
There are several reasons why you should seek diversified funding streams, including decreased financial risk and greater community exposure.
Both private grants and public (or government) grants can be incredibly important in helping you fund your mission.
Following are a few of the pros and cons of pursuing either of these funding sources.
Private Funding: Pros and Cons
A few reasons why private funding can help you reach your strategic goals include:
Greater Flexibility: Because private grants tend to be based on trust, there is more funding available for innovative programs.
Minimum to Moderate Reporting Requirements: Private funders typically don’t require the level of reporting normally required for government grants.
General Support: Long-term partners are more open to offering unrestricted support.
Some cons to private funding include:
Less Funding Available: Because private grants offer less funding than government support, you’ll have to submit and secure more grants to reach your goals.
Less Objective: Private funding is based on trust; it’s not uncommon for programs to be chosen because the funder has a previous relationship with a grantee versus which program is more “technically” correct.
Public Funding: Pros and Cons
A few reasons why you might consider public funding include:
More Funding Available: The largest pool of funding is available from public sources, meaning you can spend less time to secure more funding.
Credibility-Boosting: Securing a federal or state grant can bring a lot of prestige to your organization.
Some reasons why you might forgo public funding:
Stringent Reporting Standards: Government funding requires strict and intensive follow-up reporting.
High Number of Applications: These types of grants are very competitive.
Resource Draining: Government grants are time and labor-consuming to pursue.
Public funding may actually cost your organization money if you are not careful, with organizations, on average, spending at least 10% of the grant on grant administration.
Conclusion
In general, you want to pursue a mix of private and public grants. The ratio of these will depend on your strategic priorities for that year.
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