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Grant Writing to Crowdfunding: What Non-Profit Administrators Need to Know

Successful non-profit agencies — from global humanitarian non-governmental organizations to local theater groups — are all largely in the business of raising money.

To avoid stumbling over financial obstacles, a nonprofit needs a strategic plan firmly rooted in fund-raising best practices for appealing to donors and locating and obtaining financial grants and other sources of revenue, including crowdfunding.

Moreover, establishing an agency-wide culture of support for the strategic financial plan is critical to a nonprofit’s success in realizing its vision.

“If every member at every level of the organization is committed to both the mission and the fundraising, the non-profit will have a substantial advantage in receiving support of all kinds,” according to The BNI Foundation, a global grant-referral organization.

Benefits and Costs of Obtaining a Grant

The first hurdle to obtaining a grant is locating a source with funding requirements that align with the nonprofit’s mission. The next is writing the proposal itself.

A successful funding request returns two significant advantages. First, it provides a cash infusion. Second, winning a grant reinforces an agency’s credibility on future funding requests, according to Donorbox, an agency that helps nonprofits apply for grants. Still, every benefit comes with a cost.

“Grants can be very time-consuming. It first takes time to develop grant-writing skills that actually win grant proposals, then it takes time to write a winning application, and then it can take quite a while for you to see the funds in your bank account,” Donorbox warns.

The Elements of a Winning Grant Proposal

A successful grant proposal contains specific elements of the project using relevant keywords, notes how it aligns with the grantor’s mission and vision and outlines how the money will be used. While the form of requests for proposals varies from grantor to grantor, they generally include the following elements:

  • Executive summary: An overview of the need, the reasons for the need, the expected outcomes and the measurements of success
  • Statement of need: The context and background of the problem with an explanation of how the grant will be used to solve it
  • Budget and resources: An account of where each dollar will go
  • Evaluation: A statement of what the project will accomplish, an estimation for how long it will take and the metrics for success

“In grant writing, we hear a lot about objectives, goals, outcomes, outputs, evaluations, measurables, logic models. The evaluation aspect of your proposal is often the most intimidating, in part because of all that jargon,” says independent fundraising agency, Professional Grant Writers.

Crowdsourcing and Its Legal and Regulatory Elements

Crowdsourcing, also known as crowdfunding, typically uses social media and other online platforms for appeals and can be a powerful tool for recruiting new donors.  

Nonprofits that include crowdsourcing in their overall funding strategy must be aware that all state and federal legal and regulatory requirements, as well as ethical and transparency obligations that govern traditional appeals, also apply to online money-raising tactics.

The North Carolina Center for Nonprofits lists several legal traps nonprofits should consider before investing time and money in a crowdfunding campaign. In order to avoid those pitfalls, non-profit professionals should:

  • Ensure proper governance to avoid funds being channeled to others
  • Provide transparency regarding fees and the amount of each donation going to the nonprofit
  • Require internal oversight of third-party management of the crowdfunding campaign

“While a powerful tool, crowdfunding also raises a host of legal issues nonprofits should be aware of,” the organization says.

Understanding Fundraising for Non-Profits

While having a heart for social and environmental causes is necessary for success in a non-profit career, it requires a complete understanding of funding strategies and tactics.

If you are considering a career in the non-profit sector, a Master of Public Administration with a non-profit track that covers all stages of writing successful proposals can open doors, particularly if it includes public budgeting, finance and economic issues and concepts.

Learn more about Arkansas State University’s online Master of Public Administration in Non-Profit Management program.

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