability.

Appendices

Appendices contain supporting materials requested or permitted by the funder. Include only materials that are relevant and allowable.

Examples may include:

• Communications, outreach, or dissemination plans
• Organizational or project staffing charts
• Work plans or timelines
• Evaluation tools or data-collection instruments
• Relevant educational, outreach, or program materials
• Biosketches, resumes, or curricula vitae for key personnel when requested
• Letters of commitment, participation, or support

Letters from partner organizations should accurately describe the partner's role, commitment, resources, and relationship to the project. Generic endorsement letters are usually less useful than letters that clearly explain what the partner has agreed to do.

If you help draft a letter for a partner, make sure the partner reviews, approves, and signs the final version and that it accurately represents its commitments.

How do you prepare a strong grant proposal?

Grant programs are often competitive, and many strong proposals cannot be funded because resources are limited. The goal is to submit a proposal that is responsive to the funding announcement, grounded in evidence and community priorities, feasible, well organized, and clear about what the requested resources will accomplish.

An unsuccessful application does not necessarily mean the proposed work lacks value. When feedback is available, use it to strengthen future proposals while continuing to assess whether the funder's priorities remain aligned with your mission and community commitments.

Characteristics of Strong Proposals

• Follow all application instructions and eligibility requirements
• Organize information clearly so reviewers can easily understand how the sections connect
• Use reliable quantitative and qualitative evidence to explain community context, priorities, strengths, and needs
• Clearly explain how the proposed work aligns with the funding opportunity without distorting organizational or community priorities
• Use evidence-informed, culturally responsive, accessible, and feasible strategies
• Establish ambitious but realistic goals and objectives
• Use measurable or otherwise assessable objectives that reflect meaningful progress
• Include an evaluation and learning plan appropriate to the project's scope, resources, and intended outcomes
• Demonstrate meaningful participation by people and communities affected by the proposed work
• Include a realistic budget that supports fair compensation, accessibility, participation, implementation, and evaluation
• Explain the applicant's and partners' relevant experience, relationships, capacity, and responsibilities

Common Proposal Weaknesses

• Failing to follow the funder's current application, formatting, attachment, submission, or deadline requirements
• Writing that is unclear, inconsistent, overly technical, or difficult to navigate
• Insufficient relevant experience or an unclear plan for obtaining the partnerships or expertise needed to carry out the work
• Limited meaningful participation from people and communities affected by the project
• A proposal that is too broad, unfocused, or disconnected from the available resources
• An approach that does not fit the community context, evidence, priorities, or people the project is intended to reach
• An unrealistic implementation timeline
• An evaluation plan that does not match the project's objectives or available capacity
• An unrealistic or insufficiently explained budget
• An unclear continuation or sustainability strategy when one is relevant or required
• Proposal sections that contradict one another or do not clearly connect activities, objectives, evaluation, staffing, and budget

In Summary

A grant provides financial or other support for approved work, while a grant proposal explains why the work matters, what will be done, who will be involved, what resources are needed, and how progress and results will be assessed.

Grant proposals can require substantial time and coordination. Read the funding announcement carefully, organize requirements early, and involve people with the knowledge needed to design a credible proposal. This may include staff, participants, community members, partners, finance staff, evaluators, and subject-matter experts.

Common proposal components include:

• Cover letter, title page, executive summary, or abstract
• Statement of community context, priorities, and need
• Project description, goals, objectives, methods, and timeline
• Evaluation and learning plan
• Budget request and justification
• Applicant qualifications and organizational capacity
• Sustainability or continuation plan
• Appropriate supporting materials and partner documentation

Strong proposals are not simply persuasive documents. They are accurate plans for work that is relevant, feasible, appropriately resourced, accountable, and responsive to the people and communities involved. The strongest application is one that fits both the funder's requirements and the organization's mission without allowing the pursuit of funding to displace community priorities.

Tool 1: Example Timeline Chart

The sample timeline chart below has been filled in to demonstrate how you can summarize the detailed information about program implementation. Below this chart is an empty table that you can copy and paste. You can use it as a template and modify it for your own objectives and activities.

 

Tool 2: Blank Timeline Chart

 

 

Tool 3: Checklist for Following Funders' Guidelines

 

When applying for a grant, it is important to follow the funders’ specific guidelines exactly. Here’s a general checklist you may wish to use:

_____	Be sure to format and organize the grant headings exactly the way the Request for Proposal (RFP) requests. Answer all the questions in the order listed, and use the headings, subheadings, and numbers provided. Be sure to submit the number of copies the grantmaker requests.
_____	Include a cover letter to introduce your organization and your request, and to make a strategic link between your proposal and the funder's mission and grant making interests.
_____	Grant proposals should be typed and look professional. Make sure the grant is easily readable (e.g., the font size is not too small).
_____	Keep an electronic copy of the proposal for future reference. This can be adapted or modified for future proposals.
_____	Find out if you need to register to submit an application. Contact the funder to let them know you are applying, or set up a profile before submitting a grant (e.g., a federal grant needs a DUNS number). If any of these steps are required, make sure you complete them well in advance of the grant’s due date. If you contact the grantmaking agency, be sure to state not only your name, but also the group you are with.
_____	Find out if the grant needs a letter of intent (LOI), and submit one by the due date if required.
_____	Determine if you need letters of support or if you need potential partners to sign an MOU (Memorandum of Understanding).
_____	Pay attention to how reviewers are going to score various aspects of the grant, and give higher priority (proposal length, etc.) to areas that are more heavily weighted.
_____	When writing the grant, use bold or italics for emphasis of key points.
_____	Note that it is fairly common to need to include the following in the Appendices: proof of non-profit status, staffing overview or organizational chart (including board, staff, and volunteer involvement), and an audited income or expense statement.
_____	Once the grant is written, review it for clarity and consistency. Although grant applications are often a team effort, the final grant application should have one voice. It should read as if it were written with the consistent language of one writer.
_____	Be sure to make a strong case for the overall significance of the proposal and prospects for success. (State WHY this project should be done: a) at all, b) in this community, c) at this time, and d) by this organization.
_____	Be sure to ask questions of the funder, if needed – but read the application well and think before asking. If your organization is granted funding, there will likely be periodic reporting requirements to the funding agency.

 

 

Are you ready to write a successful grant proposal?

___You know what a grant is, and that funding comes from both private and public sectors

___You have reviewed recommendations for developing each standard section of a grant proposal, and determined how to clearly present information in a way that will elicit a positive response from grant reviewers

___You have conducted an efficient online search of supporting data for your needs / problem statement

___You have reviewed recommendations for presenting data in your grant proposal

___You have prepared a line item budget and its accompanying budget justification text

___You have written process and outcome objectives that are specific, measurable, achievable, relevant, timed, and challenging

___You have linked your budget request and your evaluation plan to proposed activities

___You have prepared a structured time line of activities using a GANTT chart

___You have identified feasible possibilities for how your proposed program can become self-sustainable

Congratulations! You now have the skills and tools you need to write a winning grant proposal!

EXAMPLE 1: COLLABORATION, NOT COMPETITION: THRIVE ALLEN COUNTY'S CAPACITY BUILDING INITIATIVES

Rural organizations face many challenges in applying for grants, including few major foundations located in or familiar with rural areas and the perception that a smaller population area means a smaller impact. But one nonprofit in Kansas is showing just how mighty a rural organization can be. Since 2019, Thrive Allen County has brought over $28 million into the county for a wide variety of projects, including public transportation, grocery stores, hiking trails, and much more.

In Thrive Allen County's early years, the executive director at the time decided to expand the organization's funding from local sources and start applying for state, regional, federal, and other funding sources. Expanding funding sources helped the nonprofit build capacity and avoid local budget cuts or changes in their early funding sources.

Thrive Allen County's grant writers “usually bring in more money for the community than they do for the organization,” Regehr said. The grant writing team helps governmental agencies and civic and nonprofit organizations apply for funding. “It's not just Thrive doing the work,” she added. “We're also working to empower all of them to do the work as well.”

In addition to Kansas, Thrive Allen County has worked with rural communities in California, Louisiana, Missouri, Nebraska, New York, Nebraska, and Oklahoma. “We are energized by working with other organizations in other communities,” Regehr said. “It is not just people learning from us; it's us learning from them. There are so many cool things that are being done across the nation.”

Thrive Allen County has even distributed funds to other organizations. During the COVID-19 pandemic, Thrive Allen County was asked by the county to distribute $2.4 million in SPARK funding, or Kansas's use of American Rescue Plan dollars. The money had to be spent in six months. Thrive Allen County met with people from different community sectors to create an advisory group and develop grant programs to distribute the money.

To read more about the success of Thrive Allen County, you can click this link to the full article on the Rural Health Information Hub website.

• What's the connection between business and community development?

• What's a business plan?

• Why should you make a business plan?

• When should you make a business plan?

• How do you make a business plan?

What's the connection between business and community development?

Although your primary goal may be improving community well-being rather than generating profit, business and earned-income activities can sometimes support community work. Nonprofit organizations and community initiatives need resources to sustain their missions, and selling appropriate products or services may be one part of a broader financial sustainability strategy.

Earned-income activities usually involve providing products, services, or both in exchange for payment. Examples include:

Products	Services
Books, guides, or educational materials	Childcare
Arts, crafts, or locally made goods	Food delivery or food-access services
Seeds, plants, or flowers	Gardening, landscaping, or yard services
Greeting cards or other printed products	Housing, workspace, or facility rentals
Clothing or organization-branded merchandise	Recreational, educational, or community programs

But is it ethical for a community or nonprofit organization to sell products and services?

It can be, when the activity is honest, transparent, fair, mission-aligned, and designed to provide genuine value. Products and services should be accurately described, appropriately priced, accessible to the people they are intended to serve, and delivered as promised.

Earned-income activities may also advance an organization's mission directly. For example, an organization might provide useful training, childcare, educational materials, recreation, food services, or other offerings that meet community needs while generating revenue to help sustain the work.

At the same time, organizations should consider whether a business activity could create barriers to access, shift attention away from the mission, compete unnecessarily with community partners, or place new demands on staff and organizational capacity.

And is it legal?

In many situations, nonprofit organizations may generate earned revenue and may end a year with a financial surplus. However, business activities must comply with applicable federal, state, and local laws, tax requirements, organizational documents, licenses, and regulations. Requirements may vary depending on the type of organization and the relationship between the business activity and its mission, so organizations should obtain appropriate legal, tax, or accounting guidance when needed.

Does this mean every nonprofit or community organization should develop business activities?

No. Earned income is only one possible sustainability strategy. Other sources may include grants, fundraising, membership dues, public funding, contracts, donations, and in-kind support. The decision to develop an earned-income activity should reflect your financial needs, organizational capacity, community priorities, mission, available alternatives, and realistic prospects for success.

Planning for overall financial sustainability requires a broader financial strategy. If earned-income or business activities are part of that strategy, a business plan can help you assess and organize them.

What is a business plan?

A business plan is a written document that explains what product or service you intend to provide, whom it is intended for, how the activity will operate, what resources it requires, how it will generate revenue, what risks it faces, and why you believe it can be financially and operationally sustainable. The plan should be supported by relevant evidence, financial information, community or market research, and realistic assumptions.

Why should you have a business plan?

• Developing a written plan can clarify your thinking, assumptions, priorities, and responsibilities.
• A clear business plan can increase confidence among staff, board members, community partners, funders, lenders, and other potential supporters.
• A business plan can help identify opportunities, costs, risks, capacity needs, and potential problems before substantial resources are committed.
• A plan can help determine whether a proposed business activity is financially viable, mission-aligned, equitable, and appropriate for the community or market it is intended to serve.

When should you make a business plan?

• When you are seriously considering starting an earned-income or business activity
• When you need greater clarity about costs, operations, staffing, customers or users, risks, and expected revenue
• When you want expert, community, customer, or partner feedback on the details of your idea
• When you are seeking grants, gifts, loans, investment, supplies, facilities, partnerships, or other forms of support
• When you need to determine whether an existing business activity should continue, expand, change, or end

How should I make a business plan?

We'll cover three main elements:

• What should the plan contain?
• How should the plan be written?
• How should the plan be presented?

What Should the Plan Contain?

Business plans vary in length and format depending on the organization, audience, activity, and purpose. Most plans, however, include several common components. Adapt them to your situation rather than treating one format as mandatory.

Cover page

Include the title of the plan, organization name, date, and relevant contact information, such as a phone number, email address, website, and mailing address when appropriate. The title should clearly identify the activity or purpose of the plan.

Table of contents

For a longer plan, include a table of contents with clear section headings and page numbers or digital links. Make the document easy to navigate whether it is read in print or electronically.

Executive summary

The executive summary is often one of the most important parts of the plan. It is usually written after the rest of the plan and provides a concise overview of the proposed activity, the need or opportunity it addresses, whom it will serve, how it will operate, expected financial results, major risks, and what support or decision is being requested.

If your executive summary is effectively written, it will:

• Communicate your organization's vision and purpose for the activity
• Establish your organization's credibility and relevant experience
• Describe the product or service and how it will be provided or sold
• Explain the need, demand, or opportunity the product or service addresses
• Summarize major implementation steps
• Give the reader enough information to understand the plan and decide whether to review the details
• If funding is being requested, state the amount or type of support needed and explain how it will be used

Description of your organization

This section should explain who you are and why your organization is positioned to carry out the plan. It may include:

• What your organization does
• Where it operates and the communities or markets it serves
• How long it has been operating
• Its mission, goals, and objectives
• Relevant accomplishments and experience
• Current funding or other resources relevant to the plan
• Experience providing or selling similar products or services
• What distinguishes your organization, including relationships, expertise, community knowledge, accessibility, or other strengths relevant to the activity

Description of your management and implementation capacity

If you are seeking outside support, describe the people and structures responsible for carrying out the plan. Briefly identify key staff members, officers, project leads, board members, advisors, or partners and explain the experience or qualifications relevant to the activity.

This section should demonstrate that the organization has, or has a realistic plan to develop, the leadership, staffing, partnerships, financial systems, and operational capacity needed to carry out the proposal responsibly.

Description of your product or service

Describe clearly what you intend to provide. What is the product or service? What needs or opportunities does it address? What features, benefits, accessibility considerations, or limitations should customers or users understand?

Use clear examples. If the offering is a physical product, photographs, drawings, samples, or product information may be useful. If permits, licenses, certifications, accessibility standards, safety requirements, or other regulations apply, identify them.

Explain the value the product or service provides. When appropriate, include evidence of previous demand, customer or participant feedback, testimonials used with permission, pilot results, or relevant research.

Information about your market and community

Your reader will want to understand who is likely to use or purchase the product or service, what evidence supports that expectation, and how you plan to reach those people.

This may be one of the most detailed sections of the plan. Consider the following:

• Your market means the customers or users you intend to reach. How many potential customers or users are there? Where are they located? What needs, preferences, circumstances, or characteristics are relevant to the offering? Are there barriers involving affordability, transportation, language, disability access, technology, or other factors? Your projections should be based on realistic evidence that enough people are likely to use or purchase the offering to support the level of revenue you expect.
• Your market research documents why you believe people will use or purchase the product or service. Relevant evidence might include data on comparable offerings, surveys, interviews, focus groups, community assessments, pilot programs, sales data, user testing, or feedback on prototypes. Where the activity directly affects community members, include their perspectives rather than relying only on assumptions about what they want.
• Your marketing and outreach plan explains how people will learn about and access the offering. Options might include a physical location, partner organizations, community events, email, websites, social media, online marketplaces, digital advertising, print materials, referrals, phone or text communication, or other channels appropriate to your audience. Consider accessibility, language, digital access, cost, and trust when choosing communication channels. Include alternative strategies in case one approach does not work as expected.

Information about comparable providers, competition, and collaboration

Most products or services already have alternatives. Other businesses, nonprofits, public agencies, informal community networks, or organizations may offer similar or related services.

Describe relevant alternatives and comparable providers. Rather than assuming your offering must be "better" than everyone else's, explain what distinguishes it, what need or gap it addresses, what value it provides, and why there is sufficient demand or community benefit to justify the activity. Also consider whether collaboration, referral, shared services, or partnership with existing providers would serve the community better than unnecessary duplication.

Details of your operating plan

Explain how the product or service will actually be produced, acquired, delivered, managed, and supported.

An operating plan should answer questions such as:

• What are the major production or service-delivery processes?
• Who will carry them out, and where?
• What staffing, contractor, volunteer, or partner capacity is needed?
• Is the offering currently operating, being piloted, or still in development?
• What equipment, technology, or other infrastructure is required?
• Is a specific physical or digital location required?
• How will supplies, inventory, scheduling, vendors, and other operational needs be managed?
• What laws, licenses, permits, safety requirements, accessibility requirements, or other regulations apply?
• What staffing, workforce, compensation, maintenance, and training considerations need to be addressed?
• How will products or services reach customers or users?
• How will quality be monitored and improved?
• What contingency plans exist if costs rise, suppliers fail, demand changes, staffing becomes unavailable, or other problems occur?
• How will customer or user satisfaction, accessibility, and experience be assessed?
• Would a process map, workflow diagram, or other visual help explain operations?

You may not be able to answer every question immediately. Identifying unanswered questions is itself useful because it shows what needs additional research, testing, planning, or consultation before the activity begins.

Financial information

This section should show whether the activity can generate enough revenue and other support to cover its costs and contribute appropriately to the organization's financial goals.

Relevant financial information may include:

• Historical revenue and expense data for the product or service, if available
• Revenue projections for several future periods
• Projected costs over the same periods, including staffing, benefits, materials, facilities, technology, marketing, accessibility, administration, and other relevant expenses
• The assumptions behind your revenue and cost projections
• Cash on hand and other assets available to support startup or ongoing operations
• Additional funding or financing needed to begin or sustain the activity
• The point at which revenue is expected to cover operating costs, when applicable
• Major financial risks and how the organization plans to respond if revenue or costs differ from projections

If you are seeking a loan or other financing, explain how the funds will be used, what revenue or other resources will support repayment, and what assumptions underlie the repayment plan.

Common financial documents may include a balance sheet, income statement or forecast, cash-flow projection, startup budget, and other schedules appropriate to the activity. Use the formats that best help readers understand the financial condition and projections of the proposed business activity.

Timelines

Include a timeline showing major action steps, responsibilities, decision points, and expected completion dates. A clear timeline helps both internal planners and potential supporters understand how the activity will move from planning to implementation.

Appendices

Supporting information that would interrupt the flow of the main plan can be placed in appendices. Examples might include staff qualifications, letters of support, detailed market research, survey results, permits, technical specifications, financial schedules, partnership agreements, photographs, or other relevant documentation.

These are common business-plan components. Adapt them to the scale and purpose of your activity, then focus on presenting the information clearly and accessibly.

How should the plan be written?

Your plan should be clear, concise, accurate, evidence-informed, honest, and appropriate to its intended audience.

Common problems in business plans include:

• The writing is unclear or difficult to understand.
• The plan is unnecessarily long or does not distinguish key information from supporting detail.
• The organization or layout is difficult to follow, or useful visuals and explanations are missing.
• The executive summary is missing or does not accurately summarize the plan.
• The plan uses excessive technical jargon or does not clearly explain why the product or service is useful.
• The plan does not adequately explain whether the organization has the capacity and qualifications to carry it out.
• The intended market or users are poorly defined, or relevant market and community research is missing.
• Comparable providers, competitors, collaborators, or alternatives are not discussed.
• Financial information or assumptions are unclear, incomplete, or unrealistic.
• The plan does not clearly explain the value of the activity or why a funder, lender, partner, customer, or other supporter should participate.
• The plan does not address important risks, accessibility considerations, community impacts, or possible unintended consequences.

Review these issues before finalizing your plan.

How should the plan be presented?

Your plan should be professional, accessible, easy to navigate, and appropriate to how your intended audience will receive and review it.

Consider the following:

• Provide the plan in the format requested by the intended audience, whether that is a digital document, online application, presentation, printed copy, or another format.
• Use enough detail to support informed review without making the document longer than necessary. Length should reflect the complexity of the proposed activity and the expectations of the intended audience rather than an arbitrary page count.
• Use headings, tables, charts, graphics, and other visual elements when they improve understanding. Make sure digital and visual materials are accessible.
• For digital plans, use clear navigation, readable formatting, accessible document structure, descriptive links, and appropriate file formats. For printed plans, use clear organization and durable presentation appropriate to the audience.
• Have several people review the plan for accuracy, clarity, accessibility, consistency, and errors before it is submitted or distributed.

A professional presentation should support the content rather than distract from it. Clear writing, accurate information, accessible formatting, realistic financial assumptions, and evidence of community or market understanding are more important than elaborate design.

Tool 1: Sample Balance Sheet

If you have a real business idea in mind, try filling out this form (possibly with some small adaptations) for your proposed product or service. What conclusions do you draw?

	Current Year	Forecasted periods
Assets	$	$
Current Assets
Cash (Note)
Inventory (Note)
Prepaid Expenses
Total current assets
Property equipment (Note)
Equipment
Office furniture and fixtures
Leasehold improvements
Less - accumulated depreciation and amortization
Other assets:
Organization costs, net of accumulated amortization (Note)
Liabilities and stockholders' equity
Current liabilities
Current portion of long-term obligations
Accounts payable (Note)
Accrued expenses
Federal and state income taxes payable
Total current liabilities
Long term obligations (Note)
Stockholders' equity
Common stock, no par value
Authorized - shares
Issued and outstanding - shares
Retained earnings (accumulated deficit)

A business plan should include at a minimum the current year's financial results and a forecasted financial statement which includes significant forecast assumptions. The forecasted financial statements should be presented for a minimum of three years with five years preferred. The forecast should be presented monthly for year one, quarterly or monthly for year two, and annually for all subsequent forecasted periods.

Practical note: Total liabilities and stockholders' equity should equal total assets.

Tool 2: Sample forecasted statements of income and retained earnings

	Current Year	Forecasted periods
Revenue (Note)	$	$
Cost of sales (Note)
Salaries and wages
Payroll taxes and fringe benefits
Product costs
Rent expense
Equipment lease
Utilities
Depreciation and amortization
Total operating expenses
Gross margin (deficit)
Selling, general, and administrative expenses (Note):
Advertising
Administrative
Salaries and wages
Payroll taxes and fringe benefits
Commissions
Insurance
Depreciation and amortization
Total selling, general, and administrative
Income from operations
Other (income) expenses
Interest expense
Interest income
Total other (income) expense
Income before provision for income taxes
Provision for income taxes (Note):
Current federal and state income taxes
Net income (loss)
Retained earnings, beginning of period
Retained earnings, end of period

Practical note: Ending retained earning should agree with the ending retained earnings number on the balance sheet.

What is a business plan?

___A business plan is a written document that describes in detail what kind of business you intend to operate, how you intend to operate it, and why you believe you will succeed

___You understand that it is legal for a nonprofit group to make a profit

___You understand there are other ways to ensure your financial sustainability

Why should you have a business plan?

___To clarify your own thinking

___To raise confidence among group members

___To raise confidence among potential outside backers

When should you make a business plan?

___When you are seriously thinking about embarking on a business venture

___When you need clarity on the business details

___When you want expert feedback or advice on the specifics of your ideas

___When you need to attract outside help

How do you make a business plan?

___Include the following in your business plan:

• A cover page
• A table of contents
• An executive summary
• A description of your organization
• A description of your management
• A description of your product or service
• Information about your market
• Information about your competition
• Details of your operating plan
• Financial information
• Timelines
• Appendices

___Write the plan simply, clearly, honestly, and to the point

___Avoid common pitfalls such as:

• The writing is unclear
• The plan is too long
• The layout is poor and/or illogical
• An executive summary is omitted
• There is too much technical jargon
• There is insufficient detail
• The market is not defined, or a marketing plan is missing
• No mention or sketchy mention is made of the competition
• The financial information given is not straightforward
• The reader is given no compelling reason to invest in the plan

___Package the plan professionally by ensuring that it is:

• Printed it on high-quality paper
• Approximately 20 pages
• Printed in color with tasteful graphics
• Bound according to the standards of your readers
• Totally error-free