On CharityChannel ("Figuring Out How Much to Ask For," June 18, 2008), Jane Hexter recommends that you:

1. Look at the grantmaker's average grant size.
2. Determine whether that amount will be enough for what you want to accomplish with the grant.
3. Ask the program officer whether the board tends to give less than the amounts requested.

Once you have that information, you should request an amount that is adequate for the purpose of the grant but is neither penny-pinching nor extravagant. (Full article can be accessed only by CharityChannel subscribers.)

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As of this month, you can now search Grants.gov using Google. In announcing the change, Local/State Funding Report (July 28, 2008) pointed out how this will ease access to the Grants.gov help files, FAQs, and all information text. They also announced Grants.gov's new RSS feed, which allows you to get automatic updates of important announcements. Finally, they noted that by year end, all 26 federal grantmaking agencies will streamline the proposal process by accepting applications in portable document format (PDF), including the new 9.0 version of Adobe Acrobat.

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How can you fire up grantmakers and donors to support your unexciting but essential operating costs? By giving them a vivid picture of how those humdrum expenses actually impact people's lives, says Mary Ellen Collins, in her article, "Brilliant!" (Advancing Philanthropy, May/June 2008). For example, when a prospective donor told a hospital's fundraiser that he didn't want to pay for light bulbs, the fundraiser responded, "'Fine. Then the doctors and nurses will operate in the dark.'" Collins says proposals for grants to cover operating costs should

• have a compelling message;
• be simple and direct;
• spell out the connection between paying your staff and achieving service or program goals;
• showcase support from other sources; and
• explain how your programs will provide a good return on the investment provided by the grant.

(The article's not available online, but Advancing Philanthropy accepts bulk orders for reprints.)

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The June 20th issue of the Chronicle of Higher Education describes how the National Institutes of Health is proposing to change its peer review process for grant requests. The most important change would be a handsome increase in compensation to people who've served on review committees over the past decade: they may receive $250,000 over six years. Other projected changes: a cut in the maximum length of grant applications from 25 pages to 12; and--to benefit younger scientists--a new $250-million grant category for transformative ideas. [Editor's note: The linked article previews the planned changes, but as of mid-August, the NIH proposals have not been finalized.]

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Every grant proposal professional must at some point respond to colleagues, board members, or volunteers who think a federal grant represents "free money"--that to get tens of thousands, or even millions, of dollars for your cause, all you have to do is send in a proposal. This is an illusion.

There's no such thing as "free federal money." Someone must do the work to assemble the proposal. Once you get the grant, you must do what you said you would do when you asked for the money in the first place. And unless you're fully prepared to meet your responsibilities as a grantee, the grant can become a tail that wags your agency's administration, taking time and energy away from more critical activities. But the myth of "free money" persists, and sooner or later you'll have to address it.

Federal grants generally support activities carried out by organizations for the benefit of society. These activities are of such high priority to our society that our government commits billions of tax dollars to grant-funded services, research, construction, and education projects. But such activities are not to be undertaken lightly.

To begin with: You have to spend money to bring in money. (This is true whether it's federal or private money.) But the up-front investment is rarely reimbursed by the grant.

A federal proposal with a 25-page single-spaced narrative plus budget, budget narrative, forms, logic models, and other required attachments may easily take 100 hours or more to complete. Depending on the pay-rate of the person preparing the proposal (including benefits), the base cost of preparing the proposal can be anywhere from $4,000 to $6,000, or more. Do the math for your own organization.

Many federal proposals also involve working with community partners, stakeholder groups, clients, evaluators, and/or coalitions. Do you pay cash for these community partners? Generally not, but if five people attend five four-hour meetings, that's another 100 hours of community time. While this cost may not be in cash, an additional $4,000 to $6,000, or more, is being invested by those who attend the planning meetings.

So ask yourself this question: Is going for the "free money" worth $8,000 to $15,000 to your agency and community? Is this the best way to use your staff and community resources? If it is, you're on the right track, but clearly it's not a free ride.

There are other costs to consider.

If your proposal is successful (and there are no guarantees your investment will pay off), you will then be responsible not only for meeting the specific obligations for which you've been funded but also for complying with a broad set of operating requirements that govern administration, reporting, record keeping, and participation in federal activities.

Rarely do federal grants provide funds for organizations to do what they are already doing. The rule, for most federal programs, is "supplement, not supplant." In other words, you can expand a program, extend a program, add more services to a program, or start a new program, but you cannot shift the costs for an existing program to a federal grant.

This means you will have new work to do--new work that will balance the new money. In addition, you will have administrative tasks that may or may not be underwritten. These may include:

• recruiting and hiring staff;
• training present staff;
• additional supervision;
• additional bookkeeping and record keeping;
• complying with federal guidelines; and
• collection of data for evaluations.

Some of these costs should be included in your grant budget, but the tasks will place extra burdens on your administrative staff. And while some grants do include "indirect" support, you will not be directly reimbursed for the costs associated with applying and negotiating for this support.

In any case, meeting all the administrative requirements that are associated with a federal grant can be a costly proposition.

Bottom line: If a federal grant will help you achieve one of your agency's top priorities, go for it. Do the planning, prepare the proposal, engage the community, and go after the grant. It could be a great investment. But don't let anyone think it's "free money."

Chuck Putney has been a consultant trainer for The Grantsmanship Center for 20 years. He has worked extensively on successful federal grant proposals funded by the Departments of Health and Human Services, Education, Labor and Housing, and Urban Development.

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