Timeline of the Grant Writing Process

 

Timeline of the Grant Writing Process

The process of receiving a grant consists of a series of fairly consistent steps. The grant application process is standardized to a certain extent, which means that the overall timelines for applying and receiving a grants will typically be similar in nature. However, the process is by no means one-size-fits-all. Therefore, it is important to consider that when you apply for a grant, the process and requirements of that specific grant will vary slightly from those of other grants.

In all cases, the first step of the process will always be to research the different grants available to your organization. This research process will include finding and reviewing the application guidelines and annual reports for each potential funder. This step is crucial because at this point you will want to be sure that the funder is a good match for your organization and that your organization is a good match for the funder. You will also be able to begin to organize the materials and information needed to complete the grant application.

At this point, depending on the funder, it may be appropriate to place a phone call or send an email or letter to the organization so as to introduce your organization and the program for which you are seeking funding. This communication will also provide you with a chance to gather additional details about the funder and the funder’s application process. This step will vary by funder and is dependent on two factors: whether or not the funder has provided contact information, and what steps the funder has outlined as being the initial approach in the application guidelines. Some funders may require an introductory phone call, while others may explicitly state that they will only respond to requests sent in writing.

The next step in the grant application process is to fulfill the initial approach requirements laid out in the application guidelines provided by the funder. Typically this consists of your organization writing and sending a Letter of Inquiry (LOI) to the funder. The letter should strictly adhere to the structure laid out in the guidelines. The step of submitting an LOI is not necessarily always required by all funders, which means that in some cases this step can be skipped.

If the initial approach guidelines do not require the submission of an LOI, then you may go ahead and submit either a letter of request or the completed grant application. If an LOI is required, then you should wait to submit either piece until you have been notified by the funder of their interest in your program and their desire to receive either a letter of request or a completed proposal. This step is also funder dependent. Therefore, you should be sure to familiarize yourself with funder guidelines and requirements so as to ensure that your organization provides meets the funder’s expectations in an accurate, appropriate, and timely manner.

After you have submitted all documents required, you will wait to hear from the funder whether or not your organization will be receiving the requested funding. If your organization does not receive the funding, then at this point it would be appropriate and beneficial to contact the funder to discuss why your organization’s request was declined. This part of the process can prove extremely helpful as it is a chance to receive feedback on your organization’s submission. This feedback can benefit your organization as it completes applications for other funders, or if your organization decides to submit a second application to the funder during the proceeding funding season.

If your organization does receive the requested funds, then you should be sure to quickly send the organization a thank you email and a hard copy thank you letter via the mail. These pieces of communication should be well-written and carefully proofread. The final step of the process is to complete any followup or final reports required by the funder. These will also vary by funder and will also differ based on the type of program or project for which you have received funding.

The process of receiving grant funding can be lengthy but incredibly rewarding. As your organization seeks out funding, it is important to keep in mind the overall steps of the process in addition to the specific steps and requirements outlined by individual funders. This will help to ensure that your organization and its programs receive funding in a timely manner.

Nonprofits Guide to Applying and Negotiating an Indirect Cost Rate

Nonprofits Guide to Applying and Negotiating an Indirect Cost Rate

In the previous article, we learned “Why Your Organization Needs A Negotiated Indirect Cost Rate?” As mentioned, in this post, we are going to share how your nonprofit can apply and negotiate an indirect cost rate proposal so that you can have a higher return on your grant programs. This particular blog will focus on various types of indirect cost rates, who will receive your proposal, who is your cognizant agency, and different methods of cost allocation plans. Let’s begin.

Four Types of Indirect Cost Rates

  1. Provisional rate -  A temporary rate which is only applicable for a specified time period and is subject to adjustment pending the establishment of a final rate. .

  2. Predetermined rate - This is applicable to a specified current or future periods which is usually the organization’s fiscal year and is based on an estimate of costs to be incurred during the period.  Predetermined rates are not subject to adjustment.

  3. Fixed rate - This bears the same characteristics as a predetermined rate except it is subjected to an adjustment. The difference between the estimated base period indirect costs and actual indirect costs is carried forward as an adjustment to the rate computation of a subsequent period.

  4. Final rate - This is applicable to a specified past period which is based on the actual costs of the period. Final rates are not subject to adjustment.

The Cognizant Agency Receives Your Proposal, Who? 

The cognizant agency will receive your completed indirect cost rate proposal to further negotiate a rate for your nonprofit. Per 2 CFR 200, cognizant agency is defined as the Federal agency who is responsible for receiving, reviewing, negotiating, and approving indirect cost proposals.

Who Is Your Cognizant Agency

The Federal agency from whom your nonprofit receives the largest dollar value of Federal awards will be designated as your cognizant agency to negotiate and approve your indirect cost rate. Cognizant agencies for indirect costs may not necessarily be the same as the cognizant agency for the audit.  See 2 CFR 200.19 for further information on identification of cognizant agencies for indirect cost rate negotiations.

Methods for Calculating Indirect Cost Rates

The three methods for calculating indirect costs per 2 CFR 200 are as follows: 

  1. Simplified Allocation Method

  2. Multiple Allocation Base Method

  3. Direct Allocation Method

A proper analysis of your grant programs will help you decide what method is best for your nonprofit. For an organization whose major programs benefits from its indirect costs in similar proportions, the simplified allocation method may be best. In the simplified allocation method, there is one distribution base for calculating the indirect costs rate.  Both the indirect and direct costs must exclude capital expenditures and unallowable costs. Nonprofits who receive more than $10 million in direct Federal funding in a fiscal year,  must breakout components into two broad categories “Facilities” and “Administration”. 

 According to 2 CFR 200, “Facilities” is defined as depreciation on buildings, equipment, and capital improvement, interest on debt associated with certain building, operations and maintenance expenses. “Administration” is defined as general administration and general expenses such as the director’s office, accounting, personnel, and all other types of expenditures not listed under “Facilities”. 

The multiple allocation base method is generally used when an indirect cost benefit nonprofits major functions in various proportions. With this method, indirect costs must be gathered into separate costs groupings such as depreciation, interest, operation and maintenance expense, general administration and general expenses. 

The direct allocation method is used by nonprofits when they treat all costs as direct costs except general administration and general expenses. In most cases, the nonprofits split their costs into three basic categories described below: 

  1. General Administration & General Expenses

  2. Fundraising

  3. Other Direct Functions which includes projects funded with grants

Costs, such as rent, depreciation, maintenance, in this method are allocated as direct costs to each category and federal award utilizing a base that is most appropriate for the cost being pro-rated (e.g. square footage)

Negotiations and approval of rates

According to 2 CFR Appendix IV, a nonprofit organization which has not previously established an indirect cots rate with a Federal agency must submit its initial indirect cost rate proposal immediately after the organization is notified that a Federal award will be made. Per the guidelines, the proposal must be prepared and submitted no later than three months after the effective date of the Federal award. 

On the other hand, nonprofit organizations who have previously established indirect cost rates must submit a new indirect cost rate proposal to the cognizant agency within six months after the close of each fiscal year.

Negotiated Indirect Cost Rate Agreement

The indirect cost rate approval will be formalized by a rate agreement signed by the Director of the Cognizant agency and authorized representative of the organization. The agreement will include: 

  1. The approved rate and information that pertains to the rate such as type of rate, effective period, and base.

  2. The treatment of fringe benefits direct vs. indirect or an approved fringe rate. 

  3. The agreement will include general terms and conditions along with any special remarks. 

We hope your organization will benefit from this post and provide you some guidance on how to go about negotiating an indirect cost rate proposal. If you need further assistance or guidance, please reach out to us. Thank you

 

Different Types of Grant Funding

A wide variety of funding types exist for your organization to seek out. Knowing the different types of funds available is helpful because it may be better for your organization to use one over another. This is often dependent on the type of organization you are, what your organization’s goals are, and what type of project or program you are seeking to fund.

General funds are also sometimes referred to as unrestricted funds. These types of grants allow grantees to spend them in whatever way they see fit. Oftentimes general funds are used by organizations to cover administrative costs or miscellaneous expenses.

Restricted grants, also called special project grants, provide funds to specific projects or items. These funds are referred to as restricted because organizations who receive them are limited to spending them only on pre-agreed upon materials or projects.

Building or renovation funds cover different types of projects related to constructing or remodeling a property. When applying for funds to construct or renovate a building, it is helpful to utilize additional forms of support in conjunction with the funder’s support. For example, organizations could seek out donations of materials or supplies that will cut down on the overall expenses of the project.

Continuing support grants are renewable funds that provide ongoing support to an organization for a certain amount of time. The length of time covered varies between funders. Typically when an organization wins a fund of this nature, they receive a statement of intent to continue to support the project or program for additional periods of time, as long as the funder is financially able to do so.

Endowment funds are donations that are invested with the goal of providing interest income to an organization. This allows the funds to support the organization in an ongoing nature. Oftentimes, funders give these types of funds to organizations with whom they have previously worked and who have demonstrated that they are highly capable of managing the funds from a financial and administrative standpoint.

Emergency funds function as one-time awards that cover short-term financial needs of an immediate nature. Typically funders award these to organizations with whom they have already worked.

In-kind contributions consist of non-financial contributions of support to an organization. These types of contributions include things like equipment, physical materials, or volunteer services. Oftentimes, in-kind contributions are used to support a project which is applying for, or has already received, grant funding.

Challenge grants, or matching support, are grants that that match funds provided by other donors. Usually funders require that organizations obtain all matching funds before they will pay out the grant. Another form of matching fund are employee matching gifts. These consist of gifts by corporate foundations that match a gift provided by an employee of the corporation.

Seed money, also known as startup funds or seed grants, are used to launch new programs or projects. Usually the best avenue for finding funds of this nature is to approach foundations, corporations, or businesses that are local to your area and who will be affected by the project or program you are creating.  

Program development grants are awarded to organizations who are working to develop a specific program. These funds do not cover general operating costs of the organization, but rather provide financial support to the creation of a new project or program.  Schools, universities, and other education-based programs can seek out curriculum development grants, which are intended to fund the creation of different types of curricula.

Having an understanding of these funding types will empower your organization to seek out a variety of financial support streams. As an organization, it is important that you seek out the best types of funding to support the projects and programs that are already in progress, or that you are seeking to create. For example, if you are a school seeking to create your own innovative curriculum, then you should look into the different curriculum development grants that may be available to you. Knowing the types of funds available and understanding how these different types match up to your programs will help to expedite your organization’s grant application process.

Basic Components of the Grant Writing Process

The grant application process can look very different depending on the grant for which your organization is applying. Each grant has its own specific requirements and steps to follow. However, often there are several key pieces of information or types of documentation that a funder will request as part of the application process. Knowing this ahead of time and preparing this documentation can help your organization to prepare to meet deadlines quickly and efficiently. Some of these documents can be prepared in a one-size-fits-all format, while others may need to be created in a sort of boilerplate format that can be adjusted to meet the specific standards of each grant.

Some of the basic written materials you will need to gather about your organization include your mission statement, a paragraph describing your organization’s history, and a paragraph describing the community in which your organization is situated. Your organization will also want to compile several lists regarding the following information:

  • Board members (including information related to their places of employment, job titles, addresses, and affiliations with other organizations)

  • Staff members (with resumes or brief biographies)

  • Volunteers

  • Major accomplishments of your organization

  • Current programs and projects within your organization

Your organization should also be prepared to provide several different types of financial data. If you are a non-profit, then you will be required to present your 501(c)(3) letter. For-profit organizations may need to provide their certificates of incorporation. Other necessary information may be federal taxpayer information numbers (TINs), employer identification numbers (EINs), or Data Universal Numbering System (DUNS) numbers. The information needed will be dependent on your organization type and on the type of grant for which your organization is applying.

Other relevant financial information includes your program’s budgets for both the previous and current years. Your should also include an auditor’s report of your program. If your program produces an annual report, then that would be another important piece of data to include. You will also want to create a list of all of the current sources of funding your organization receives. The final piece of financial information you should include is a list of potential sources of funding for your organization, such as matching funds or pending applications for other grants.

Finally, compile information related to the community support your organization receives. You should create a list of community sponsors or affiliations that your organization holds. Include any letters of support or collaboration that your organization has received. You should also create a press kit that contains recent news articles about your organization and awards that your organization has received.

While not every funder will request all of these pieces of information on an application, it will be extremely helpful to have these types of documentation prepared in advance. This will help to create a smooth and efficient grant application process, as you will already have several of the key elements prepared. Knowing ahead of time what types of information your organization will need to provide and having that information organized and readily available to be inserted into grant applications will ensure that your organization creates high-quality proposals that earn funds.

Why Your Organization Needs A Negotiated Indirect Cost Rate 

Why Your Organization Needs A Negotiated Indirect Cost Rate 

Why Your Organization Needs A Negotiated Indirect Cost Rate

In today’s world of grants, recovery of indirect costs is extremely vital for nonprofits. With minimum resources and few capacity building resources, it is important to understand how to recover and budget indirect costs to further enhance your organization’s effectiveness.