Overlooked Opportunity in the Grant Proposal: The Needs Statement

Hi, I’m Larissa, a Development Associate here at Ivanhoe Development, where I focus on writing grants and the foundational piece that leads to excellent grants: program design.

I’d like to highlight a critical piece of a grant proposal and a key insight from my perspective as a grant writer and grant review panelist—one often overlooked in its importance—the Needs Statement. 

I once came across a social post that stated something like, "The Needs Statement in grant proposal applications should be eradicated. Do we really need to describe how horrible things are in today’s world, where everything is burning around us?”

While I sympathize with the sentiment, I couldn’t disagree more. 

Needs Statements (or Needs Assessment, Problem Statements or Justifications—whatever the funder wants to call it) are the backbone of the proposal. In this for-profit business world, we understand the gravity of the question—what problem is this product or service solving? Here, it is easy to see that an invention or new idea needs a problem to justify its existence. In the nonprofit world, the question is no less critical. Without understanding the problem we are concerned about, we cannot create a program to address the situation. Not only does the Needs Statement build the foundational logic for your program activities, goals, and strategies, but it also presents an opportunity for the organization to demonstrate an aspect of programs that is increasingly emphasized: community engagement.

Funders at the foundation, state, and even federal levels are including questions in grant applications like, “ How do you involve the community in planning, program design, and implementation? How do you identify the community’s needs? How do you integrate Lived Experiences? Describe your community engagement strategies.”

These “bottom-up” program design approaches, which emphasize starting with the community's needs, understanding their worldview to shape programming, and sharing power in decision-making, are becoming markers and expectations of effective nonprofits. 

Though funders are now stating and emphasizing this more explicitly, the Needs Statement has always been where these questions inherently existed. It is in the Needs Statement where an organization demonstrates the depth of its connection to the community. This is where the funders meet the program’s target beneficiaries, learn how well the organization understands their challenges, and why the proposed program is the best solution. As someone who has sat on grant review panels and read endless needs statements, I find that these answers often shine a bright light on which organizations actively engage the community to shape programming and which aren’t. 

However, I have also worked with enough nonprofits to know that many nonprofits are doing some form of community-engagement work, but may fail to articulate or highlight this effectively in the proposal. Weak Needs Statements will only have overly broad data and demographics (only citing national data or research), outdated data, a narrow understanding or one-sided perspective of the issue, or unsupported claims that lack data or context. The best Needs Statements are crafted like funnels—laying the contextual foundation for a broad understanding of the issue and how your organization or program fits within it, narrowing down to more localized data. The stand-out Needs Statements paint as complete a picture as possible of the target beneficiary, combining quantitative insights (demographics, statistics) with qualitative elements (quotes, stories, case studies) gathered by the organization or partners for the specific proposed program. 

Here are three simple questions that an organization can consider when crafting their needs statements or reflecting on their approach of community inclusion in program design:   

How do we identify needs? 

What are all the ways your organization gathers feedback and uses that feedback to shape solutions? Is there more informal processes? Does the staff know where to collect and record participant feedback? Does leadership review this regularly? Does your organization organize formal group listening processes? Is there a community board? Are there multiple pathways for a community member to offer feedback or ideas? 

The strongest and stand-out approaches go beyond gathering feedback—they continuously share back insights back to the community to ensure there is alignment and a shared understanding of the issue. 

How do we generate program ideas and solutions? 

This question gets at the germination of program ideas—the format and process of this is particularly important to consider here. Does your organization design and project and then ask the community for input or feedback, or are there ideation sessions with the community before developing the project? Your organization may fall anywhere on a spectrum, from keeping the community informed about project ideas, to collaborating with a deeper, more formal partnership. 

How do we decide what program to implement, and how we will implement it? 

This question addresses the concept of power. Who ultimately decides which program will be implemented and how? Consider the format and process of your program design and implementation—this might include the type of touchpoints and frequency of contact with the community when implementing the project, the structure of the decision-making leadership groups and meetings. 

These questions help get at the heart of community-driven work and what we at Ivanhoe are passionate about doing—strengthening your connections to the community so you can steward your financial investments responsibly and effectively toward the needs of your community.

Speaking at EES: Understanding European Evaluative Perspectives

Ivanhoe Development (ID) remains focused on serving communities in the United States. However, the opportunity to learn about global evaluative perspectives is an invaluable addition to our work.

ID was invited to speak at the European Evaluation Biennial Conference in Italy this year. We presented a session entitled “Program Maturity: How Grants, Evaluation, and Design Intertwine.” It detailed our holistic approach to nonprofit development and the resource constraints that face resource-limited, community-based organizations (CBOs). Our interactions with this global community identified some evaluative barriers that exist regardless of geography. They include:

1. Evaluative Brevity: 

Survey fatigue remains an insidious issue within the evaluative space. Whether it involves asking Syrian refugees about their safety concerns or measuring economic growth from cash transfer programs in Malawi, surveys remain tedious and taxing, resulting in low data quality and transactional interactions with community members. At ID we have two standing surveying rules: 1) a survey’s length can always be cut by 20%, and 2) survey brevity respects our participant’s time and expertise. We believe that creating efficient, time-effective evaluative tools is a mechanism of respect.

2. Financial Catalysts: 

Money often drives the quality and depth of evaluation, forcing organizations to  compromise their goals or tool diversity to complete projects. Within our context, most CBOs may only spend 3-5% of their annual budget on evaluation. The solution is not to simply bemoan a smaller budget. At ID, we have a two-fold approach: 1) advocate to funders about the importance of evaluative activities and the need to provide specific funding for them, 2) create tools that can perform “double-duty” to gather quality evaluative data and also serve to support other activities as needed. 

3. Qualitative Appreciation: 

No matter where you are, numbers have historically been prized within the evaluative context. “Clear-cut” data and “more rigorous” quantitative methods have always taken center stage. While numbers do provide incredibly useful information, trends, and patterns, they do not tell the whole story. Qualitative methods such as storytelling, photovoice, and interviewing are gathering momentum (please note that these methods have been used to make decisions since the dawn of time, but within the Western context, these “tools” are relatively new) due to their low barriers to entry and freedom of expression. 

ID continues to hold to our most central value: humility. We remain lifelong learners and deeply respect our evaluation peers and clients. Our team looks forward to applying what we have learned to our everyday work. 

To check out our work, please see examples here or information about our training series here.

Building Economic Models: A Week of Progress & Innovation

Hello, I'm Connor Liebman, a Data Analyst at Ivanhoe Development. I'm excited to share with you some of the innovative work we've been doing in economic modeling. At Ivanhoe, we've been working hard to refine our economic models to better serve our clients. Our goal? To provide tools that demonstrate the fiscal impacts of programs and highlight the significant savings and positive community impacts.

Let's take a look at what we've accomplished this week.

The Foundation: Consistent Templates

We started by developing a consistent template for our economic models. This template is the backbone for all our economic models, ensuring uniformity and ease of comparison. Here's what we've included:

1. Fiscal Impact Analysis: This section quantifies the financial implications of running various programs. We assess costs, revenues, and net fiscal impacts, clearly showing a program's financial performance.

2. Program Savings: Here, we highlight the direct and indirect savings the programs generate. This includes cost savings from preventive measures, efficiency improvements, and reduced dependency on public services.

3. Community Impact: Beyond the numbers, we emphasize the broader positive impacts on the community. This includes improvements in health, education, and overall quality of life.

Scenario Comparison: Showcasing Value

A key feature of our models is the ability to compare scenarios with and without our client's involvement. This comparative analysis underscores the value added by our clients' programs, offering a compelling narrative for stakeholders and funders.

1. Baseline Scenario: We establish a baseline that depicts the current state without the program's intervention. This serves as a control, allowing us to measure the program's true impact.

2. Intervention Scenario: We then model the scenario with the program in place. This includes all anticipated financial and non-financial changes resulting from the program's implementation.

3. Impact Assessment: By comparing these scenarios, we can quantify the program's effectiveness and demonstrate how our clients' initiatives lead to tangible improvements and cost savings.

Customization for Clients: Flexibility Meets Consistency

While consistency is critical, we also recognize the need for customization. Each client has unique needs and operates in different contexts. Our models are designed to be flexible, allowing us to tailor them to specific client requirements. This week, we've enhanced this flexibility, ensuring our templates can easily accommodate various program types and community contexts.

By developing consistent, customizable, and impactful economic models, we empower our clients to demonstrate their value clearly and convincingly. We're excited about these refined models' potential to help our clients achieve their goals and make a positive difference in their communities.

As we refine our approach, we can't wait to see the real-world results these models will help our clients achieve. And speaking of real-world applications, let me give you a sneak peek into how we're putting these models into action.

Putting Our Models to Work: 

Our recent work has focused on developing two key types of economic models that demonstrate the power and versatility of our approach:

1. Public Service Cost Analysis Model: This model aims to provide detailed cost estimates for public service responses to various community situations. It breaks down expenses into personnel time, equipment usage, administrative costs, and support services. By offering a comprehensive view of operational costs, this model helps public agencies understand the financial implications of their services and identify areas for potential cost savings or resource optimization through nonprofit outreach programs.

2. Health Services Impact Model: We've developed a model that analyzes the economic impact of expanding primary care services to underserved populations. This model projects potential cost savings by comparing preventive care expenses against those of emergency services. It also has long-term benefits such as improved chronic disease management, reduced hospitalizations, and increased productivity. The goal is to demonstrate how investing in accessible healthcare can bring significant economic benefits and improved community health outcomes.

Why Program Evaluation is Crucial for Nonprofit Success

Evaluation can be daunting. The process encompasses practices ranging from simple attendance logs to multi-year, mixed-methodological approaches. At Ivanhoe Development, we strongly believe that a well-developed evaluation plan can be the difference between assumption-based programming and true solidarity work. Let's explore why:

1. Demonstrating Impact:

Program evaluation serves as a powerful mechanism for nonprofits to share the difference they make. By assessing and quantifying outcomes, organizations can provide evidence of their impact, instilling confidence in the community, stakeholders, donors, and internal staff.

2. Improving Program Effectiveness:

The adage "what gets measured gets managed" holds true in the nonprofit sector. Evaluation allows organizations to identify strengths and weaknesses in program implementation. This can help identify strategic adjustments that can enhance overall program effectiveness.

3. Enhancing Accountability:

Nonprofits are entrusted with a profound responsibility to their beneficiaries, donors, and the public. Through program evaluation, organizations establish a framework for accountability. Transparent assessments enable stakeholders to track the efficient use of resources and hold nonprofits accountable to the promises they make.

4. Informing Decision-Making:

Community-informed decision-making is the cornerstone of successful nonprofits. Regular evaluation equips organizations with the insights needed to make decisions about resource allocation, program modifications, and future planning. 

5. Attracting and Retaining Donors:

Donors, whether individuals, governmental bodies, foundations, or corporations, seek assurance that their contributions are making a genuine impact. Program evaluation provides compelling narratives of success. 

6. Fostering Innovation:

Program evaluation can be a catalyst for innovation. By listening to stakeholders and evaluating programs in meaningful ways, surprising information can sometimes come to light. Programs do not always have the exact impact that was intended, and that’s ok! Identifying areas for improvement or adjustment can lead to new approaches, technologies, or partnerships, fostering a culture of innovation.

Comprehensive, mixed method program evaluation is the foundation that elevates nonprofits from good to exceptional. Beyond being a funder reporting requirement, it is a strategic tool that fuels growth, instills confidence, and ensures that nonprofits are not just fulfilling their missions, but doing so in the most impactful and efficient ways possible. Ivanhoe Development staff undergo a process of continued education in evaluation best practices and methods to help your organization work in partnership with the community you serve. 

Money Talks: Why Grant Funders Need to Know Your Nonprofit's Financial Story

“So they need my 990, an audited financial statement, a project budget, a funding history, AND a profit and loss statement??’ 

The amount of financial information requested by potential grantors can often feel overwhelming or perhaps even invasive. It can also feel like a power imbalance, providing detailed information on your organization’s finances is overwhelming and may open an organization to scrutiny or judgment.

There are a lot of forms or policies to unearth and format, dates to check, and numbers to input. So why do grantors ask for all of this information? 

1. Building Trust and Credibility:

Grant funders seek partnerships with organizations they can trust. Transparent financial information serves as a cornerstone in establishing credibility. When potential grantees willingly share comprehensive financial details, it signals a commitment to openness and accountability. This trust is the foundation of a strong, collaborative relationship that can be leveraged into future funding

2. Strategic Decision-Making:

Grant funders are strategic investors. They aim to allocate resources for the greatest impact. Access to detailed financial data equips funders with the insights needed to make informed decisions. Understanding an organization's financial health helps funders assess its capacity to execute and steward proposed projects effectively and sustainably.

3. Ensuring Financial Stability:

Grant funders are not only interested in the immediate impact of their support, but also the long-term sustainability of the initiatives they fund. By scrutinizing financial information, funders can evaluate an organization's financial stability, ensuring that it can weather challenges and continue its mission beyond the grant period.

4. Demonstrating Accountability:

Nonprofit organizations are accountable to their community, and grant funders are a crucial part of this equation. When organizations willingly share financial information, they showcase a commitment to accountability. This transparency assures funders that their resources will be used responsibly and in alignment with the intended goals.

5. Aligning with Funder Priorities:

Grant funders often have specific priorities and goals they aim to address through their philanthropic efforts. Financial information allows funders to assess whether a potential grantee's objectives align with their own. This alignment enhances the likelihood of successful collaboration.

6. Mitigating Risk:

Every investment carries an inherent level of risk. Grant funders aim to minimize this risk by making informed decisions. By reviewing an organization's financial history and practices, funders can identify potential risks and work collaboratively with grantees to implement risk mitigation strategies. 

While it may feel annoying or like overkill, the call for financial transparency from potential grantors is not a mere formality. For a funder, it is a strategic and important step that underlines the shared commitment of both grant funders and nonprofits to create lasting, positive change. Grantors are often faced with hard choices between many deserving, meaningful project or program requests. They must make decisions with limited information. Being able to showcase your organization’s financial literacy and stability can be the key to ensuring that grantors view you as a trusted partner.

One of Ivanhoe Development’s commitments is to challenge existing philanthropic systems to ensure transparent, and barrier-free funding for organizations. We recognize that for many organizations, this level of financial transparency and reporting places a burden on staff. We continuously work with funders to restructure reporting practices and appropriately question the balance between necessary financial transparency and burdensome requirements that do not directly facilitate an organization’s access to funding. This continues to be a work-in-progress for the philanthropic community.