Fundraising Essentials: Grant Exit Strategies

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Grant funding can kickstart entire organisations, uplift communities and create powerful social change. However, there comes a time when each grant eventually comes to an end. Grants are almost always fixed term arrangements meaning organisations need to suitably prepare to either replace funding or alter their service delivery. This planning for a life without grants is known as an exit strategy.

Funding organisations love to fund new projects over existing ones. They generally prefer to start their own work than to continue the work started by other organisations. Consequently, repeat grant funding, from both the primary and secondary funders, is rare. Instead, organisations need to think creatively and manage initiatives that address the downturn in funding as grants expire.

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The scale of the challenge that the ending of grant funding presents depends on what the grant was used for and the success of the project. If it was used for capital costs such as equipment or buildings then assuming the purchase went as planned then your organisation doesn’t have an urgent need to find replacement funding as the significant costs of the project have already been covered.

Where it is more difficult are in projects that include delivering services or paying staff. If this is the case then you need to secure replacement funding or your project will need to cease activity. Some larger organisations are able to cover the cost of maintaining projects for an interim period but most are unable to continue projects for any considerable amount of time.  Alternative funding solutions need to be found as a priority.

There are three main branches of resolving this issue and creating an effective exit strategy from time limited grant funding:

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  1. Find alternative means to deliver your project in a substantially less expensive manner
  2. Discover alternative methods of funding your existing project
  3. Determine to both spend less and generate new funding for your work

Before deciding on any set solution you should evaluate your project for strengths and weaknesses that may make it better suited to either reducing costs or acquiring new funding.

How can I cut the cost of my project? There are often few easy decisions but rather many difficult ones, especially if you have to consider the prospect of cutting jobs. The nature of your project influences where you can cut costs. If you have high expenditure on staff for example, it may be  possible to use more volunteers or computer systems to support your beneficiaries.

How can I generate more funds for my project? You can always consider more grant funding although if you are not changing the project at all it may be difficult. If you are determined to pursue grant funding one of the best things you can consider is adding additional elements to your existing project. If you can include more beneficiaries and create more positive social outcomes, especially with the experience of delivering your current project, you may be able to find a funder that fits perfectly.

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If you would rather move away from grant funding then there are a number of financial alternatives you can consider. These include charging subscriptions to beneficiaries; soliciting a major donor to fund the project; holding a fundraising event; working in partnership with local authorities; trading and loans.

Increasingly grant applications require organisations to include information on how their project will continue after the initial funding period ends. Grantmakers ask this question so persistently because so many worthwhile projects fail at this stage because organisations haven’t managed to secure alternative arrangements.

Have you managed to maintain a project after grant funding has ended? What advice can you offer to organisations seeking to develop effective exit strategies? Let us know in the comments.

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