When you seek grant funding to support your nonprofit’s projects, efficiency is vital to ensure you make the most of all your time and hard work. This doesn’t just mean drafting your proposals and getting them out the door quickly. Think bigger.
How often do you win the grants you apply for? Do you feel confident in your chances each time you send off a new proposal? If you add up the time you spend applying for grants, is the total amount of funding you win more or less valuable than all that time?
Effectively evaluating and prioritizing grant opportunities will maximize the value that your organization generates from grant seeking.
However, this might be easier said than done if you don’t have a ton of grant experience under your belt. Even experienced grant seekers may struggle with the prioritization process because so many factors can affect the calculus of your decisions.
Let’s say you’ve found two potential grants that could make a big difference for your budget and projects. You only have time right now to collect materials and apply for one before their deadlines—how do you choose which one to focus on?
This quick guide will help you answer that question. We’ll review the importance of effective grant prioritization and the key criteria you must understand as a grant seeker to make confident prioritization decisions.
Why is grant prioritization so important?
As mentioned above, you should seek grants efficiently. Put another way, your prioritization process should revolve around return on investment (ROI):
- When you prioritize the grant opportunities most likely to yield more net benefits than the resources you put into them (time and energy that could otherwise go to other activities), you essentially generate a positive ROI from those efforts. A positive ROI is then reflected in won funding (and also in the relationships built and lessons learned along the way).
- However, when you expend resources to apply for grants that you’re not as likely to win, you sacrifice time and energy that could have done more for your mission elsewhere. If you then don’t win the grant, you’ve effectively wasted those resources.
It might be helpful to consider the concept of opportunity cost—what you give up to pursue one priority over another. For example, should you apply for that grant or do a quick donor outreach blast before your annual campaign? Would the value of the grant outweigh the increased donations you might receive after connecting with donors? Which priority is more strategically important for your nonprofit right now? How likely are you to win the grant, anyway?
Now imagine you’re deciding between two grant opportunities. How can you tell which one will generate the greatest return on the effort? What’s more important: A high award value or stronger chances of winning? How quickly and easily can you craft a high-quality proposal for each grant?
Important questions, and not easy ones! But when you master the balancing act of ROI and opportunity cost, you set your organization up for long-term success.
Beyond consistently supporting your projects, a stellar track record of grant wins can energize your team, expand your network of funders, and lay the groundwork for valuable future relationships. Or, if you’re a grant writing freelancer, effective analysis and prioritization are invaluable skills that will help you win the trust of long-term clients.
On the flip side, choosing the wrong grants to focus on can derail your efforts, lower your overall ROI, and make grant writing more of a frustrating chore than a sustained revenue source to fuel your mission’s growth.
What criteria can help you choose grant opportunities?
Let’s take a look at the specific criteria that grant experts rely on to help them prioritize opportunities for their organizations or freelancing clients:
Alignment
Alignment between the grant opportunity and your proposed project is arguably the most important criterion to use when comparing grants.
To align well, a few elements need to match or complement one another:
- The funder’s mission
- The funder’s track record of funding organizations and projects like yours
- The grant’s explicit purpose and requirements
- Your organization’s mission
- The purpose and impact of the project you’ll propose for funding
You can find the funder-specific information in several places, including the funder’s website, press releases, and posted Form 990s. Many leading grant databases compile publicly available information in one place to simplify the research process for you.
Additionally, you can directly reach out to the funder with specific questions. This way, you’ll get quick answers and put your organization on the funder’s radar.
Competitiveness
When you find an appealing grant opportunity, take a moment to consider how many other nonprofits might also find it appealing. How much attention is the opportunity likely to receive? This exercise helps you roughly gauge the competitiveness of a grant.
Think about the broadness or narrowness of the grant’s focus, the prominence of the funder, and the value and structure of the funding. For example, which of these opportunities would likely attract the most attention?
- A high-value, unconditional grant (without a more complex contingent or reimbursable structure) from a nationally recognized funder that seeks proposals from broad swathes of missions for general “community development” projects
- A lower-value, contingent grant from a regional funder that seeks proposals specifically for afterschool youth services programs and projects in a specific state
The second example would receive much fewer proposals than the first. If your nonprofit just happens to operate in the funder’s region and focus on youth services, you’d likely be an excellent candidate!
This process is naturally a bit subjective and nuanced, requiring you to make some assumptions and learn from experience over time.
You can also pick up tricks of the trade from industry pros, as well. For example, the experts at Learn Grant Writing teach grant writers to calculate competitiveness, recommending individuals prioritize opportunities from funders where they have at least a 20% chance of success.
Efficiency
Now, turn your attention back to the concepts of ROI and opportunity cost. Say you’ve found a well-aligned grant opportunity that doesn’t seem to be highly competitive. There’s one more important question to consider: How worth the effort is this grant opportunity? What’s its opportunity cost?
Your time, your team’s time, the tools you use, and any other resources you expend to pursue a grant aren’t free.
As with competitiveness, you can roughly estimate the opportunity cost and potential ROI of a grant by simply thinking through how its value, if won, stacks up against the time you’ll spend to apply for it and what activities you’ll give up to do so.
You could also break out the calculator again for a more quantitative approach. Try using your hourly pay rate to calculate roughly how much labor value will go into applying for a grant, then compare this number to the grant’s award value. This number should be less than the award value; if it’s not, you’d technically lose value by spending time pursuing the grant.
This process helps pin hard numbers to your opportunity cost calculations, but it can be quite nuanced, so use it with caution. For example, grant newcomers may struggle to accurately estimate work hours (always round up if you’re unsure).
Your organization’s unique priorities and situation also come into play. You might be willing to sink more time than usual into the perfect grant opportunity that furthers your strategic goals. Or you may decide to sacrifice some efficiency in order to start winning your first grants, even if they’re relatively low-value. Stay mindful of your organization’s priorities and think critically as you compare grant opportunities.
The key takeaway
How you weigh these three criteria (alignment, competitiveness, and efficiency) is up to you and your nonprofit’s current needs and goals. The key to success is simply to understand and actively use these helpful comparison tools. Rely on them each time you research new grants.
Without a method for consistently analyzing your likelihood of winning a grant and the value you’ll generate (or lose) by pursuing it, you risk wasting time, money, and your team’s forward momentum.
You might take a formal approach with spreadsheets and calculations to fully optimize your Grant Funding Strategy, or you could simply mentally run through these three criteria and jot down some notes—whatever serves your needs and helps you generate more value with your time! With the right process in place, you’ll safeguard your resources and your team’s enthusiasm for continued grant success.