Local, state and federal government funding is becoming a growing source of support for nonprofit environmental organizations all over the country. (In truth, all nonprofits are already receiving government support in the form of their exemption from the payment of corporate income tax and sales tax and in their reduced mail rates.) By some estimates, as much as 40% of overall nonprofit support comes from government sources. Government money has long been important in such nonprofit sectors as education, social services and health. It has played a lesser role in funding environmental nonprofits, in part because of mutual mistrust and even hostility between government agencies and the nonprofit environmental community. However, this situation is changing. More and more public funds are available these days for work on environmental activities, particularly if your organization is community-based and has the involvement of a diverse array of stakeholders. There are many new government environmental grant programs, probably as a result of increased awareness on the part of environmental agencies such as the Environmental Protection Agency, the Fish and Wildlife Service, the Forest Service, and many others, of the need for nonprofit partners in carrying out their appointed functions. A good example is the EPA's 319 grants program, administered by the states as a way to help control non-point source water pollution (from fields, streets and yards) that can best be addressed by citizen participation and cooperation.

When and How to use Government Funding

Government funds can sometimes be used to start up an organization, but their best use is for specific projects which mutually benefit both the nonprofit and the public agency involved. Even more than most private foundations, government agencies generally fund specific projects with established beginnings and ends and specified “deliverables.” These funds are usually NOT appropriate for ongoing operating support, for emergency situations, or for advocacy or controversial activities such as stopping a highway or dam.

Drawback and Pitfalls

One fact that environmental groups should always bear in mind when considering government funding is that the level of government support at any given time will depend to some extent on resources available and the prevalent political climate. An election, a new appointment, or a dip in the economy could end your government support overnight.

There are other drawbacks, too. Before giving in to the siren call of government money, you should ask yourself several questions. The first is: are you really prepared to put in the substantial amount of time in research, partnership building, writing, and other aspects of government fundraising that is required? Agency grant programs, especially if the grants are larger than pocket change, demand a substantial effort. For example, the effort required to put the proposal together is often far greater than that required for a foundation. It may include filling out special forms like Standard Form 424, recasting your proposal and budget in a different format, seeking letters of support, and providing a substantial number of backup materials such as resumes, affirmative action statements, personnel policies, and resolutions from your Board of Directors authorizing you to apply.

The second question you should ask is: what are the strings attached if you do get the money? Often, government grants require that you “match” the amount of the grant at a stipulated ratio. For example, if the terms of the grant stipulate a 40% match, you must raise an additional $40 for every $100 the government provides.

In addition, government “grant” money most often comes in the form of contracts or cooperative agreements rather than pure grants. If your proposal gets chosen, the next step is often to negotiate a “legal contract” for the services that you will provide. Most state and federal government grants are really contracts for services under terms largely dictated by the funding agency. These contracts can make demands and require products (sometimes called “deliverables”) which may be difficult for your organization. So be prepared to talk through the details of the contract and think carefully about what you are committing to do. Once you sign your name to the contract, you will be signing a binding, legal agreement which an agency staffer will then administer for the life of the grant.

The third question is: do you have the financial capacity to administer a government grant? When you start receiving government funds, you will need to be sure that you have a financial management system adequate to handle the extra project management and reporting requirements. Be prepared to provide regular narrative and financial reports, and understand that the financial reporting requirements will demand a solid and efficient financial management system in your office to match work with contract “deliverables” and document time charges and expenses incurred. Beyond that, you may also need to improve your end-of-year audit depending on how much public money you get in a single fiscal year. If you don't do a full audit currently, you will need to do one if you reach a certain level of government funding in a given year. State and federal agencies set thresholds for expanding the rigor of your audits, so check with your accountant on those requirements prior to entering into a contract. Also, when you prepare your project budget, make sure that you include the extra costs for project management, financial management, and other additional expenses. You don't want to be subsidizing a state or federal grant project with your membership income.

The final question is probably the most daunting of all: Can you afford to take government money? For most government funding you will not get your money up front, but will need to perform the work and then invoice the agency as outlined in the contract. This means that you will often have to front the cost of doing the work, paying salaries and subcontractors, paying expenses like the phone bill and rent, preparing the reports, etc. Only when the work is done will you be able to invoice the agency, sit back, and wait expectantly for your check. And sometimes, you will wait… and wait…and wait! Your contract may stipulate payment within 60 days of invoice approval, but that doesn't mean that it won't take longer if you submitted the invoice incorrectly, if your documentation was incomplete, or if the agency contract manager has gone on vacation.

Locating Grants

If, after reviewing all the pitfalls mentioned above, you are still interested in pursuing government funding, how do you get started? Let's begin with regular federal and state government grant programs. Some federal agencies such as the Environmental Protection Agency (EPA), U.S. Geological Survey (USGS), the Fish and Wildlife Service, and the Natural Resources Conservation Service (NRCS), as well as their state equivalents (Department of Natural Resources, Department of Environmental Protection, and so on), have programs that can be identified by simply talking to the right people in the agency or collecting information from publications or web sites. (For a listing of publications where you can find out about the best potential federal funding programs for river and watershed groups, click on Resources at the beginning of this chapter.) These offerings happen throughout the year at various times, and once you have found a grant program that interests you, you can usually get on a mailing list for announcements.

These funds are usually appropriated by Congress or the state legislature, or are a part of legislation such as the Clean Water Act, Safe Drinking Water Act, or the Farm Bill. In some cases, these programs are funded annually by a specific piece of legislation (for example, the Clean Water Act), by a state or federal activity (for example, the Legacy Competitive Grant Program funded by Alabama Environmental License Tag sales), or some other regular source.

Sometimes the federal government gives grants directly to nonprofits, as with the EPA Environmental Education Grants Program; in other cases, the feds pass the money to the state to administer, as with Clean Water Act 319 funds, used for nonpoint source remediation projects. Each government funding program has its own quirks, and it is up to you to find them out. Do your homework so that you know where the funds are, what they will be used for, and who controls them and get yourself on the appropriate mailing lists for any publications, announcement or requests for proposals so that you will be among the first to learn about new funding opportunities.

Applying for a grant

With most government granting programs, the agency in charge releases a Request for Proposals (RFP) and receives hundreds of applications for a small number of grants. In this highly competitive process, you will need to submit projects that are closely aligned with what the agency wants to fund. You should talk to someone in the agency who is involved with the funding program to get a better idea of exactly what the agency wants. Your proposal should represent your very best effort to comply with all the requirements listed in the Request for Proposal. If you are missing anything, your proposal may be deemed incomplete and you'll be out of the game.

Government proposal writing has much in common with foundation proposal writing, so you might want to review the relevant section of that chapter. A few tips for preparing government grant proposals include:

• Give thought to partnering. Federal agencies like applications that involve more than one organization
• Read the instructions carefully before applying. Each government agency usually wants a slightly different format. Organize your proposal exactly as directed by the RFP or application. Even more than foundations, government agencies are sticklers for the details
• Establish the credibility of your organization by mentioning other projects you have carried out, listing key board members or staffers, etc. You need to convince the agency that you can help them get their work done, deliver what you promise, and save them time and hassle
• Make objectives specific, tangible, measureable and realistic! Connect what the agency wants the money used for with your own program goals and objectives.
• In preparing your budget, be sure to include the costs to your organization to administer the project, unless this is strictly prohibited by the application instructions. Most environmental nonprofits include a portion of their ongoing operating costs (rent, utilities, hiring costs, accounting costs) in their government grants, since these costs represent a legitimate cost of carrying out the project.
• get letters of support from those who will benefit, including municipal officials, local organizations, other community organizations, businesses, and other federal or state agencies.
• Try to get endorsements from members of the congressional delegation for the district in which the project is located. Working with their staff during the writing of the proposal is a smart move as they can sometimes advise you on the best approaches, provide contacts with key individuals, and even talk with the granting agency themselves.

Networking

Another approach to government funding is to seek funds from the many special pots of money which reside in federal and state agencies. These do not show up as grant programs; indeed, the agency may not even be thinking about giving this money away. This is where networking is essential. Often you can uncover these opportunities by talking with people in government offices and finding out what they are trying to accomplish and how you can help them! You migh also try taking a specific project and introducing it to those people in government that you work with closely, getting them to advocate for the project and guide you to the right offices, programs, or people who can help. This approach can be frustrating and time consuming at times, but there is much to be gained in learning about government programs and capabilities, meeting new people who can help your organization, and perhaps even identifying other ways that these agencies can contribute to your project.

Budgetary Appropriations

A third approach to government fundraising is to work with your Congressional delegation and agencies to get funding for your project appropriated or designated in the federal or state budget. This requires a substantial effort, but if you have the right people working with you in the legislature or in the agencies, it can be an excellent way to go. Examples include getting funds designated within the National Park Service's budget for creating community trails along the Merrimack River. With help from a key member of Congress, the Merrimack River Watershed Council was able to get special funds to support their effort included in the federal budget, and then worked out a cooperative agreement with the National Park Service for their organization to be part of the project. Another example is the Massachusetts Watershed Initiative. Nonprofits in Massachusetts worked to include a watershed grants program in an open space bond bill which provided an authorization of $2.5 million. A portion of this amount is given away as watershed planning grants to watershed and river groups.

Special Opportunities

Federal agencies have a fiscal year that ends on September 30. If the agencies fail to spend their allotted funds by this date, they usually cannot be carried over to the next fiscal year. As a consequence, some federal agencies begin thinking in June or July about creative ways to use any monies that have not yet been committed to further the purposes for which they were intended, or their agency's mission. This recurring situation may provide opportunities for you to secure government funds, usually in fairly small amounts, for your organization. Try talking to likely agencies, such as the National Park Service, the Environmental Protection Agency, or the Fish and Wildlife Service in the summer to see if such funds are available and explore ways you can help put them to good use. It doesn't happen every year in every agency, but it does represent an opportunity that you should be aware of.

Recognition

Like all funders, government agencies like to get credit (in most cases) for their support, particularly recognition that makes the agency and its programs look good. Be sure to list them in any programs, brochures, reports or other publications produced wholly or in part with their help. Ask them to stand up and take a bow if they are in the audience at a government-sponsored event. Have participants in workshops write thank-you letters to the agency or better still to a state or federal legislator. Agencies will remember this kind of recognition next time you knock on their door.

To be successful in obtaining government grants, you need to have a clear idea of what you want to do; how much help you need; how you can use government help to leverage other resources such as you own staff or volunteers and private sources of funding like corporate or foundation grants; and how this will help the agency meet the conditions for the use of those funds. You need to be dogged in your pursuit of these funds and build relationships with agency people. The real long-term benefit of this approach is that you will get to know some very good and committed people who may help you in more than just this one effort. Building those relationships is what fundraising is all about.

Glossary of Terms

Award. Financial assistance that provides support or stimulation to accomplish a public purpose. Awards include grants and other agreements in the form of money or property in lieu of money by the Federal Government to an eligible recipient.

Closeout. The process by which a Federal awarding agency determines that all applicable administrative actions and all required work of the award have been completed by the recipient and Federal awarding agency.

Continuation. An extension of an assistance agreement for an additional funding/budget period for a project the agency initially agreed to fund for a definite number of years.

Cooperative agreement. An assistance agreement in which substantial government involvement is anticipated during the performance of the project.

Cost sharing. The portion of allowable project costs that a recipient contributes toward completing its project (i.e., non-federal share, matching share).

Disallowed costs. Those charges to an award that the Federal awarding agency determines to be unallowable, in accordance with the applicable Federal Cost Principles or other terms and conditions contained in the award.

Indirect costs. Costs(a)incurred for a common or joint purpose benefiting more than one cost objective and (b)not readily assignable to the cost objectives specifically benefited without effort disproportionate to the results achieved.

In-kind contribution. The value of a non-cash contribution to meet a recipient's cost sharing requirements. An in-kind contribution may consist of charges for real property and equipment or the value of goods and services directly benefiting the funded project. NOTE: the assistance amount may also include a government in-kind contribution.

Matching funds. The portion of allowable project costs a recipient contributes to a Federally funded project. The match may include in-kind as well as cash contributions, but excludes any other federal funding.