Grants are a major source of funding for NGOs around the world. With an estimated 250,000 institutional donors worldwide providing billions of dollars in grants every year, it is no wonder NGOs are very eager to get a piece of the pie. However, grant fundraising has its own challenges and minimum requirements.
Here are five things an organization should have to truly be ready to apply for grants.
Is your NGO legally registered in the country you operate in? What about in the country you want to fundraise from? Being a registered non-profit is a basic requirement for many donors. Registration may be needed to meet certain standards, and it can also be seen as a sign of respectability and commitment. For some organizations, it may be difficult or even impossible to become officially registered. It is still possible to win grants in these cases, but it will be much more difficult. Unregistered NGOs need alternative ways of proving their credibility and meeting donor due diligence and/or legal requirements.
You should have a project plan ready to apply for a grant. This may seem simple, but in fact, many first-time grant applicants do not completely know the difference between a project and a program. It is necessary to show potential donors a well-defined project with a timeline, planned activities, expected results, and an M&E plan for reporting.
For some NGOs, defining projects may be difficult. For example, running an orphanage is an on-going effort with no clear start and end points. Similarly, NGOs working on social change sometimes struggle to prove impact. NGOs in these situations may try to find non-project support, but it is typically still easier to design a project.
Running an NGO is hard work. Donors want to know if your organization is capable. While this requirement varies significantly, most donors look for an organization to have 3-5 years of activity before considering them for funding. This means having 3-5 years of being registered, experience actively running projects, financial records, evaluations, and NGO management experience. This means many new NGOs may need to work with volunteers, in-kind donations, partners, self-funding, fees, or individual donations until they have the experience donors look for.
Donors want to make sure that you will spend their funding wisely. It may seem unfair that NGOs need money to get money. But it is also unfair to ask donors to have blind faith in the NGOs they fund. Even if an NGO has the best intentions to use the grant money properly, inexperienced staff with no oversight or accounting experience may make costly mistakes.
Researching grant opportunities, writing proposals, and monitoring grants are very time-intensive. If your organization does not have enough staff or time to adequately complete these tasks, then it will be very difficult to successfully apply for and win grants.
There are many challenges new NGOs face. Securing grant funding is just one of many. Fortunately, there are many resources on proposalsforngos.com, fundsforngos.org, and other places to help you get going!