What Do Grant Organizations Look For? What Funders REALLY Want When They Make Decisions About Where the Money Goes

Funders, defined as people at grant organizations, approve fund requests. They can be a nonprofit organization’s bane or best friend. A new report, called Social Solutions: Foundation Report Study, examined the metrics by which foundations and granting organizations determine which nonprofit organizations to awards funds. The results are surprising and tell us a lot about what nonprofits can do to increase their opportunities to receive funding.

The Three Most Important Considerations for Funding

Funders overwhelmingly agreed on the main consideration for granting an award: IMPACT.

98% of those responding to the survey picked “impact” – as in the award they gave would make an impact on the project or people – as the most important consideration for funding.

Lagging behind impact but coming in second is MISSION. How well does the project or request match the fulfillment of the nonprofit’s stated mission?

And third, legal nonprofit status was cited as the third most important consideration. That was surprising given that one would assume that anyone applying to a foundation or grant organization would already have legal nonprofit status before requesting such funds.

Evaluating Impact

It wasn’t just the overall impact that was important to these funding organizations. To evaluate impact, they look at several criteria. This included:

  • Outcomes
  • Detailed data
  • Consistency to mission
  • Outputs
  • Community
  • Financials
  • Other criteria

Funders are also seeking clear, concise reporting, as well as strong community outreach. Communication around projects and nonprofit goals are also important. The funding organizations wanted to be sure that organizations are “putting their money where their mouth is” and doing what they state they will do in their mission and materials.

Reports Are Important

Reports back to the foundation are also an important part of the process. What the foundations and granting organizations seek in reports includes plenty of stories about how the money is making an impact, as well as the data to back that up. Spreadsheets, paper-based reports, and other documentation lends credibility and credence to reports and supports the nonprofits’ assertions of how money is being used or will be used.

One thing is certain: more feedback is required from nonprofits as part of the grant process than ever before. Funds are one thing, but telling a story about the funds is important.

Donors Like to See Dollars in Action

Donors like to see their money in action, making an impact, effecting change, and supporting the mission of the nonprofit. That goes for individual donors as well as foundations and granting organizations.

Large or small, all funders preferred to see stories (82%) over other forms of reports. Why stories? Stories paint a great picture of how funds have made a difference. That doesn’t mean that stories have to be written out. They can be told through images, slideshow presentations, or videos, but illustrating the impact of the funds on the lives of others was deemed very import for the funders to decide to whom to give money..

Your Take Away: Get Your Ducks in a Row

The big takeaway for nonprofit organizations is to be sure that you have your entire package prepared as best as you can before sending it to a funder. If your nonprofit status isn’t fully documented, your application may be pushed to the bottom of the pile.

Documenting achievements in both qualitative and quantitative formats is also important. Qualitative documentation such as stories, testimonials, and presentations enhances the emotional impact of your nonprofit’s work, while quantitative data support assumptions about its effectiveness.

Funders have money to give to worthy causes. Knowing what they are looking for and tailoring your grant paperwork to their requests can help you achieve your nonprofit’s funding goals.

About Welter Consulting

Welter Consulting bridges people and technology together for effective solutions for nonprofit organizations. We offer software and services that can help you with your accounting needs. Please contact Welter Consulting at 206-605-3113 for more information.