In my consulting career where I help non-profits achieve long-term sustainability, I encounter many organizations that are 80% to 95% dependent on government funding. The focus of these groups vary widely from health care to social services to arts and culture to environmental conservation. A common behavioural trait I have consistently detected among the leaders of these organizations is a preoccupation with grants. When the subject of expanding programs, replacing outdated equipment, building a structure or even simply paying the bills arises, the knee-jerk reaction is “Are there other grants to support this?”
Now it is foolish to suggest grants are unimportant, obsolete or irrelevant. Government and public foundation funding is the lifeblood of our charitable sector. To abandon grants would destroy the capacity of our charities and community organizations to solve societal problems and plunge the world into unfathomable levels of chaos.
However, like everything else in life, too much of a good thing can have disastrous results. An over-dependence on grant funding can be the downfall of a charity and jeopardize the well-being of the community it serves. Below are five (5) reasons why an addiction to grant funding can be detrimental to a non-profit’s existence:
1) Grant-makers don’t want to be viewed as a source of sustainability.
Aside from core funding from government sources, most grant-makers do not wish to be perceived as an ongoing source of sustainability for your charity’s operations or programs. Rather, most should be regarded as benefactors who strengthen an organization’s capacity by investing in specific facets of it program delivery. That is, funders wish to be seen as a periodic, not a perpetual solution.
2) Grant-makers don’t share your mission and vision.
Although a government agency’s mandate might sound similar to a charity’s mission, it does not mean that they are identical. Thus, we must not mistakenly presume that a funding source embraces our mission and cares deeply for our constituents. Perhaps some of our values and objectives align with those of certain grant-makers. Yet this does not mean we are equally committed to achieving the same impact for the people.
3) Grant addiction can lead to “mission drift”.
Organizations that become hyper-focused on grants for their survival are commonly prone to adjusting the nature of their programs simply to qualify for funding. Some even invent new programs that are totally unrelated to their mission and vision for the sole purpose of meeting a grant-maker’s criteria. Venturing away from its mission is not only a massive disservice to the community it serves, but it can also lead to allegations of fraudulent practices and other legal troubles for the charity and its leaders.
4) Grants are not a substitute for fundraising practices.
Sometimes non-profit leaders find it easier to pursue large granting opportunities than tediously cultivate a base of passionate and devoted donors. I have met many Executive Directors and board members who preferred grants merely because they did not like asking people for money. To an extent this approach is understandable since fundraising and building long-term relations with donors is hard work. It is also a gambler’s mentality – “if we get this grant, we will be on Easy Street”. Organizations that cling to this fallacy constantly operate in a reactive state as they hope for their next “big break”. Building a long-term fund development strategy requires volumes of sweat equity but it enables an organization to progress towards its mission far more expediently than any succession of grants ever could.
5) Relying on grants is placing your charity’s destiny in the hands of outsiders.
When an organization receives nearly 100% of its funding from different grants, it is essentially placing its future direction in the hands of external decision-makers. Whether or not people in crisis actually receive urgently needed help and support literally is subject to the whims of individuals who are completely detached from the charity responsible for delivering the solution. Though this sounds hyperbolic, the less reliant a charity is on granting decisions made by outsiders, the greater the control it possesses over its program delivery.
There is old adage that goes “A warrior can choose a life of peace. Others are condemned to it”. Likewise, a charity with a passionate and sustainable donor base can choose to apply for a grant or not. Others are sadly have no choice.
Grants will always be a vital resource for every charity in their quest to create positive change in their community. As a fund development consultant, it is my job to ensure that the client organizations with whom I am assisting are aware of any grant-making opportunity that might substantially advance their mission. It is also my obligation to ensure these organizations balance the pursuit of grant funding with the development of dedicated foundation of long-term donors.
