If Our Nonprofit Receives a Foundation Grant, How Long Will It Last?

Considering grant duration when seeking funding from public or private foundations.

Question

I'm part of a startup nonprofit, and we're just scraping by financially. Frankly, everyone is a bit exhausted after the startup efforts. We're looking into the possibility of applying for grant money. Wil this allow us to relax with a balanced budget for a while? For how long, exactly?

Answer

As a nonprofit or charitable organization, the process of seeking grants from public or private foundations can seem like a lot of waiting for a pot of money that's then gone all too soon.

It frequently takes up to a year just to receive an answer to your request for funding. Then, depending on how payment is to be arranged, you may have to wait for some length of time before claiming reimbursement.

And just when you're settling into the swing of things, the term of the grant is over--a one year term is common. Terms of two to three years are not uncommon, but as a new organization, you'll have to be very persuasive as to your sustainabilty in order to receive this sort of long-term funding.

Sound frustrating? It's true, such short cash infusions, particularly if followed by another dry spell in funding, can disrupt all aspects of a nonprofit's functioning. Fortunately, in recent years, foundations themselves have started to recognize the issues involved in short-term grant cycles, and the trend seems to be heading toward longer grant terms.

For example, Darren Walker, president of the Ford Foundation, put out a request in 2015 that people tell him "the truth" about the foundation. Based on the flood of replies he received, the Ford Foundation decided it needed to address the issue of short-term thinking versus supporting nonprofits seeking long-term financial sustainability. Walker said, "For this reason, we are aiming to double our commitment to supporting key anchor organizations . . . In some cases this may mean larger, longer-term grants that can be used more flexibly."

Similarly, the Hewlett Foundation reported for 2014 that "Both the median and mean term of grants ticked up slightly as program budgets allowed for more multi-year grants," with its data showing grant terms of between one and three years, depending on the type of project.

As you research grant prospects, then, identifying not only the ones likely to grant your organization a substantial amount, but those willing to do so over a term longer than the typical one year would help justify the investment of time and effort that goes into grant-seeking.

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