A Beginners Guide for Obtaining Grants
A grant is one of the ways the private sector, charitable sector and governments fund projects that provide public services and stimulate the economy. The intent of most grants is to fund projects that will benefit specific parts of the population or the community as a whole. Grants support critical recovery initiatives, innovative research, and many other programs. They provide a unique opportunity for collaboration and support businesses and non-profits that are attempting to positively impact society. Grant funding can make or break a charitable project for many non-profit organizations, and obtaining the funds and reporting back on the use of those funds can be challenging.
ELIGIBILITY FOR GRANTS
Finding a grant that meets your project’s needs is not always easy. While there may be many organizations that provide grants, non-profit organizations are not the only entities applying for that grant money. Individuals, for-profit corporations, government agencies, educational institutions, and non-profits are a few of the organizations that are regularly seeking grant funds. The grantors are looking for the best projects to fund, as well as ensuring the organizations they grant money to are reputable and otherwise have the means of completing their project.
Each grantor will have specific criteria for the programs they are willing to support with a grant. Some grants can be restricted for a specific purpose and/or require specific reporting on the activities of the program and how the grant monies were used. Identifying grant opportunities can be difficult. Websites like www.grants.gov and www.tgci.com have listings of current grant opportunities that are available. These sites are a great initial starting place for many organizations that are seeking grant funding. Researching private foundations to partner with can also be a great way to obtain funding. Websites like www.guidestar.org and www.foundationcenter.org allow organizations to research private foundations and see if they are open to providing grants.
HOW TO PREPARE TO APPLY FOR GRANTS
Applying for grants doesn’t have to be difficult. Non-profit organizations should have a business plan prepared in advance before applying. Many grantors want to know the following:
- Description of your non-profit organization
- Program objectives, key performance indicators and social impact analysis
- Financial status of the organization
- Financial budget and business plan for the use of the grant funds
- Performance milestones and timelines for services rendered
All non-profit organizations should have this information prepared in advance of applying for grants. Often, obtaining the grant is the easy part and reporting on the use of the grant and accounting for it can be difficult.
ACCOUNTING FOR GRANTS
Unlike International Financial Reporting Standards (IFRS), US Generally Accepted Accounting Principles (GAAP) has specialized industry accounting requirements for not-for-profit entities (NFPs) that receive government grants. For other [business] entities, US GAAP does not contain specific guidance on the accounting of government grants. Consistent with historical practice, business entities might look to IAS 20 as a source of non-authoritative guidance.
Grants that do not come from government agencies should still be treated with extra attention for accounting purposes. Tracking or class reporting for each grant helps to ensure that all grant funds can be reported back to the grantor. In addition, a non-profit organization needs to ensure that all the conditions of the grant are met and provide tracking for those conditions. Since many grants do have conditions, a non-profit organization will also want to ensure they are classifying their net assets appropriately to indicate if there are donor restrictions and what net assets amount to without donor restrictions.
