6 Proven Ways to Capture Grants That Increase Capacity

During periods of economic uncertainty, it can be tempting to put plans for expansion on hold, especially when some organizations are facing existential threats. Yet foundations often seek grantees that have a bold vision for growth.

Many grant makers learned key lessons during the Covid era about how best to support their grantees, and some are applying those takeaways to the current environment. Although it may seem counterintuitive, now may be a great time to seek funding to hire more staff, upgrade technology, sharpen staff skills, or test a new initiative.

“There are fewer groups that are looking for capacity building at this moment in time because they may just be focused on survival,” says Marla Bilonick, president and CEO of the National Association for Latino Community Asset Builders (NALCAB). “Capacity building is a long-game approach. You have to be pretty sure-footed to engage in something that’s about building for the future.”

The Chronicle spoke to Bilonick and two other grant-making leaders who explained what successful applicants should do to win capacity-building grants, and how to demonstrate that you are ready, willing, and able to strengthen your operations.

Attend grant makers’ events to raise your profile

NALCAB operates as a pass-through grant maker to connect nonprofit members with opportunities funded by banks, including Citibank, JPMorganChase, TD Bank, and Wells Fargo as well as some foundations, like Kaiser Permanente. Members of the association work in a variety of economic-development areas, from first-time homeownership to affordable housing to small-business lending.

Bilonick says the best relationships begin long before the request for proposals: The strongest capacity-building grant applications come from the people who regularly appear on the association’s radar.

“That could be anything from attending webinars, conferences, events, or even just reaching out in a benign way, before there’s a live [grant] opportunity,” she says.

The association keeps track of attendance, and recognizing you are committed to learning before you send in your proposal will give you a leg up, she says. Even if you can’t attend every event, Bilonick says you can still show how engaged you are with everything on the table: “If you followed up and said, ‘We weren’t able to make the webinar, but we want to learn more about the opportunity,’ you’re showing more interest than just in the proposal itself.”

Share your nonprofit’s needs with program officers you know well

The Overdeck Family Foundation awarded $63.5 million for education last year, with $1.35 million of that going toward capacity building — typically in the range of $5,000 to $100,000 per grant.

During the first year of a grant, program officers develop a sense of how a grantee fits into the foundation’s strategies and philosophies, says Lucy Brainard, director of portfolio success and operations. Keep in frequent contact during that pilot year, she says, because once you move into the second year and beyond, that’s the ideal time to ask for capacity-building support.

Overdeck encourages grant seekers to think ahead from the very start: Its application form asks whether an organization is interested in capacity-building opportunities. Brainard says communicating goals centered on innovation, evidence, and growth lets program officers see how they can help you succeed.

“We want it to be authentic, organic conversations that are coming up between our portfolio managers and the grantees about what are those areas of need that they may have right now, and how we may be best positioned to meet that need,” she says.

For example, midway through a multiyear grant, leaders of the language-development nonprofit LENA asked for assistance in recruiting data analysts. Overdeck subsidized a fellow from Harvard University’s Center for Education Policy Research to bolster their staff. The foundation also has helped grantees with technology upgrades and participation in revenue-boosting workshops.

Emphasize the performance of your key leaders

While having a visionary CEO is a powerful way to convey your organization’s future, foundations want to see a deep bench of talent at a charity.

“It’s not just about the management of the organization, but it’s about everything from the capacity of the board that’s overseeing the organization to the extent that there is a team on the ground that can execute with fidelity,” says Mike Wang, partner at the philanthropy-advisory firm Building Impact Partners, which matches philanthropists and foundations with charitable groups looking to grow.

Wang says one of his donors wanted to see evidence of a strong leadership pipeline among prospective grantees, so his firm developed metrics to evaluate development directors and program directors. He says funders tend to want to know that a charity has the staff in place to continue on an upward trajectory over a multiyear period.

He also says donors want to hear clear messaging from your leadership about why your work is relevant at this moment, how you’re working with community partners outside of your organization, why your strategy is sound, and how you’re approaching the costs of implementation so that all the changes you’re making will stick. You should prepare answers to all of these points in your conversations with grant makers, so you can articulate clearly how you’re thinking about the future, Wang says.

When preparing those talking points, think big and try to gauge your organization’s strength compared to that of your peers. “It’s not just this idea of the endgame — did the organization increase its capacity?” he says. “If you want it to be sustainable, you want to look at what are those kinds of leading indicators? What are those benchmarks that help you understand if you’re headed in the right direction?”

Take time to fine-tune every grant proposal

NALCAB’s grants average around $50,000, and focus on building technical capacity in specific program areas — like adopting technology to deliver financial-capability services or becoming certified as a community development financial institution.

Because the RFPs are so narrowly defined, Bilonick says it’s frustrating to receive grant proposals that look like they were copied and pasted from elsewhere. “People are feeling like, ‘We’re gonna throw spaghetti at the wall and see what sticks.’ It’s better to take the time on an opportunity that you feel is really aligned to your work,” says Bilonick.

She recognizes that it requires extra effort to tailor every grant proposal to the RFP. However, you can use artificial intelligence to streamline your grant writing: “You could formulate your thought and then feed it into AI to meet the word count or to say something more concisely or more efficiently. In that case, I would welcome someone using AI.”

That said, she wouldn’t want ChatGPT to write the entire application: “I just can’t imagine that it would capture the nuances that it would need to capture.”

Embrace collaboration with your peers

Experts agree that peer-to-peer mentoring is a crucial part of capacity building.

NALCAB regularly convenes its grantees for peer support and problem-solving for common challenges, Bilonick says. “To our mind, that’s as valuable, if not more valuable, than the financial support that comes through the grant itself.”

To impress your grant makers, Wang recommends proactively approaching them to say something like: “I wonder if you would ever consider playing an even bigger role in this community, in this sector, around bringing your grantees — and even nonprofits who are not your grantees — together to create an environment where there’s more sustained and impactful collaboration.”

A former fundraiser himself, Wang acknowledges it might feel hard to make such a bold request in addition to asking for money, but he says most funders would pounce on that idea: “My goodness, donors would love to get asked that question. Most donors I know would feel so valued if they were asked or pushed like that, you know?”

Brainard says grant makers themselves should also embrace peer learning. She created a peer group of foundations for capacity building in education that meets regularly on Zoom. Members include staff from Blue Meridian Partners, Cambiar Education, the Chan Zuckerberg Initiative, Robin Hood, and the Walton Family Foundation, among others.

They will often discuss shared grantees and how the foundations can collaborate to serve them better. “Lately we’ve been talking about: How are we meeting the needs of our grantees in this challenging educational and political climate?” Brainard says. “And bouncing ideas off of each other: What’s worked for you? What hasn’t? What’s the feedback you’ve gotten from grantees?”

This peer group is a replicable model for grant makers in other mission areas, she adds, and nonprofit leaders may want to suggest that program officers they work with create a peer group of their own grantees.

Seek broader definitions of “success” in the current climate

Lastly, you and your funder need to agree on what capacity-building success looks like. In the current environment, the best outcome could mean layoffs or merging with another charity.

In addition to workshops and coaching on scenario planning, legal guidance, and strategic partnerships, Overdeck offers its grantees resources to navigate the suspension of grants from the U.S. Department of Education. If federal funding is the lifeblood of your organization, exploring a merger or acquisition is not a failure when it enables your work to continue, says Brainard.

“Many [grantees] are just thinking about ways that they can cut costs, how they can go from this focus of the last few years on scaling with all this influx of funding, to just sustaining or contracting as little as they can,” she says. “We wouldn’t be surprised if we see more consolidation of the market and mergers in the future.” Wang concurs: “We have many, many instances of duplicative organizations out there.”

He says the most effective grant seekers are willing to be vulnerable about their weaknesses and challenges, because transparency builds trust with donors. Be open to joining forces with another charity facing similar headwinds, he says: In some cases, a merger could be the smartest choice your group can make, and your grant maker could help facilitate that process.

Getting through this era is “going to require organizations to be really effective, to try new things, and — in some cases — to fail and fail quickly, and move on and learn,” Wang says.