How Large Should a Federal Request Be for a Good ROI

Some points to consider for your organization's ROI

I was asked this frank, yet wonderfully complex question by a colleague the other day. The organization they work for has a strong grant seeking revenue line item comprised of foundations and the occasional state grant. The organization was recently considering applying for its first federal grant and was wondering what type of award size was “worth” the heavy lift of the application requirements. Given that the average federal grant proposal takes an average of 100 hours of effort to complete and submit, this is an important question to consider before diving into an application.

Here is a scenario similar to what my colleague and I discussed:

Is a $150,000 grant award enough for the work it takes to complete a federal application?

Maybe yes.

What if the $150,000 grant award is now a three year grant period, so it is actually $50,000 a year. Is that award a big enough return on investment compared to the work it takes to complete a federal application?

Maybe yes, perhaps likely not compared to the first scenario.

Unfortunately, or fortunately, depending on your perspective, there is no specific formula to apply that will help your organization decide if a potential federal grant award is “big enough” to be a strong return on your investment (ROI) of the time and effort it takes to write a competitive application and the capacity required to successfully manage the funding.

We are left then as grant professionals, facilitating our grant teams, trying to help our team navigate the question of “How large should a federal request be for a good ROI for *our* organization?” Here are some points to consider in that conversation:

  • What other costs will your organization incur as a result of going after a grant application, whether successful or not?
    • Are you engaging an external grant professional to assist with the facilitation of the process? Or to aid with writing the application?
    • Are you engaging an external evaluator to assist with the design of the evaluation section?
    • What additional staffing, tools or capacity support will be needed for successful grant management if the application is funded that is *not* part of the proposed budget?
  • What other positive benefits will your organization experience as a result of a successful grant application beyond the cash of the grant award?
    • What benefits will your collaborative partner relationships experience?
    • What new or expanded service will be available for the first time in your community as a result?
    • What new opportunities will you have to leverage other grant maker funds as a result of a federal grant award?

Clearly there is a lot to factor into your decision about the ROI of a federal grant application. Just as a grantmaker has numerous factors to consider when making a grant award, you also have numerous factors to consider when making the choice about whether or not to apply for a federal grant.

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