Sustainability Planning: Looking Beyond the Grant Timeline

If you’re a nonprofit leader or grant proposal writer, you’re likely familiar with the dreaded “sustainability question” on grant applications.

How will you sustain this work after the grant term?

Most of us writing grant proposals pour our energy into describing our community’s pressing needs and how our programs will make a difference. By the time we get to the “sustainability question,” there’s not much gas left in the proposal-writing tank. That means we often dash off a quick, vague answer.

We tell funders we’re going to seek other support. We’re going to measure and demonstrate impact. We’re going to diversify funding streams. Usually, these standard answers are adequate, even if they don’t strengthen our pitch.  

But what if I told you the “sustainability question” was actually a missed opportunity—not for securing the grant, but for how you think about long-term sustainability for your organization?

The Grant Funding Sustainability Gap

When you’re leading a nonprofit, it can seem like fundraising is an always-on treadmill. As soon as you land one grant, you need to start planning for the next. You’re thinking about making sure you meet payroll next month and six months from now.

A 2019 Bridgespan report showed that fundraising sustainability is a widespread challenge—even for some of the best-funded nonprofits. In assessing the financial health of 247 nonprofits co-funded by 15 of the largest U.S. foundations, researchers found that:

More than half suffered from frequent or chronic budget deficits, defined as at least two of the past five years. And 40 percent had fewer than three months of reserves in the bank to cushion financial shortfalls. In fact, 30 of the 274 organizations showed negative reserves—making them technically insolvent.

One major contributor to this sustainability gap is the limitations many foundations have traditionally placed on overhead funding. A Hewlett Foundation report reveals that:

Studies have shown that nonprofits struggle to, at a minimum, recover their full operational and overhead costs, let alone invest in essential capacity strengthening — what is commonly referred to as the nonprofit “starvation cycle.”

Luckily, many funders are increasingly changing their approach to overhead. This includes raising indirect cost rates for project grants, providing more unrestricted general support grants, and making dedicated capacity-building grants. This is a very positive shift, especially since research shows that receiving any type of capacity-building funding is “positively associated with nonprofit financial growth.”

The good news is you don’t have to wait for a funder to approach you about building capacity. Funders are already asking you about your sustainability plans in your grant proposals.

All you need to do is start showing them how you are investing in your organization’s sustainability—and how their grant today will help strengthen your organization for tomorrow.

Proactive Sustainability Planning: It Is Possible

It may sound obvious, but the first step in nonprofit sustainability is making sure you have a long-term vision and a plan to achieve it. Many nonprofits operate on a shoestring. Leaders are running from one fire to the next, with little time to plan for the future. While organizations may squeeze in annual planning, this can easily end up as a 12-month to-do list rather than a cohesive strategy.

In contrast, a long-term vision and strategy often take the form of a three to five-year strategic plan. But regardless of what the final document is called, what matters most is the process. An effective nonprofit sustainability and strategy planning process is designed to build alignment across your organization’s board, staff, and other stakeholders. The results are a shared vision—informed by stakeholder feedback and grounded in consensus building—and an actionable, multi-year strategy to achieve that vision, including how to fund the work.

Once you know your organization’s true sustainability plan, you can start weaving it into every aspect of your grant applications. For example, when you talk about your program impact, you can discuss how you will share those results with your stakeholders, including funders. When you talk about financial sustainability, you can outline the ways you’re strengthening your fundraising capacity.

And when you answer that dreaded “sustainability question,” you’ll be able to talk about the real steps you are already taking to build sustainability for your organization.

Nonprofit Fundraising Sustainability and the Power of Relationship-Building

In fundraising, you often hear that it’s about “who you know.” This refers to the major donors and program officers with whom members of your board and staff have previous relationships. Of course, existing relationships are incredibly valuable—and you should be leveraging them.

But not every organization will have a big contact list to start with. That’s okay, though, because you can build and nurture your list over time.

Nonprofit fundraising isn’t only about who you know right now. It’s about who understands and values your organization’s work.

When it comes to fundraising sustainability, consistent and quality communication is your biggest asset. After your grant is awarded, your job is not only to deliver on the impact you proposed but also to regularly communicate to your donors and program officers about that impact.

Plus, even if a particular grant is not awarded, you can still keep those program officers updated. We often coach clients to see that a grant denial isn’t an end, but a beginning of a potential future funding relationship. 

By communicating regularly about your work and impact, you’re demonstrating to donors that your organization is sustainable. Providing regular updates demonstrates that your organization is committed to making a difference beyond any single grant award. It’s also an opportunity to showcase your sustainability plan in action.

Then, when it comes time to submit a new or renewal proposal, your funders will already be thinking of your organization as a long-term investment.