Maybe you’ve experienced this scenario before: A well-intentioned member of your organization hears about an ‘amazing grant’ that could fund a new project.  They rush into your office with breathless anticipation of all your organization will be able to do with this new- found wealth. In a torrent of excitement, the staff member charges off at the chance to enhance their grant revenue. But how do you know it’s truly worth their time? It’s important not lose focus on your primary objectives – both strategic and operational.

Here are 5 questions to determine whether a grant is a star (worth pursuing) or a black hole (not worth your time):

1. Does this grant—and the associated program—fit within the clearly defined bounds of your mission?

Before the cavalry rides off with their grant riding pens held high, you as the financial leader of the organization will need to lead the staff down the path of answering a few questions to determine if this is a star grant or a black hole project. This should be a pretty easy question to answer. If not, before moving to the next question, it may be time to have senior leadership and the board take a strong look at your stated mission and ascertain if it is still on-message today.

2. Does this grant & project fit within the long term strategic plan?

If you are asking yourself what your strategic plan is in the first place, stop, do not pass go and revisit question one! Find your plan and then answer does this new offering fit? Seriously, a strategic plan must be a living, breathing, organic document that key decisions are based against.

3. Does your organization have the capacity to execute with high quality on this newly proposed program?

If yes then proceed – but don’t go into this with rose-colored glasses. Are there programs that fit into your plan that are scheduled to begin beyond the current operating cycle? How is your unrestricted giving – flat, growing , or declining? You must evaluate all of these factors.

4. Will this funding be in place for the foreseeable future?

If this is a one-year grant, what is the likelihood that it will be on a renewal schedule for at least several years moving forward? If it’s not likely to renew, is your development team ready to obtain support for continual funding of this program without the grant?

5. Will operating funds for administrative burden be covered as part of the grant, or will the organization need to find additional funds?

Does the grant provide an indirect cost allocation to cover administrative overhead or will your organization have to reallocate administrative budget to cover the grant? You must determine this before proceeding.

If the answer to all of the above questions can be fully answered, then the program and the associated new grant are likely worth further exploration. Here’s to a star in the making!

ABOUT THE AUTHOR

Tom Walker is the Product Manager for Blackbaud’s financial solutions. Tom has spent 10 years working with nonprofits to optimize their accounting processes and systems. Additionally, Tom has 5 years of experience as a CFO at a nonprofit. – See more at: http://npengage.com/nonprofit-fundraising/how-reconcile-gaap-and-non-gaap-results/#sthash.r2mznFT8.dpuf

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