Too Much Money

Some nonprofits rely on donations and the occasional fund-raising event to cover their expenses. They maintain the same level of funding each year that is enough to meet their needs. Then, either the need changes or a board or a staff member decides they want additional funding.

I am cautious about submitting a grant for a nonprofit who never submitted one before (or it has been a long time) and their funding has been steady for years. Additional money is not always a good thing. Once they receive the money, the nonprofit must spend it and the process to do so (tracking, reporting, etc.) can be overwhelming.

Increasing a nonprofit’s funding above their normal operating budget should be carefully planned. When submitting a grant request, I usually do not let the funding increase the nonprofit’s budget by more than a third. Past this amount, the expenditure of funding becomes increasingly difficult to manage for a nonprofit. Sometimes more people need to be hired. (A substantial increase is also more difficult to justify in a grant request.)

Besides managing the money, excess funding can lead to personnel conflict among board members, staff, and volunteers. However, a nonprofit can benefit from submitting a grant. The submission process forces them to get organized.

Any major funding changes to an organization, nonprofit or a business, can lead to disaster if not planned carefully. A grant writer should consider the impact additional funding will have on the nonprofit and advise the nonprofit if you have concerns. Sometimes it is better to not increase funding and look at other resources, such as in-kind donations, to satisfy additional needs.

Leave a Comment

Your email address will not be published. Required fields are marked *