This Insights article was co-written with guest columnist Vann Pearsall, Director of Development for Coastal Land Trust.

When a nonprofit is starting a new initiative, or identifying a specific funding need, it is a natural response for a board member or stakeholder to ask: Why don’t you just write a grant for that?

It’s true that there are thousands of foundations giving away billions of dollars to address critical social and environmental issues. You will read about large government, corporate or foundation grants that are making a difference in our state, so it’s natural to assume that is the answer to funding our newest programs.

Grants are an integral part of a diverse organizational revenue stream, but they aren’t the solution to every organizational need. Most grant makers have restrictions or concentrate on a specific geographic region or special concern, or give to pre-selected organizations, which narrows down the prospects.

Restricted grants usually fall into one of these broad categories:

• Direct Service (Program) grants will fund only specific items needed to execute a specific program or initiative of the organization. For example, WARM receives program grants for building materials, permits, mileage, construction labor and case-working. Administering these grants can increase costs in other areas that are not covered by the grant, such as insurance coverage and accounting fees. So, unrestricted funds are needed to help spend the restricted funds.
• Capacity Building grants provide funding to make the organization stronger and more effective. These may cover strategic planning or succession planning for the organization, as well as conferences and board and staff professional development opportunities. Last year, the Coastal Land Trust received a grant to engage a marketing firm to help refine the message and brand to engage new audiences and highlight how conservation impacts the health and vitality of our coastal communities.
• Capital projects increase the organization’s assets and ability to fulfill its mission through the purchase or construction of land, buildings or equipment. This month, WARM volunteers are completing construction of a grant-funded storage/workshop building behind the office, enabling WARM to buy materials in bulk, as well as accept donations of appliances, cabinetry and other bulky items.

Unrestricted grants are the least common but ultimately the most important to our mission. They give the board the flexibility to put funds where they will best advance the mission.

At the end of 2013, with the state tax laws changing, the Coastal Land Trust was overwhelmed with new (unbudgeted!) requests from landowners who were eager to save their land before the end of the year. We secured unrestricted grants to help cover staff time, due diligence research and reports, and to contract professional consultants to complete the projects and save more than 11,000 acres of coastal habitat!

Grants make up a significant percentage of some nonprofit budgets because they can be low-risk and high-reward. Foundations want to give money away – it’s their job – and they fund immediate needs with limited staff investment. Staff members might spend 10 hours preparing an application and receive a grant for $50,000, while cultivating an individual for the same gift might take much, much longer.

But which is better for the sustainability of the organization?

According to Giving USA 2017: The Annual Report on Philanthropy, foundations accounted for 15 percent of the total charitable giving in the U.S. in 2016, while 72 percent came from individual donors.

Involving individual donors creates vibrant community support through which people understand social issues and are proud to be connected to the organizations trying to solve them. If we are attentive to their needs, they will grow with the organization and become ambassadors for the projects.

When the board is engaged with that process, the answer to the questions becomes “I think I know someone who would be interested in that project. Let’s go visit them.”

Combining her professional experience in the Cape Fear region’s housing and real estate for-profit sector and volunteer experience with disaster recovery and housing-related nonprofits, JC Lyle (formerly Skane) was hired in 2009 to serve as the executive director of Wilmington Area Rebuilding Ministry (WARM). WARM is a grassroots nonprofit whose mission is to make homes safer by completing urgent repairs, accessibility upgrades and storm damage. Under her leadership, WARM has steadily grown from serving 44 households in 2008 to 155 households in 2016. Her public recognition includes Wilma Magazine's 2012 Woman to Watch in the Nonprofit Category, a 2014 Coastal Entrepreneur Award in the Nonprofit Category, given by the Greater Wilmington Business Journal and UNC Wilmington’s Center for Innovation and Entrepreneurship, and invitations to speak at NC Center for Nonprofits Conference and NC Affordable Housing Conference. She will graduate in May with her Master of Business Administration at UNC-Wilmington.