Dreams to Dollars

Nonprofit organization helps Tennessee charities win grants

When Donna Fortson created the Memphis Family Shelter a decade ago, she never dreamed her tiny charity could get a big grant from the federal government. Instead, Ms. Fortson started the homeless shelter with $25,000 she scraped together with help from other women in her church.

But by the end of its second year, Ms. Fortson’s charity, which houses women and children for up to two years, had won a $74,000 grant from the U.S. Department of Housing and Urban Development. And every year since then it has received that much, if not more, from the federal government, garnering a total of $1.7-million to date.

Ms. Fortson, however, takes little credit for obtaining the federal dollars.

Instead, she says the grant came about because of help from the Grant Center, a nonprofit organization in Memphis that has assisted more than 1,200 small and mid-size charities in eight counties since its founding in 1992.

The center offers services such as research and grant-proposal writing and financial and management training, all with the aim of helping organizations raise money from national grant makers. With five full-time staff members and an annual budget of about $700,000, the Grant Center has helped local groups secure more than $100-million from outside the region.

1% of Foundation Grants

The center was created by community leaders who realized that local financial resources were insufficient to combat escalating problems such as poverty and homelessness.

“This has never been a philanthropically rich area,” says Nancy McGee, who joined the center when it was started and became executive director in 1995. “Nonprofit groups here don’t have many foundations or corporate-giving programs to tap into.”

Grant-making foundations in Tennessee account for 1 percent of foundations nationwide, hold 0.8 percent of the assets in such funds, and provided 1.1 percent of all foundation grants awarded in 2003, the latest year for which data are available, according to the Foundation Center, in New York.

With its focus on raising money from federal agencies and big private foundations, the Grant Center stands out from other organizations that provide management advice to charities. Most of those groups provide training and other services to local charities but little in the way of hands-on assistance with fund raising to win big grants from outside their region.

The center’s 450 member charities pay an annual fee of $75 or $150, depending on their size. In return, they receive weekly listings of grants that are available and unlimited consultation on drafting grant proposals.

If they wish, members can also hire professional proposal writers, whose fees are, in many cases, subsidized by the Grant Center and whose work is supervised by the center’s staff. In addition, members get discounts on an array of educational workshops offered by the center.

The Grant Center, with its modest six-figure budget and multimillion-dollar returns in grants, “is a model for other cities in terms of strengthening their philanthropic sector,” says Leo Arnoult, a Memphis fund-raising consultant and the center’s former board chair.

Mr. Arnoult, who also serves on the board of the American Association of Fundraising Counsel, a group of large consulting firms, says that he has told colleagues in other parts of the country about the Grant Center’s reasonably priced fund-raising services. “They say, ‘Wow, I wish we had one of those in my area,’” he says.

Providing Counsel

Originally, the Grant Center’s founders planned to operate a research library, providing listings of grants that were available and application guidelines, but quickly realized charities needed much more than that, says Ms. McGee.

“You can provide all the information in the world, but it doesn’t matter if organizations don’t have the expertise to pursue the opportunities.”

Mike Warr, executive director at Porter-Leath Children’s Center, in Memphis, says the services his organization received from the Grant Center are directly responsible for the more than $6-million in federal aid his charity has received since 1999.

Most of the money Mr. Warr’s charity obtained has come from what was originally a failed effort his group made to get Head Start money from the U.S. Department of Health and Human Services. Grant Center officials helped Mr. Warr rewrite what ultimately proved to be a winning proposal. They also advised him to create a new department devoted to improving quality and evaluating results in his charity’s foster-care, feeding, adoption, home-visitation, and other programs.

“Now, we can always establish outcomes, which funders are fixated on,” he says.

Christ Community Health Services, also in Memphis, is another charity the Grant Center persuaded to add an evaluation system.

In one project aimed at preventing teenage pregnancy and encouraging inner-city youngsters to stay in school, the charity’s first evaluation four years ago showed that simply promoting abstinence was not enough.

“These kids lacked hope, not information about sex,” says Burt Waller, the charity’s executive director.

To improve results, the organization began recruiting college students and other young adults to serve as mentors to the teenagers and to help organize activities for them. Now the group says that only about 1 percent of participants in the program get pregnant, which is a smaller number than in the past.

The Grant Center also recommended that the charity use one evaluator, a health-services researcher with whom the charity now has a contract, rather than continuing to hire a different peson to evaluate each of its projects.

“It’s cheaper and we get more robust information now because our evaluator really knows the organization’s services,” says Mr. Waller.

When seeking grants from federal agencies, Mr. Waller also got help from a Washington lobbyist the Grant Center hired to assist its members.

The lobbyist helps answer questions from nonprofit groups about their eligibility for federal funds and the federal grant-making process, as well as get information from government officials.

High Demand

Not every charity is completely happy with the Grant Center’s services, however. “Sometimes their bench of contractors is not deep enough and no one is available to help us. This happened a couple of times in the last year,” says one nonprofit executive, a Grant Center member who spoke on the condition of anonymity. “Demand for their services is outstripping their ability to assist groups.”

Says Gid Smith, president of the Community Foundation of Greater Memphis and one of three founders of the Grant Center: “I am prejudiced for them and against them. They do good work but do not always do it as well as they could. They have a lot of claims on their services and are not always as responsive as they could be.”

Ms. McGee, the executive director, admits that the center’s proposal writers and staff members are sometimes spread too thin.

“We occasionally run into cases where a tremendous number of grant opportunities are announced and everything is due at the same time, and our resources may get tapped out,” she says.

To deal with the problem, she says, “we are in the process of expanding our pool of grant writers and consultants.”

The Grant Center also wants to expand its ability to help its members get grants from private foundations and sources other than the federal government. Of the $105-million that the Grant Center has helped raise, some $97-million has come from federal agencies. The center has recently added workshops to help its members compete for federal contracts to provide specific services and line-item appropriations, which are funds earmarked by members of Congress for particular organizations.

Helping a Church Group

As it struggles to increase foundation grants to the region, the Grant Center already has a few success stories.

Last year, for example, it helped Christ Community Health Services raise $1.4-million, half of which came via a grant from the Robert Wood Johnson Foundation. The money is being used to expand the charity’s Memphis Healthy Churches project, which trains volunteers to work with pastors to prevent diabetes, cancer, and other diseases by promoting healthy behavior and medical screenings for church members.

“It took us three tries before we finally got that grant,” Mr. Waller says. “And we would never have kept trying if the Grant Center hadn’t made us believe it was worth pursuing.”

Not only did the Grant Center help write and rewrite the organization’s proposal, but the center’s officials organized a day-long site visit to the charity, which was required by foundation officials. “They wrote scripts for us, made us practice, and orchestrated the entire thing,” says Mr. Waller.

Ted Hardgrove, a deputy director with the Robert Wood Johnson Foundation, says that he saw marked improvement in the Healthy Churches project during the site visit. One thing that impressed him, he says, is that the charity brought in pastors who would be involved in the program, and he could see they had a strong role in shaping the program. “They brought in a deeper community base,” he says. “We could see that this was more than a staff program.”

Unlike Mr. Waller’s organization, however, some Grant Center members are not ready to compete for any sort of grant, says Ms. McGee. That’s why the center has been adding training sessions and other services to help members improve their operations.

“We still see organizations who think there’s all this free money out there and it’s easy to get grants,” says Ms. McGee. “They don’t understand that grants can cost them money.”

Charities often overlook overhead and administrative costs associated with projects; such costs could run as high as 40 percent, but a grant will cover only 5 percent or none, she says. “We have seen a number of organizations that, when you look at how much it cost, they are going in the hole,” she says.

She says the center plans to consolidate its grant-seeking efforts into one division that will assist charities that it has deemed capable of competing for grants; the rest of the organization will concentrate on helping other groups build the internal practices and procedures they need to be effective.

One sign of the Grant Center’s expanding focus is its Program for Nonprofit Excellence, begun in 2003. Nine organizations were selected for the three-year project, in which each charity underwent an organizationwide assessment to determine its most pressing needs and was matched with a consultant to help carry out a plan for change. A second group of five more organizations started the program last year.

Friends for Life, a Memphis AIDS prevention and treatment organization, is now entering its final year in the program. Its executive director, Kim Moss, says he is confident his charity will soon be ready to seek grants and other new sources of revenue, after years of relying mainly on fund-raising events that were time-consuming to organize.

In 2000, when Mr. Moss took the helm of the troubled organization, Friends for Life was headed toward bankruptcy and had an inactive board, he says.

The finances were in such bad shape that his first task was to lay off a third of the staff. He says it quickly became clear to him why the organization had had a different executive director every three years, and he could see himself burning out just as quickly.

So when Mr. Moss heard about the Grant Center’s new Program for Nonprofit Excellence, he jumped at the opportunity.

“Until we addressed the issues of our organization, there was no way we’d be able to fix our financial problems,” he says. “At that time, some large grants were available and a good fit for our mission, but the agency just couldn’t handle it. I didn’t have the staff to oversee the programs.”

Now Friends for Life is recovering, which Mr. Moss attributes largely to advice from his Grant Center consultant.

“She’s run a nonprofit in the past, so she’s faced many issues I’m up against,” he says. The consultant’s best recommendation, he adds, was creating two new positions for employees that have lifted some administrative burdens off his shoulders; he recently appointed one of them to be his deputy director.

“This frees me up to develop programs and get out in the community and form relationships with community leaders and government officials,” he says.

Mr. Moss says he has now identified several potential new sources of money and applying for federal grants is at the top of his to-do list.

“I never thought we could go after federal grants. You need to have everything from the business office to the clinical oversight running perfectly,” he says. “It wasn’t until going through this program that I’ve started to feel like we can handle a federal grant.”