How to get grants from elected officials

At a Dec. 10, 2009, talk sponsored by the Staten Island NFP Association, NY State Assemblywoman Janele Hyer-Spencer pulled back the curtain on the process by which elected officials make grants to non-profits.

She introduced the talk by saying that, before she joined the Assembly, she had experience applying for government grants as  legal director for My Sister’s Place, a non-profit in New York that helps victims of domestic violence. When she was elected to the State Assembly, however, she said she found she was spending an enormous amount of her time answering questions from non-profits about state funding.

In response, she decided to hold meetings for non-profits about getting federal, state, and city money. Ours was her second meeting, after the Brooklyn meeting (her district covers parts of Brooklyn and Staten Island).

Her talk was about New York state, but I imagine the systems in other states are similar.

Three levels of government: don’t mix them up

Janele started by describing the three levels of government: Federal, state, and city. There is discretionary money available at each level.

However, each level needs a different type of proposal. “You need to understand jurisdictions,” she said. “Don’t ask your senator for a new firehouse, for example.” That’s more of a city issue.

What money’s available?

There are two state funding streams: “member item” and “capital money.”

Member item funds

Every elected official (or “elected,” as she said) has some discretionary member-item funds. There are different levels of funds available to the different levels of government, and each elected gets a different amount depending on his or her tenure in office and whether he or she is a member of the majority party.

So, for example, as a freshman, Congressman Michael McMahon gets relatively little federal money to spread around. The four state assembly members from Staten Island—Michael Cusick (D), Matthew Titone (D), Lou Tobacco (R), and Janele—are all relatively new as well.

Michael Cusick Matthew Titone Lou Tobacco
Michael Cusick, Matthew Titone, and Lou Tobacco

People with seniority get more money, she said. “Senator Marchi, who’d been in the State Senate for 50 years, had $3.8 million to pass around. He’d accept $100,000 proposals.” She looks for $5,000 proposals—that’s her cap as 30-month assemblywoman. “Five to ten thousand is reasonable for our current assembly people,” she said.

Member-item funds can be used at the elected’s discretion, with some caveats:

  • No religious organizations.
  • No private or for-profit organizations.
  • Requests must be program-related—she won’t accept a proposal that includes salaries or  administrative costs. However, items that support a program, such as chairs, advertising, and supplies, are allowed.
  • The money must go either to a 501(c) 3 or 4 or to a conduit—i.e., a 501(c) that is willing to pass the funds through to the organization without non-profit tax status.

If you can meet the above requirements, she said, you can send her a one- or two-page proposal that says what you want, your mission statement, a short budget, and a brochure showing what you already offer. (For example, if you offer homeless services, you can include a flyer you give out at train and ferry stations.) If she likes the proposal and it meets her requirements (no more than $5,000, not religious, etc.), she puts it in her funding file.

The state’s the fiscal year runs from April 1 to March 31, so requests must be in by September or October to be considered for the next year, she said. As the April budget deadline gets closer, she prioritizes the funding file. “By now [December],” she said, “my priority list is almost done.”

In early February, she sends all her high-priority proposals to the state’s finance team. Or sometimes, before sending the proposals to the finance team, the Staten Island assembly members (Cusick, Titone, Hyer-Spencer, and  occasionally Tobacco) caucus about priorities and funding for the Island as a whole.

Here’s when things can get interesting:

  • “Duplication knocks you out of the box,” she said. “You can’t ask all four assembly members for the same thing—the data are put into the system and if a duplication pops up, the proposal gets knocked out.”
  • Instead, tailor your request to the elected from whom you’re asking the money. Look at his or her geographic area and interests. The exception: If you have a project that affects the entire Island, she said, you can ask all four assembly members for funding but you need to show the proportion of people in each of their districts affected by your program.
  • You can also break the funding requests into discrete pieces—in other words, say that your proposal is for a senior center that will draw people from the entire Island. You might ask one elected for the gym equipment, another for the arts & crafts room, the third for the cafeteria equipment, and so on. “But let each elected know you’ve sent the proposal to the other assembly members,” she said. Otherwise, it might be seen as a duplication and be dropped.

The proposals that pass the assembly members’ and finance team’s tests then become line items in the April budget.

Proposals that are funded—in other words,  are still in the budget when it’s passed—are then sent to the appropriate state agency (DOT for transportation requests, the Dormitory Authority for housing requests, and so on). The agency’s rules may be different from hers—for example, salary costs may be okay—but its requirements for information will be much higher. If you don’t meet the agency’s requirements, she said, no matter how hard she fought for your proposal, you won’t get the money.

Capital funds

Capital funds are used for infrastructure, Janele said, and the state’s capital monies are set aside to support communities. A new building would fall under capital funding. However, chairs, tables, computers, and so on, to fill the  building would fall under member items, she said, although sometimes furnishings do get funded through capital funds.

Capital requests draw on a bigger pool of money, she said, and the rules are more lenient. Every elected has access to capital, and $250,000 to $3 or $4 million is the usual range for requests. An individual elected can get access to $100,000 to $250,000; you probably need to involve multiple electeds for the million-dollar proposals.

The timeframes are longer than for member item grants, which have to be spent by the end of the fiscal year. A typical timeframe for smaller capital projects is three years, and up to 10 years for large projects.

Sounds great, right? However, there are a few difficulties:

  • Every elected has access to the entire pool of capital money, but he or she has to fight with all the other assembly members for your chunk.
  • If you get capital funding, you have to put the money up first, and then get reimbursed. If you don’t have the cashflow to pay for the project, don’t ask for the money.
  • Don’t borrow against the money from the grant. Janele said that she can approve a proposal, but if the dispursing agency or agencies don’t like it, they’ll reject it. “More than one non-profit has gone under because they borrowed money on the promise of state reimbursement that didn’t come through,” she said.

A member of the audience asked whether leasing a building would prevent you from winning capital funding. “Capital requests are no good unless the lease is very long-term—99 years, for example. Also, a not-for-profit with offices in a religious institution with a short-term lease couldn’t get money from the Dormitory Authority. The not-for-profit wasn’t a religious organization itself, but that didn’t matter.”

The future

The future is not too bright for member items. “In 2010, next to nothing will be available,” Janele said. “The state’s financial situation may lead to a complete foreclosure.” But, she says, put your proposals in anyway. “Member items won’t go away forever,” she said. “We know that not-for-profits do good work with this money. Also, there’s a rainy-day fund in the Assembly” from which monies can be drawn in case of emergencies.

For capital grants, “we’ll have some capital because some funded projects won’t use all their money.” The state takes back and reallocates money from failed projects. “Don’t ask for millions,” she said. “Proposals for $250,000 to $500,000 work.”

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One Response to “How to get grants from elected officials”

  1. livingthenonprofitlife Says:

    No, they’re not, but what I find interesting is that the elected officials, in NY at least, are going out of their ways to let non-profits know what monies are out there.

    I’ve had letters and emails from Representative McMahon’s office saying that this or that federal grant is available, and that if we want to apply, we should ask them to write a letter in support of our application.

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