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The 4 Critical Steps to an Effective Grant Research Strategy

“It doesn’t hurt to just apply.”

In my years as a grant strategist, I have heard this so many times, and it’s just not true. Seeking grants isn’t about throwing things at the wall and seeing what sticks; it’s about time, strategy, and resources — and about using them wisely. 

RBW Strategy has helped our clients secure millions in funding and we’ve managed over $2.5 billion in these funds, so we know what it takes to identify, pursue, and lock in funders. 

Ready to take the guesswork out of your prospect research strategy? Use these 4 proven steps.

1. Identify Your Strategic Funding Priorities

If you were working on a term paper, you wouldn’t start with the writing at the onset — you would need to do your research. The same applies to grant seeking. Use this research criteria to get started.

  • Needs Assessment: Organizations must adapt and change constantly, which has been especially true over the past few years. The grant-seeking approach of throwing darts on a board and seeing what sticks is no longer relevant. As Simon Sinek says, the best place to start for any fundraising activity is to start with your “Why.” As an organization, do you have a strategic plan? If so, what are your key drivers and priorities? How do grants help meet your goals? If you haven’t established these priorities, brainstorm as a group (the more representation from your organization, the better) and determine what you hope to achieve.
  • Keep, Change, Eliminate, Grow: From that initial brainstorming and prioritization process, you will likely be looking at your service offerings and focus areas to decide whether the programs and initiatives will: a) stay the same with no changes anticipated, b) change in some way either in leadership, approach, geographic research, or focus area, c) be eliminated, as they are no longer relevant as they do not align with your core priorities, or d) require scaling to reach additional individuals. Grants can be leveraged to multiple purchases, but aligning the priorities with your program path will help create more concrete areas for fund seeking.
  • Outcomes-Based Budgeting: Many organizations tether themselves to a previously set budget or try to cobble together a budget to meet funder requirements. As an alternative, consider this: what if we started by thinking about the outcomes you hope to achieve and then determine the specific budgetary requirements based on those goals? I wrote an article on outcomes-based budgeting for the Grant Professionals Association, and there’s even a great tool to help you build out that budget using an impact-focused approach.
  • Focusing on What’s Important: Once you have the strategic guidance, an understanding of the service offerings, and the budgetary items for which you are seeking funds, now we can prioritize. Start with about 2-4 funding priority areas for new funding research and build from there. You can always grow the potential research, but starting small with a more refined approach is best.

2. Create the Grant Funder Criteria List

You’ve already taken huge steps by completing the strategic vetting process. Now comes the fun part. 🙂

As a government contractor, I worked on a couple of projects where we had to work with federal agency staff to develop user requirements for new grant management systems. It requires understanding how the system will be used, who is using it, and the needs this system should contain to be successfully deployed. The same kind of approach is used for grant seeking. Before research begins with new funders, identify your use case and the criteria for assessing a best-fit funder, which include:

  • Geographic Location: Are you seeking funders nationally, regionally, or locally? If you are a smaller organization, look at local funders (especially those new to grants). National funders give out larger awards but require more runway between prospect research and award.
  • Scope: Based on your priorities, what kinds of funding are you seeking? Common areas include capacity building, program-specific, capital, training/outreach, conferences, and the elusive general operating support. Identify those target areas so you can match the funder’s eligibility regarding the funds they distribute and the types of organizations they distribute to.
  • Awards: If you’ve identified the funding you want to receive, this should help you determine the award amounts that would best fit. Are you seeking funding above $25,000 or even $100,000? Is there a minimum award request for your organization? This will allow you to target certain funders based on their average gifts.
  • Peer Reviews: Identify 3-5 peer organizations that do similar work or have similar missions in your area. Look at their annual reports to see who funds them, which can be a helpful benchmark when identifying new funding sources.
  • Unsolicited Applications: Some funders (especially private and family foundations) may only give to certain organizations. Do you have a robust enough team and board to cultivate relationships with these funders? Remember, this is a longer-term view, so you might not reap the benefits in year one, which can take time. However, as a team, you should decide whether to go after funding when unsolicited applications are not accepted.
  • Deadlines: Some applications are due by specific dates, while others are accepted on a rolling basis. Look at your priorities and the deadlines to plan ahead and give yourself enough time to apply. And plan ahead: remember, grants should never be used as a stop-gap measure for fundraising purposes. 

3. Assess the Strengths of the Identified Grant Funders

Now comes the part you have been waiting for — it’s time to dig into the research! One of our favorite tools to use is Instrumentl, which you can try free for 14 days even without an account. The National Council of Nonprofits also provides information on several other research tools. 

Even with helpful resources, the research process can feel daunting. How do you determine which funders are a strong fit? How do you review the data? Let’s think through this step-by-step so you can feel confident throughout this effort.

  1. Data Dump: Once you identify your criteria and leverage those data points in the research tool, you’ll likely gather a plethora of information on funders. Download all of the information so you can begin the vetting process.
  2. Eliminate: Once you begin looking at the data, are there funders you can eliminate at the beginning based on their eligibility criteria and your best-fit-funder user criteria? For example, if your threshold was $25,000 for your minimum award amount, and the funder’s average gift is $10,000, this will not be a fit for you. What about a funder that only gives in Ohio, but your organization is in Indiana? t. You can already cross some funders off the list.
  3. Dive in: Once you’ve eliminated those from the onset, you can start digging into the research even more. First, you want to see how many data points you’ve established through your criteria match the funders’ giving approach. Take a closer look at your criteria and how it aligns with your funders. Think about geographic reach, award amounts, scope, etc. Carefully review to see if they are also giving to your peers. During this stage, you might want to review the funders’ websites and 990 forms to better understand their giving patterns, application processes, and priorities, as some of the information might deviate from the research database.
  4. Put it All Together: Now that you have gathered this information, it’s time to combine it. I like this spreadsheet, as it can help you quantify how you will rank these funders and prioritize the applications. There are some great templates that help you rank prospects into categories (low, ,medium, high) based on how each criterion is scored. 

4. Plan for the Grant Application

As you go through the research, this is a good opportunity to meet as a team to decide the best approach to tackle the grants. Refer to this checklist as you begin the process: 

  • Who will lead the effort on each application, and will some involve multiple people?
  • What is your cultivation strategy for each funder, and who is leading that effort? How are you engaging your board?
  • Do you have clear language and case statements for the priority areas?
  • Have you contacted other stakeholders within your organization (finance, programs, etc.)  and other partners to give them some advanced notice of the applications you plan to pursue?
  • Do you have all the necessary attachments housed in one location, and is all the information (i.e., board list, financial statements, organizational chart, list of previous funders, budgets) current?
  • Are you meeting regularly to track progress and ensure information is being gathered? Is this information being tracked in a shared system?

Ready to improve your prospect research strategy and increase your chances of finding more grants? Let’s chat to see how RBW Strategy can coach or implement your prospect research process.

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