Why financial sustainability and strategic planning need to come before chasing your next grant.
I've had conversations with not-for-profit organisations that start with something like, "We're running low on funds, our reserves are disappearing, and we really need to find some grants quickly."
I understand the pressure these organisations face, particularly when they're delivering important community services with limited resources. However, these conversations highlight a misunderstanding about what grant funding can realistically achieve.
Grants are not a financial rescue plan, and they should never be treated as one.
A sustainable grants strategy for not-for-profits requires forward planning, sound financial management and a clear understanding of organisational priorities. Grants can support long-term goals, but they're rarely suitable for addressing urgent cash flow shortages or ongoing financial losses.
As a Chartered Accountant and grants strategist, I look beyond funding opportunities to understand an organisation's financial position. Where is the money coming from, and where is it going? Are programs covering their costs? Are reserves being depleted? What’s our runway?
Sometimes, the answer isn't another grant application, sometimes it's an honest conversation about how the organisation operates and what needs to change.
Can grants help a not-for-profit experiencing financial difficulties?
Grants can contribute to an organisation's long-term financial sustainability, but they're rarely a reliable solution for immediate financial distress. Grant programs have eligibility requirements, application deadlines, assessment processes and approval timelines. Funding decisions can take months, and successful applicants may wait longer before receiving their money.
Many grants also support specific projects or community outcomes rather than existing operating deficits or financial shortfalls.
I've seen organisations place enormous hope in their next grant application, believing successful funding will somehow make everything okay. However, if underlying financial problems remain unresolved, another grant may simply delay the problem rather than solve it.
Additional funding can even create financial pressure when it requires co-contributions, extra staffing or ongoing commitments beyond the funding period.
If you're wondering how you'll pay next month's bills, grants are unlikely to provide the immediate certainty you need. This is why grant funding should form part of a long-term strategy rather than an emergency funding solution.
Is your not-for-profit spending more than it can afford?
Financial sustainability requires organisations to understand both their income and expenditure, rather than focusing solely on securing additional funding. This is where my accounting background influences my approach. When an organisation tells me it needs more funding, I consider whether existing resources are being managed effectively and whether programs are financially sustainable.
Are your programs operating at capacity? Are they covering their costs? Do you understand the full cost of delivery, including staffing, administration, insurance and facilities?
Perhaps a program designed for 30 participants now regularly attracts only 10, while operating costs remain unchanged. Maybe you’re running too many programs and a condensed offering may be worth considering.
There may be excellent reasons to continue delivering that service, particularly if it supports vulnerable people. However, the organisation needs to understand the financial implications and have a sustainable way to cover the shortfall (in the short-term and the long-term.
I'm not suggesting every not-for-profit program should always generate a profit, as many essential services require subsidies, and that's reasonable when those decisions are deliberate and affordable, but it also needs to be sustainable.
The concern arises when programs consistently operate at a loss, reserves are being depleted, and nobody questions whether the current delivery model is sustainable.
Regular financial reviews, realistic budgets and cash flow forecasts help identify these pressures before they become serious problems.
"But we've always done it this way!"
Longstanding programs and services should be reviewed regularly to ensure they remain relevant, effective and financially sustainable. Perhaps your organisation has delivered a program for 25 years, or your community expects a particular service. I appreciate the emotional investment involved, but community needs, operating costs and funding arrangements change over time.
What made sense 20 years ago or even 3 years ago may no longer be financially responsible today. That doesn't automatically mean closing programs. Could they operate less frequently, be delivered collaboratively or use a more cost-effective model?
Sometimes, difficult decisions are necessary to protect your organisation's future.
If you exhaust your reserves trying to maintain every service, you risk losing the ability to deliver any of them.
Financial sustainability and community impact should work together, rather than compete against each other.
Why financial sustainability is everyone's responsibility
Financial sustainability is a shared responsibility of not-for-profit boards and management teams, requiring regular oversight of income, expenditure, reserves and future commitments, across the whole organisation.
It is important for NFP Boards to understand the organisation's financial position, monitor reserves and ensure commitments are realistic, while also understanding the role of grants, fundraising and other revenue-generating activities within the organisation.
That means reviewing budgets, questioning program performance and making decisions when activities are no longer financially sustainable on a regular basis.
It also means understanding the difference between having money in the bank today and having sufficient resources to meet future commitments.
An organisation might appear financially comfortable after receiving a large grant payment, but much of that funding may already be committed to delivering specific activities. Good financial management isn't about reducing community impact. It's about ensuring your organisation has the resources to continue delivering that impact.
Why does your not-for-profit need a 3-5 year strategic plan?
A 3-5 year strategic growth plan provides direction for an organisation's programs, financial priorities and funding decisions, helping ensure grant applications support long-term goals. Many organisations are so focused on immediate demands that they haven't properly considered their longer-term direction and vision.
Some have strategic plans that haven't been reviewed for years, while others have ambitious goals without understanding what achieving them will cost. Without that bigger picture, developing a meaningful grants strategy becomes difficult.
A practical strategic plan should identify your priorities, intended outcomes and financial requirements, supported by realistic budgets and forecasts.
If you're planning to expand a program, you need to understand how you'll fund it both during and after any grant period.
The availability of grant funding shouldn't determine which projects you deliver. Your strategic priorities should determine which funding opportunities you pursue.
This approach helps organisations avoid taking on additional commitments simply because funding happens to be available.
How do you develop a sustainable grants strategy for a not-for-profit?
A sustainable grants strategy identifies funding priorities, suitable grant opportunities and the preparation required to pursue funding consistently over time. It starts with understanding your organisation's goals, identifying suitable grants, preparing supporting documentation and building a funding pipeline aligned with your priorities. This preparation takes time, but it helps you pursue appropriate opportunities and submit stronger applications.
Success is never guaranteed, but consistent planning and preparation put you in a better position.
Grants should also be considered alongside donations, philanthropy, sponsorships, partnerships and other income sources, ensuring you are optimising the opportunities available to you – especially if you also have DGR status. The goal is to build a sustainable funding model rather than depending on the next successful application to keep operating.
Why my approach goes beyond grant writing
As a Chartered Accountant and grants strategist, I bring both financial expertise and grant funding experience to the organisations I work with. I want to understand whether programs are properly costed, whether funding opportunities align with strategic priorities and whether new commitments could create additional financial pressure.
Sometimes that means asking uncomfortable questions or challenging how things have always been done. I'm happy to work with organisations experiencing financial challenges, provided they're willing to examine the underlying issues and make informed decisions.
However, I can't promise to find a grant that will magically rescue an organisation already in serious financial distress.
If you're simply looking for someone to solve an immediate cash flow problem through grant applications, I'm probably not the right person.
But if you're ready to plan strategically and address the bigger picture, that's a conversation I'm always happy to have.
Strategy first, grants second: Where do we start?
A successful approach to grant funding begins with understanding your organisation's priorities, financial position and readiness before pursuing applications.
This is why my Grants Strategy Game Plan is a good starting point for new clients wanting to take a strategic approach to funding and grants.
This 30-day program helps organisations clarify their priorities, assess their grant readiness and develop a more intentional approach to funding.
From there, we can determine whether progressing into a more comprehensive four-month program makes sense.
I want organisations applying for the right opportunities, for the right reasons, with realistic expectations about what's involved.
Please don't wait until you're desperate for funding
Proactive financial planning and a clear grants strategy give not-for-profit organisations a stronger foundation for long-term sustainability.
Please don't wait until your reserves are running low before thinking seriously about your funding strategy. Review your financial performance, understand your program costs and have the difficult conversations early.
Grants can make an enormous difference, but they're most effective when they're part of a proactive, realistic and sustainable plan.
My goal isn't simply to help you secure your next grant. It's to help you build a more strategic approach to funding that supports your organisation's future.
Ready to stop chasing grants and start planning strategically? Explore my Grants Strategy Game Plan and let's start with a plan that makes sense for your organisation.
Written by Liz Fleming, Chartered Accountant and grants strategist at Grants Club. With a background in financial management and grant funding, she helps Australian not-for-profits develop practical, sustainable funding strategies.