Grant Writing Basics -TERMS
Please enjoy this excerpt from our CDP Training, Grant Writing Basics. Find out more about this two-session training by clicking on the image or the button below.
It is important to lay the ground work for understanding Grants. CDP’s Grant Writing Basics Training is just that — a basic training. We cover the fundamental basics so that the novice can begin to understand this world of Grant Writing. The Training is called Grant Writing Basics. As you get more and more comfortable with the information, we also offer Advanced Grant Writing, for those who want to take it to the next level.
In this short blog post, we’ll share some basic terms about Grants. It is really important to understand the context by which Grants can help you build and sustain a healthy Nonprofit.
Grants. We talk a lot about Grants in this Nonprofit world. We hear that term often but sometimes don’t really understand the difference between a Grant and the other ways that people donate to us or invest in us. Very basically, the definition of a Grant is: “A sum of money given to an exempt organization to further the organization’s exempt purpose without an expectation of those funds being returned.”
The idea is that Grants do not have to be repaid. When we think about a loan we generally understand that a loan is money that we have to repay, but Grant is money given to an organization that does not have to be repaid. Grants are really only given to tax exempt organizations, or 501(c)(3)s. These are organizations that have been designated as tax exempt by the Internal Revenue Service. That’s what we mean by an “exempt organization”. The money from a Grant has to be used to do the charitable work that your organization plans to do. That’s what a Grant is.
An Exempt Organization is a charitable, Nonprofit. These organizations are granted or assigned tax exempt status by the IRS. This means they don’t pay corporate taxes. So Nonprofits are corporations, but a tax exempt organization is a Nonprofit corporation that doesn’t have to pay corporate taxes. Again, the IRS is the entity who assigns that status.
Sometimes we hear the term 501(c)(3). That number designation refers to the portion of the US Internal Revenue Code that talks about charitable, exempt organizations. This is the term that you will become more and more familiar with as we learn about this world of Grants. You will see 501(c)(3), tax exempt, charitable, Nonprofit, not-for-profit — all used in this world of Grants and they are all synonyms. People will refer to Nonprofits using these different terms, but they’re all talking about the same thing — a Nonprofit organization.
Again a 501(c)(3) is a Nonprofit who is exempt from the federal income tax. The considerations for activities that are tax exempt include: “charitable, religious, educational, scientific, literary, testing for public safety, fostering national or international amateur sports competition, and preventing cruelty to children or animals.” These terms define what 501(c)(3) is. This list used to only include, “charitable, religious, educational, scientific,” however the IRS has added to the list.
So when our organization is given a 501(c)(3) designation, it will always point back to the internal revenue code. Though the designations within the code may shift or be added to over time, a 501(c)(3) is a Nonprofit that is considered exempt if your organization operates in accordance with the code.
Grantors, or Funders, are those organizations that donate money, in the form of Grants, to Nonprofits. I often use those terms interchangeably — Funders or Grantors. These terms are used for the organization of giving out the Grant dollars to Nonprofits.
A Proposal is the written request that we’re submitting to a funder or Grantor in order to get funding. ‘Proposal’ is kind of a generic term. There are lots of different kinds of proposals but the generic term ‘proposal’ is simply putting it in writing to a funder, asking them to support the work of your organization.
A Grant Application is a kind of proposal. It is generally the written request structured as a form by the funder. Community Foundations and some private Family Foundations have their own Grant Application process. In order to be eligible to receive grant monies, a Nonprofit has to apply. Foundations are gathering specific information and they generally want it to come back to them in a specific way. So a Grant Application is a type of proposal, but instead of writing it out and submitting it, the Funder will send a specific form that must be used in order for them to receive applications for their money.
RFP is an acronym we hear a lot when we talk about Grants. Request For Proposal is an announcement about a funding opportunity whereby Nonprofits can go to a Funder to try and get a Grant. I’ll give you an example of how an RFP works by talking about a local Funder — The Greater Cincinnati Foundation. The GCF doesn’t accept unsolicited Grant proposals. They have announced opportunities throughout the year in order to get proposals. For example, at this writing the GCF wanted to use some of their monies to fund some basic needs and they are looking for an eligible Nonprofit to whom they can Grant the monies set aside for this project. So they put out an announcement — an RFP — stating that there is an opportunity to request money for the particular purpose of funding some basic needs in the community. Funders will put out an RFP whereby organizations can compete for their monies.
Unsolicited Proposals are when written requests are submitted to a Funder without a Request for Proposals. Unsolicited is exactly what it suggests: “I didn’t ask you to send me a proposal but you’re sending me a proposal.” Often when we start doing research to find a Funder, we see that many don’t accept Unsolicited Proposals, however there are those who will consider them. The Funder may say, “If you’re interested in funding, submit a two or three page letter, telling us what it is that you do and how we might be able to support you.” An Unsolicited Proposal just means that we are submitting a proposal outside of a written open application period. We’re submitting a proposal without having the open RFP process.
Industry Acronyms. In the Nonprofit sector, specifically in the Grant world there are a lot of acronyms. You will want to be familiar with these as we walk through the process of research so that we don’t trip over them if we don’t understand what they’re saying. This is certainly not a comprehensive list or all-inclusive list but it does some of the acronyms that you are likely to find when you start doing research. Feel free to download the pdf at the bottom of this blog post so that you can refer back to it if you have questions or come across some of this language as you start doing your research.
NOFA — is a very common term used a lot in government. It means Notice of Funding Availability. A NOFA is very similar to the Request for Proposal, with the funder informing you that there is funding available.
An LOI is a Letter of Intent, Introduction or Inquiry. Basically, an LOI is presented as an opportunity to introduce the organization to a new Funder. The idea is to send a two to three-page letter stating, “This is who we are; this is what we do; we would love to be able to tell you more about our work and submit a formal request for funding.” An LOI is an introductory document that states the organization’s desire to submit a full proposal or that the organization is inquiring to see if the Funder is accepting proposals.
RFA is the Request for Application similar to the Request for Proposal. An RFA typically would suggest that the Funder has a specific application. Rather than submitting a document with the information, there is an application form. Both the RFA and the RFP would imply that the Funder is accepting proposals.
COB means Close of Business and is usually used in reference to the deadline for a Grant. Many Funders/Grantors have deadlines for submitting proposals. For example, a Funder/Grantor might say that the deadline to submit the proposal is COB, January 8, 2023. That would mean their close the business on that date. When we talk about deadlines, which are drop-dead, non-negotiables, we need watch for the acronym COB. It is on us to make sure that we don’t miss the deadline just because we don’t know when the Funder/Grantor closes that day. When we see COB, it is an indicator to make sure we understand exactly when our submission deadline is.
FY is the Fiscal Year. Many Nonprofits and many Funders/Grantors do not run on a calendar year, they run on a fiscal year. Often times you’ll see that term, which just indicates their budget year.
ED is short for the Executive Director.
AOR is an Authorized Organization Representative. You’ll see this term a lot when it comes to signing contracts that are applying for dollars. “You need an AOR to sign off on this document,” just means that you need permission to submit this request for funding. We see this term most commonly used in the public sector applications or with the more sophisticated funders. An AOR is someone who is authorized on behalf of the organization to submit a proposal or to commit the organization to do this work in accordance with an RFP.
PDF is short for Portable Document Format. Many people know about PDFs which come from the Adobe Acrobat software used to turn any document into a document which is easily viewed by any system. A PDF can’t be changed or revised easily. It’s a bit like taking a picture of your document and sending it. Many times, a Funder/Grantor will ask that documents be submitted in PDF format.
RFQ or Request for Qualifications can also mean Request for Quotation. Where we see this in the Grant world looks like this scenario: As a Grantor/Funder, I have $30,000 that I want to give to an organization in order to run an afterschool program. I’m not going to ask for a submitted proposal, requesting how much money it would take to run this program. As a Grantor/Funder, I’m telling the organization that I have the money, but I want to give it to the organization that can do the work sufficiently, that can serve the most people and the one that can do the work in alignment with my values and goals for the project. An RFQ is a request from a Funder/Grantor, stating specifically what they want the Grant monies used for — what they want to see accomplished. The Nonprofit responds by informing the Grantor/Funder why they can do the project better than anyone else. There’s a set budget and the Grantor/Funder is asking applicants to compete for the monies earmarked for those dollars.
SOW is a Statement of Work. It is a common term that you will see especially in more sophisticated Request for Proposals. The Statement of Work asks the question: What are you actually going to do with the money? The SOW is very common with public dollars and more sophisticated Funders. Where we typically see SOW being used is with a Funder/Grantor who might have some Levy dollars. They would issue or ask for a Statement of Work. It’s the Nonprofit informing the Grantor/Funder what they intend to do with the monies they’ve been given.
