Getting Grants and Financial Resources: Developing a Plan for Financial Sustainability
Learn how to plan for the financial stability of your organization, including tips from folks who have been doing this work for a long time.
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WHAT IS A PLAN FOR FINANCIAL SUSTAINABILITY?
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WHY SHOULD YOU COMPLETE A PLAN FOR FINANCIAL SUSTAINABILITY?
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WHEN SHOULD YOU DEVELOP A PLAN FOR FINANCIAL SUSTAINABILITY?
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HOW DO YOU PLAN FOR FINANCIAL SUSTAINABILITY?
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TIPS FROM THE FIELD
Sometimes, it seems like community work has a high price tag, and no one wants to foot the bill. There is so much change we want to see happen, but our finances are in such a sorry state that we're just trying to maintain what we've done so far. Staff is underpaid, overworked, and burning out; necessary programs are dropped or scaled back because there's no money, and closing the organization's doors is a constant fear in the back of everyone's mind. This goes on for years for many nonprofit groups; for others, the doors really do slam shut.
Sound familiar? Our question in this section is, how can this be avoided? Or, if this is the reality your group is faced with, how can it be changed?
Earning money - and as the staff of nonprofit organizations, we do earn every grant dollar or other bits of funding we obtain - isn't a mystical process. It's not something that can only be understood by a chosen few. It's a process almost anyone can do. And with enough time and effort, it's a process that can be richly rewarding.
However, it's something that can't be done well haphazardly. "If we need it, it will come," isn't a safe philosophy for members of community groups to live by. Many groups will say, "This is really important. Let's do it, and worry about the money later." Later, unfortunately, ends up meaning headaches and frustration, and being in the red.
In this section, we'll look at the basics of planning for the financial sustainability of your organization. We'll discuss what it means, why do it, and how to do it. Finally, we'll close the section with some tips from the field from folks who have been doing this work for a long time.
WHAT IS A PLAN FOR FINANCIAL SUSTAINABILITY?
So what do we mean by a plan for financial sustainability? Simply put, such a plan is a tool used to help the organization or initiative - and more importantly, its goals - thrive. And allow it to continue thriving over the long term.
Although it might seem otherwise, a plan for financial sustainability is not just about getting money. Now, part of your plan might well be to raise some dollars. In fact, it probably will be an important part. You may raise money through donations, grants, user fees, or all of the above, to name a few examples.
But that's not the whole story. A financial sustainability plan will also include other types of resources you might obtain, such as in-kind support, volunteer staff, or shared resources from other organizations. It may even include convincing another organization to take on a project you started.
A simple rule to go by: If it helps keep your organization or its work going, and if it's something you would have had to pay for if it hadn't been a donation, then developing it fully will be part of your financial sustainability plan.
Like any other type of plan, a plan for financial sustainability includes objectives, strategies, and action steps to get and keep these resources. All of this should be made very concrete as part of your plan.
For example, a partial list of what your plan will probably include:
- A list of all items and needs of the project
- The amount required to sustain each item
- Current resources
- Required resources
- Potential matching and funding organizations or individuals, and
- The amount that will be requested from each organization, individual or funding source
- How it will be requested (and by whom, and when)
Your plan will also look at all of these things on a long and short-term basis. That is, it will help you to consider your finances for six months from now, but it will also ask you to consider where you would like your organization to be in, say, six years.
Before we move on, a last important note here is what your financial sustainability plan is not. It's not the reason you are in business - it's not why you get up in the morning. If you had wanted your focus to be money, you would have gone into banking or something similar.
Planning for financial sustainability, then, is just one part of your overall plan for institutionalization. It lets you concentrate on your real purpose, whether that purpose is helping children live healthier lives or helping adults on their spiritual path. It allows you to "do more mission," in the words of author Peter Brinckerhoff.
So, while it's important to take care of the money, don't allow yourself to get so caught up in it that you forget what you are really trying to do.
WHY SHOULD YOU COMPLETE A PLAN FOR FINANCIAL SUSTAINABILITY?
One thing a plan for financial sustainability will take, if done right, is time. It's a long process. At least in the short term, it will take quite a bit of effort on the part of project staff. What are the advantages of taking that time and effort when you already feel overwhelmed?
BY DEVELOPING SUCH A PLAN, YOUR FINANCES SHOULD BECOME MORE SECURE, WHICH MEANS:
- An increased focus on your real work. You can do more of what you set out to do because your focus can be on the mission, not just on day-to-day survival.
- Becoming more competitive in your field. For example, more money allows you to hire more and better staff, which, again, allows you to do more to obtain your mission.
- Easier transitions. A plan can assist your organization in successful transition when current funding is depleted or dries up.
- Following guidelines. Sometimes, you don't have a choice. For example, some funders require the development of a plan for financial sustainability as a condition of their grants. By having a plan already developed, you start a step ahead.
WHEN SHOULD YOU DEVELOP A PLAN FOR FINANCIAL SUSTAINABILITY?
The short answer is: it's never too early to start planning. If you need money, and you plan to be around for the long haul, you should do this from the start. Planning should take place as soon as the project begins.
Even if your organization has been around for a while and is going strong, it still makes sense to periodically dust off your plan and make sure it is still viable. Such a "check-up" might occur on a yearly basis.
On the other hand, if your organization isn't where you want it to be financially and the organization doesn't appear to be headed in the right direction, it might be time for a complete overhaul.
HOW DO YOU PLAN FOR FINANCIAL SUSTAINABILITY?
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