A nonprofit may find a funding opportunity aligned with its field of work and immediately begin drafting a proposal and preparing a budget. Days later, it discovers that the grant requires a contribution it cannot provide, that funds will arrive after the program is due to start, or that delivery will strain existing services.
The organization therefore needs a decision before preparing a detailed application: Does this opportunity justify investing time and money, and what conditions must be resolved before proceeding?
Once an opportunity has been identified and its information verified, this review determines the resources allocated to the application, responsibilities, and limits on commitments. The intended result is a clear decision the team can implement and revisit.
1. Separate Applying From Accepting Funding
Approval to prepare an application means allocating resources to pursue funding. Accepting funding means agreeing to specific terms and commitments that may differ from the initial information.
| Decision | Basis for Approval |
|---|---|
| Prepare and submit an application | Opportunity suitability, eligibility, whether pursuing it is worthwhile, and the preparation budget |
| Accept funding | The final agreement, amount, costs, disbursement schedule, and obligations |
| Launch a crowdfunding campaign | Project readiness, communication and collection arrangements, and the terms and promises communicated to the public |
The organization may approve an application, then receive an offer for a lower amount or with new conditions. It must reassess that offer before accepting it.
The application form itself also needs review: it may contain declarations or commitments requiring approval under the organization’s delegated authority. Approval to apply does not give the team unrestricted authority to accept subsequent conditions.
2. Resolve Essential Conditions Before Comparing Opportunities
Begin with questions that could prevent an application altogether:
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Is the organization eligible under the opportunity’s requirements?
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Are the activity and geographic scope permitted?
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Can application requirements be met by the deadline?
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Do any conditions conflict with applicable regulations or organizational policies?
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Does the project address a genuine need and serve the mission?
Record eligibility as confirmed, not met, or requiring clarification. A strong project or a large funding amount cannot compensate for an unmet mandatory condition.
A capacity gap requires a different assessment. The organization may be able to recruit an employee or introduce a system before implementation, provided the cost, funding source, and timeline are clear. “We will prepare after approval” is insufficient without a realistic plan.
For a new project, review the need it addresses, its benefits, and its effect on existing priorities. Being outside the current plan does not automatically make it unsuitable; it may justify an approved plan revision. Equally, adapting an existing project is inappropriate if it weakens its benefits or changes its purpose merely to attract funding.
3. Build a Complete Financial Picture
Before approving the application effort, request an estimate that separates five elements:
| Element | Required Question |
|---|---|
| Application preparation cost | What staff time and expenditure will we allocate before knowing the outcome? |
| Full delivery cost | What will activities, management, monitoring, and other obligations cost? |
| Funding coverage | Which costs can the funding cover, and within what limits? |
| Organizational contribution | What contribution is required, and which costs remain uncovered? |
| Cash requirement | Which payments must be made before funding installments arrive? |
Project funding may cover salaries, administration, technology, and evaluation within the approved budget. Review eligible costs and conditions before assuming these expenses must be borne by the organization.
Allocate shared costs using an appropriate method, and avoid charging the same cost to more than one budget item or funding source.
Opportunity cost helps compare uses of staff time: what work will be delayed if the team prepares this application? It should not automatically be added to cash expenditure on top of staff time already included in the cost estimate.
4. Test Capacity, Timing, and Required Results
Program, finance, and operations staff should review what will happen if the application succeeds:
Will the team be available? Can procurement be completed on time? Are documentation and monitoring systems in place? Will payment dates allow the organization to meet its obligations?
Proposed results must also match the organization’s ability to achieve and measure them. Beneficiary numbers indicate reach, but do not by themselves demonstrate improved circumstances. Comparing skills before and after training may show a change, but does not by itself establish that the program caused every change observed.
Define what will be measured, how, and at what cost, according to the opportunity’s requirements. If impact evaluation requirements are unclear, seek clarification before committing.
Review the project’s conclusion as well: can the intervention end responsibly, or will it leave a service, contracts, or equipment requiring continued funding? Not every project must continue, but closure, transition, or subsequent operating costs should be clear.
5. Use an Example That Leads to a Decision
Suppose a nonprofit is considering a grant for a one-year vocational training program. The following figures are hypothetical and illustrative:
| Item | Amount |
|---|---|
| Full project cost | SAR 1,000,000 |
| Grant the organization intends to request | SAR 900,000 |
| Required organizational contribution: 10% of total project cost | SAR 100,000 |
| Application preparation cost, outside the project budget | SAR 15,000 |
The budget assumes that the SAR 1 million includes delivery, management, monitoring, and auditing, and that these items are eligible under the opportunity’s conditions.
The organization therefore needs SAR 100,000 for its project contribution and SAR 15,000 to prepare the application. Preparation costs will be incurred even if the grant is not awarded.
However, the cash flow review shows that the first installment will arrive after implementation begins, creating a maximum temporary cash gap of SAR 120,000.
This gap is not an additional expense that should automatically be added to the contribution. It is a cash requirement arising from the timing of receipts and payments. Finance should review the cash needed each month and whether available funds can cover it without harming existing services.
Suppose the organization can provide its contribution and preparation budget, but cannot adequately cover the temporary gap. Its decision would be:
Seek clarification on whether the first installment can be paid before activities begin or the implementation schedule can be adjusted. Defer approval of detailed application preparation until cash gap coverage is resolved.
If a suitable arrangement is confirmed, preparation can be approved with a budget capped at SAR 15,000, a named owner, and a review deadline before submission. If the issue cannot be resolved within the available time, the organization stops pursuing the application.
The assessment has produced an action, conditions, and a spending limit, rather than simply describing the opportunity as “good.”
6. Add Questions Specific to Each Funding Approach
All support opportunities require an assessment of purpose, cost, capacity, timing, and commitments. Add questions appropriate to how the resource will be secured.
Institutional Grants
Review eligibility, application assessment procedures, required contributions, eligible costs, reporting, and conditions governing amendments and disbursement.
Assess the strength of the application using the organization’s experience, evidence of results, and alignment with the funder’s priorities. Do not assign an unsupported probability of success or treat a previous relationship as a guarantee of approval.
Support From a Major Individual Donor or Company
Review actual interest, the proposed form of support, conditions of use, and any communication or sponsorship obligations.
An individual’s or company’s interest is not a funding commitment. Corporate support may take the form of a donation, sponsorship, or in-kind contribution. The agreement’s nature determines the obligations, rather than the provider’s identity alone.
A Crowdfunding Campaign
Review the organization’s ability to reach a suitable audience, readiness of content and follow-up, campaign costs, platform and payment fees, and when proceeds become available.
Before launching, define the minimum amount needed for delivery and what will happen if proceeds fall short, exceed the target, or the project becomes impossible. These arrangements must reflect applicable regulations, platform terms, and publicly stated commitments.
Review donor and beneficiary data protection and the accuracy of campaign messages and images. Project delivery remains the responsibility of the party identified in the arrangements; the technology platform should not be assumed to implement it.
7. Approve a Decision With an Owner and Conditions
Summarize the review in a single decision record:
| Item | What Should Be Recorded |
|---|---|
| Purpose | The need and intended result the funding will support |
| Essential conditions | What is confirmed and what requires clarification |
| Financial position | Preparation cost, organizational contribution, uncovered costs, and cash requirements |
| Capacity | What is available, what must be provided, its cost, and timing |
| Main risks | Their effects and measures to address them |
| Decision | Apply, seek information, prepare for a later cycle, or decline |
| Approval limits | Preparation budget and conditions for continuing |
| Owner and deadline | Who acts, who approves, and when the outcome is reviewed |
Resource development prepares the record, program staff verify delivery and results, and finance reviews the budget and liquidity. The authorized decision-maker approves the decision according to the organization’s governance arrangements.
Not every opportunity needs a committee. The depth of review should reflect the commitment’s size, complexity, and risks. A brief meeting may be enough to approve a prepared assessment, while other agreements require deeper review.
8. Define When to Reassess and When to Stop
Refer the decision for renewed approval if the funding amount, project scope, required contribution, payment schedule, or essential obligations change.
Stop preparation if an unachievable requirement emerges, costs exceed approved limits, or a material issue remains unresolved by the decision deadline. Money or time already spent does not justify continuing an application that is no longer worthwhile.
When a funding offer arrives, review the final agreement, budget, and disbursement terms before accepting it. Approval to pursue funding remains separate from approval of the final commitment.
A sound application decision explains what the organization will invest, why, and under which conditions. It protects staff time, prevents an attractive opportunity from becoming an under-resourced commitment, and helps the nonprofit pursue funding it can use to deliver meaningful results.ر
