Report finds grantseeking still a functioning source of revenue for nonprofits in 2010

In an October 2010 report released by GrantStation and Philantech, researchers find that grantseekers who actively pursue grants, even in the aftermath of the recession, have a high success rate. The conclusion is based on an online survey in which 839 nonprofits responded.
The online survey succeeds research done by Guidestar and The Chronicle of Giving, which found foundation giving likely to decrease or stagnate in 2010. This report confirms the foundation climate, finding that 42 percent of survey respondents received smaller grants in the first six months of 2010 than they did in the first six months of 2009.
In light of the decline in foundation funding, researchers attempt to assess actual nonprofit grantseeking success. From Aug. 7 to Sept. 7, 2010, researchers gathered data from nonprofit organizations focusing on education, arts, culture and humanities, human services, and social services.
The majority of survey respondents are small to midsize organizations and over half have budgets under $1 million. Though most nonprofits do not receive all of their funding from grants, the survey did not ask about non-grant funding sources.
Though a greater number of organizations consider private foundations one of their top funding sources, federal grants are actually the largest source of received grant funding. This may be due to the fact that federal grants are often larger, though they are fewer. The report finds nonprofit organizations are attempting to diversify grant sources, and notes that previous grantseeking research suggests nonprofits that have grown largest over the past three decades did not diversify, but concentrated grantseeking efforts on only one source.
The report finds an organization’s designation of grantseeking responsibilities is relative to the organization’s budget. In other words, 52 percent of organizations with budgets under $50,000 rely on volunteers to seek grants while organizations with larger budgets employ staff members to seek grants.
Similarly, the larger an organization, the greater the likelihood it submitted a grant request in the first six months of 2010. In all, 91 percent of survey respondents applied for at least one grant. Of the organizations that submitted requests, half submitted six or more requests.
Only 18 percent of organizations that submitted had no success securing grants. The majority of those having submitted received between one and five grants, while 16 percent received between six and 15 grants, and 8 percent received over 16 grants.
Research found high success even for organizations that submitted one or few requests. Of those who applied for only one grant, 55 percent were successful and 85 percent of organizations that applied for three to five grants received at least one.
The report concludes that nonprofits actively seeking grants are successful, in spite of a challenging economic climate. It also encourages grantseekers to analyze the return for their investments. In other words, organizations should assess the number of hours spent seeking a $1,000 grant. With the right amount of such a cost/benefit analysis, grantseeking is a viable source of revenue in 2010.