General Operating Support vs. Project Grants: What to Ask For

What are General Operating Support and Project Grants?

When seeking funding for your nonprofit or mission-driven project, it's essential to understand the differences between general operating support (GOS) and project grants.

General operating support refers to funding that covers a nonprofit's core expenses, such as:

• Salaries and benefits for staff
• Office rent and utilities
• Insurance and administrative costs
• Overhead expenses

Project grants, on the other hand, are earmarked for specific programs, projects, or initiatives, such as:

• Community outreach and education programs
• Research and development projects
• Disaster relief efforts
• Capital campaigns

Here's a comparison of GOS and project grants in a table:

For example, a nonprofit that provides food and shelter to homeless individuals might ask for GOS to cover its core expenses, such as staff salaries and rent. In contrast, a project grant might be sought for a specific program, like a job training initiative for homeless individuals.

When deciding between GOS and project grants, consider the following questions:

• What are our core expenses, and how can we cover them?
• What specific programs or projects do we want to fund?
• What outcomes or deliverables are we expected to achieve with the funding?

Benefits and Drawbacks of General Operating Support

General operating support (GOS) provides unrestricted funding to a nonprofit organization, allowing it to use the funds for various purposes, such as staffing, programming, and administrative costs.

• Benefits:
  • Increased flexibility: GOS allows nonprofits to allocate funds as needed, without restrictions on specific projects or programs.
  • Reduced reporting requirements: With GOS, nonprofits often have fewer reporting requirements, as the funding is not tied to a specific project.
  • Long-term sustainability: GOS can help nonprofits build a stable financial foundation, enabling them to plan for the long-term.
• Drawbacks:
  • Potential for misuse: Without clear guidelines, nonprofits may use GOS funds for unintended purposes, such as administrative expenses or personal benefits.
  • Lack of accountability: GOS funding may not provide a clear understanding of how the funds are being used, making it challenging for funders to track progress and impact.
  • Risk of over-reliance: Nonprofits may become too dependent on GOS funding, making it difficult to adapt to changing circumstances or find alternative funding sources.

To mitigate the potential drawbacks of GOS, consider the following:

Benefits and Drawbacks of Project Grants

Project grants provide funding for specific, time-limited projects or programs. They can be beneficial for nonprofits with focused goals or those seeking to pilot new initiatives. Benefits of Project Grants:

• Clear outcomes: Project grants often come with specific deliverables and evaluation requirements, ensuring that the funded work is completed and its impact is measured.
• Focus on a specific need: Project grants allow organizations to target a specific issue or population, providing a concentrated effort to address a particular need.
• Opportunity to build relationships: Project grants can provide a chance to establish relationships with funders, potentially leading to future funding opportunities.
• Flexibility in programming: Project grants may offer flexibility in programming, allowing organizations to adapt their approach as needed.

Drawbacks of Project Grants:

• Limited scope: Project grants typically have a limited scope, which can restrict an organization's ability to address broader systemic issues or pursue long-term goals.
• Short-term funding: Project grants are often time-limited, requiring organizations to secure additional funding to sustain their work beyond the grant period.
• Evaluation and reporting requirements: Project grants often come with strict evaluation and reporting requirements, which can be time-consuming and resource-intensive.
• Risk of reduced funding: If a project grant is not successful, the organization may face reduced funding or even lose future funding opportunities.

To mitigate the drawbacks of project grants, consider the following:

When to Ask for General Operating Support

When to Ask for General Operating Support: A Checklist You should consider asking for general operating support when your nonprofit needs to cover core costs or respond to unexpected expenses. Here are some scenarios where general operating support can be beneficial:

• Stabilizing core costs, such as salaries, rent, and utilities
• Addressing unexpected expenses, such as equipment failures or staff turnover
• Scaling up operations to meet growing demand for services
• Addressing a decline in revenue or a loss of funding from other sources

To determine if general operating support is right for your nonprofit, ask yourself:

• Do we have a stable revenue stream, or are we facing financial uncertainty?
• Are we able to cover our core costs through other means, such as fundraising events or program revenue?
• Do we need to respond to unexpected expenses or changes in our operations?

If you answered "no" to the first question or "yes" to the second or third, general operating support might be a good fit for your nonprofit. Here's a simple table to help you decide:

By considering these scenarios and asking yourself the right questions, you can determine if general operating support is the right fit for your nonprofit.

When to Ask for Project Grants

When a nonprofit has a specific initiative or project with clear outcomes, it's often best to ask for project grants. This type of funding is ideal for initiatives that:

• Have a defined timeline and budget
• Require a specific amount of funding to achieve a clear goal
• Involve a unique or innovative approach
• Have measurable outcomes and impact

Project grants can be a good fit for initiatives such as:

• Building a new community center
• Developing a new program or service
• Launching a research project or study
• Hosting a specific event or conference

When preparing a project grant request, be sure to:

1. Clearly define the project's goals and objectives
2. Outline the project's timeline and milestones
3. Describe the project's budget and how funds will be used
4. Explain how the project will be evaluated and measured

Here's a checklist to help you prepare a project grant request:

Crafting a Compelling Funding Request

Developing a clear and compelling funding request is crucial to securing the support your nonprofit or mission-driven project needs. Here are some tips to help you craft a strong request:

Develop a Clear Theory of Change

• Clearly articulate the problem your project addresses and the desired outcomes
• Describe how your project will achieve these outcomes
• Outline the key milestones and evaluation metrics to measure success

Prepare a Strong Budget

• Ensure your budget is detailed and easy to understand
• Break down costs into clear categories (e.g., personnel, programming, overhead)
• Provide a clear explanation for any major expenses

Use Clear and Concise Language

• Avoid jargon and technical terms that may be unfamiliar to funders
• Use simple, straightforward language to describe your project and goals
• Focus on the benefits and impact of your project, rather than just listing features

Include a Compelling Narrative

• Share personal stories or anecdotes that illustrate the need for your project
• Highlight the unique aspects of your project and how it addresses the problem
• Emphasize the potential for long-term impact and sustainability

Make it Easy to Review and Understand

• Use clear headings and subheadings to organize your request
• Use bullet points and numbered lists to break up large blocks of text
• Provide clear contact information and a clear call to action

Here's a checklist to help you ensure your funding request is compelling:

• Clearly articulate the problem and desired outcomes
• Provide a detailed and easy-to-understand budget
• Use clear and concise language throughout
• Include a compelling narrative and personal stories
• Make it easy to review and understand

Here's an example of what a strong funding request might look like:

This example illustrates how a clear and compelling funding request can be structured, making it easy for funders to understand and support your project.

Putting it into Practice

To decide which type of funding to seek and craft a compelling funding request, consider the following steps:

Assess Your Needs

• Review your organization's budget and financial projections.
• Identify areas where you need general operating support or project-specific funding.
• Consider your organization's capacity to manage and execute projects.

Checklist for General Operating Support

Checklist for Project Grants

Crafting a Compelling Funding Request

• Clearly articulate your organization's mission and goals.
• Provide a detailed budget and financial plan.
• Include a plan for project evaluation and reporting (if applicable).
• Highlight your organization's strengths and capacity for managing and executing projects.
• Show a clear need and impact for the project or general operating support.

Review and Refine

1. Review your funding request with your organization's leadership and staff.
2. Refine your request based on feedback and suggestions.
3. Ensure that your request is clear, concise, and well-organized.
4. Proofread your request for accuracy and grammar.

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