Grantmaking Application Process Resource Guide: A Grantmaking Primer

The grantmaking application process is a big lift for foundations and nonprofits, alike. This primer takes a look at streamlining the application process from RFP to grant agreement. Found in the guide is a how-to on creating RFPs, questions to ask during the grant application review, sample acceptance letter, sample declination letter, and a sample grant agreement. Highlighted here, you will also find an innovative example a group of funders from New Mexico (SHARE New Mexico) took in reevaluating their long standing grantmaking application process and the steps they took in creating and implementing a common application. Finally, we invite you to explore the resources and tools available through PEAK Grantmaking's Project Streamline initiative, an effort to assist funders in right-sizing application and reporting requirements, reducing the burden on grantseekers, and seeking feedback to improve grantmaking practices. 

• Creating a Request for Proposal
• Grant Application Review
• Innovative Example: New Mexico Online Common Application
• Sample Proposal Application Checklist
• Sample Grant Acceptance Letter
• Sample Grant Declination Letter
• Sample Grant Agreement
• Project Streamline

Creating a Request for Proposals

Grantmaking wouldn’t be possible without input from nonprofit organizations in the form of grant applications – but in order to understand what projects are out there, you might need to issue an RFP (request for proposals).  An RFP is an invitation to submit a proposal, and may be issued broadly and pushed out through widespread communications, or might be targeted towards nonprofits working on a particular issue area.  Especially as you are getting started, you may consider using an RFP to let nonprofits know that your foundation is now open for grantmaking business.

What are the typical items addressed in an RFP?

• What is the foundation’s mission?
• What is the purpose of the grant program?
• Is there background or contextual information about your foundation’s interest in funding this area that would be helpful for potential applicants?
• Who and what types of organizations may apply? Do groups need to be 501(c)(3) organizations?
• What is the target population for the grant program?
• What is the target geography for the grant program?
• What is the typical range of grants?
• Are there limitations on the grant amounts, terms, or types of funding provided?
• What is the deadline to submit applications?
• What is the specific process to submit an application? What additional documents are needed?
• What will the decision making process encompass?
• Who at the foundation will be able to answer questions about the application process?
• Is there a website link that you could provide potential applicants with answers to commonly asked questions about the grantmaking process?

Grant Application Review

Reviewing grant applications for the first time can be a difficult and even worrisome process for many board members and foundation staff. How do you ensure that you are funding the right projects? How do you weigh the merits of one project against another? How do you help ensure that projects will be successful? While there are no absolute ways to guarantee a project’s success, the grant proposal should clearly convey to you that the project’s goals are worthwhile, its project plan defined and realistic, and its goals achievable in the defined time frame. The questions below will help you think logically about the project and its goals. 

What is the project the applicant is proposing?

• What are the project’s goals, and are the proposed activities likely to meet these goals?
• Does the proposal clearly describe the project's ongoing activities?
• Does it offer insights into how the project will be structured, staffed, and managed?
• Does the scope of the project seem realistic and the timeline achievable?  

Why is the project being proposed?

• What community needs will it address? Who will it serve?
• What evidence establishes these needs?
• What benefits will the target population derive from the project? 
• Are there any unplanned impacts to the community that might occur as a result?

Where and when will the project take place?

• Why was this area selected? When will the project take place?
• Will the project have influence or repercussions elsewhere in the community? If it is successful, could it be duplicated elsewhere, or scaled to serve more people?
• What is the timeline for accomplishing the work? What are the crucial deadlines that must be met? What will happen if those deadlines are not met?

Who will participate in the project?

• Who will the program serve, and is it the right target group given the project's goals?
• Who will provide the services, and what are their capabilities?
• Does the organization have a strong track record of serving this population or working in this community?
• Who on staff will oversee the project, and what are their qualifications?
• Are there other organizations working on similar projects, and if so, would the groups consider collaborating?

How will the applicant maximize the project’s success?

• Is the project's approach practical and based on best practice?
• Have other organizations achieved success with similar projects?
• Are there any crucial difficulties the proposal has not anticipated?
• At what periods will evaluation be performed, and by whom? How is success defined?

How much will the project cost?

• Is the budget adequate to carry out the program?
• Is the organization using any of its unrestricted resources to support the project?
• Have other funders committed their support?
• Does the organization seem financially stable, based on its 990?
• How will the project continue after your funding has ended?

Innovative Example: New Mexico Online Common Application

Funders are aware of the time and energy nonprofits expend on grant applications—and as funders, we should be looking at creative, innovative, and collaborative ways to ease the application process for nonprofits. Recently in New Mexico, eight of the state’s largest funders, including Council member, the Albuquerque Community Foundation, banded together to create an easy-to-use, online common application that is aimed to improve the grant application system for New Mexico nonprofits. The new process is unique to New Mexico and its ability to prefill grant application forms is innovative to the nonprofit industry.

How did it start?

In early 2015, a group of funders convened at the Albuquerque Community Foundation to discuss ways that funders could best answer the needs of community organizations. A resounding theme that resulted from that first meeting was the need for a common application that organizations could use when applying for funding. While recognizing that funders will require information specific to their grantmaking, all funders also understood that basic information, such as organizations’ mission statements, background information, contact information, board listings, and financial statements would be uniform for any grant request.

In an effort to be most efficient in funding approaches, the group determined to work together on developing an online common grant application that could be universally accessed by both nonprofits and the funders. The first step was finding a site that could develop and maintain such an application.  

The Platform: SHARE New Mexico

SHARE New Mexico is an accessible statewide website, which consolidates public and private sector information about a wide range of issues which impact the quality of life of New Mexicans. Initially envisioned by leaders from PNM and the PNM Resources Foundation, United Way of Central New Mexico, and the Bureau of Business and Economic Research at UNM, SHARE New Mexico was created to provide a platform for sharing information and data in New Mexico.

Today, major philanthropic and private institutions have committed funding for SHARE New Mexico; the funding is used to enhance and sustain the website to ensure it is a valuable and reliable resource. Put simply, SHARE New Mexico is a holistically collaborative online hub where organizations, funders, and the general public can freely access information about their communities throughout the entire state.

To this end, SHARE New Mexico hosts Initiatives Pages focusing attention to Early Childhood, Hunger/Food, Housing/Homelessness, Community Health, Aging, and Returning Citizens. In addition, SHARE hosts a community information page for each of the 33 counties in New Mexico and the South Valley of Albuquerque. Since one of SHARE’s goals is to facilitate and support local collaborations, each SHARE County and Initiative pages provide special recognition and resources to support collaborations. 

Additional portals include access to available grant opportunities, a public events calendar, volunteer opportunities, socioeconomic data, and a resource directory for the state. Feedback from the community has been strong, with thousands of nonprofits and service providers already registered on the site and thousands of their programs represented. Many funders are also now requiring that nonprofits are registered on SHARE New Mexico in order to receive grants. 

Given the technological capacity and the frequency with which nonprofits and funders use SHARE New Mexico, SHARE quickly emerged as the leading candidate to host a statewide common grant application.

The How

To create a common application that was universal while also allowing room for customization, funders met for months prior to the application’s launch and reviewed examples of local grant applications and national grant applications. Through the process, the funders determined questions that were most frequently asked and attachments that were commonly required for any grant proposal. These questions and attachments would serve as the fundamental basis for the common grant application.

Because the funders’ priority was to simplify the grant application to reduce the amount of time involved for nonprofit applicants, the general information required by all funders only needs to be filled in or updated annually at the sharenewmexico.org site. This information auto-populates in any grant opportunity available through the common application, reducing at least one application step for nonprofits. Additionally, administrative attachments – 990 forms, audits, financial statements, board lists, and IRS determination letters – only need to be uploaded once a year and will be available in the SHARE database for any grant opportunity that leverages the common application.

Each funder then has the opportunity to log into the user end of the SHARE grant portal and customize their grant opportunity by adding specific questions or attachments, relevant to that grant request. Additionally, a calendar for all grant cycles is featured with the common application, allowing nonprofits more access to and education of available grant opportunities throughout the state.  

The Partners

Efforts like this can never be developed or completed in a vacuum. The list below illustrates the funders who collaborated for months on launching this idea: 

• Albuquerque Community Foundation
• Intel Corporation
• McCune Charitable Foundation
• Nusenda Foundation
• PNM
• PNM Resources Foundation
• Sandia Foundation
• United Way of Central New Mexico

The Outcome

This online common application represents a new consolidated effort to ease the paperwork burden for nonprofits and increase the number of nonprofits applying for the grants available for tackling a wide variety of social, financial and economic issues throughout New Mexico. The online common application process brings innovation to what has been a labor intensive process for nonprofits seeking grants. These efforts are also expected to improve funders’ grantmaking and provide better transparency of their efforts. 

Next Steps

By developing the common application, the New Mexico funders took the first step in what they anticipate will be a much larger process in leveraging technology to make it easier for nonprofits and funders to do the important work we do in the community. This includes, sharing resources, data, content and eventually, offering an online grant reporting portal, which the group aims to have developed in 2017.  

Sample Proposal Application Checklist

When accepting applications from nonprofits, there are a number of documents and supplemental material they will most likely need to submit. Below you will find a checklist of each of those required documents that are typically requested in an application.

• Proposal cover sheet
• Proposal
• IRS determination letter of 501(c)(3) status
• List of board members and their relevant experience
• Profiles or resumes of key staff members
• Description of staff and board composition
• Most recent annual report, if not already provided
• Most recent publications, news articles, or other relevant materials about your organization or the funded project
• Support letters from outside people or organizations that will participate in the project

Sample Grant Acceptance Letter

Once you have reviewed all of the grant applications that have been submitted and have made your final decisions, you will need to communicate your decisions in writing to the applicants. This sample grant agreement letter can be customized to your foundation.

Download the Sample Grant Acceptance Letter

Sample Grant Declination Letter

Once you have reviewed all of the grant applications that have been submitted and have made your final decisions, you will need to communicate your decisions in writing to the applicants. This sample grant declination letter can be customized to your foundation.

Download the Sample Grant Declination Letter

Sample Grant Agreement

Once you have accepted an application for a grant, you will need to formalize a grant agreement between the foundation and the nonprofit. This sample agreement can be customized to your foundation.

Download the Sample Grant Agreement

Project Streamline

PEAK Grantmaking and a cohort of partners set out to answer two questions: Are nonprofits drowning in paperwork and distracted from purpose as a result of grantmakers' application and reporting requirements? Do the same practices that grantmakers use to increase effectiveness end up over-burdening both grantmakers and grantseekers—and diminishing their effectiveness?  The initial report on these questions, Drowning in Paperwork, Distracted from Purpose, examined grantmakers' application and reporting practices and their impact on grantmakers and grantseekers. This report formed the basis for Project Streamline and continues to be used by grantmakers to better understand the flaws in the current system, barriers to change, and principles that grantmakers can adopt to improve their practices. 

Project Streamline's Four Core Principles are:

1. Take a fresh look at information requirements: request only what is used in decision-making.
2. Right-size requirements: align application and reporting to the size and type of grant.
3. Reduce the burden on grantseekers: reduce unnecessary and onerous practices.
4. Have straightforward and clear communication with grantseekers.

PEAK offers 5 Principles for Peak Grantmaking to help grantmakers interested in moving toward more sensible and streamlined application and reporting practices.