 Welcome to the non profit show. We are so glad you're here. It's another episode today and we are so thrilled to have Derek Drear with us. He's here from your part time controller where he serves as the department leader of government funding and he's going to tell us more about that soon. We want to talk to us about federal grant and application insights so stay with us as we dive deep on this very sexy topic with you Derek and I'm looking forward to it. But before we jump into conversation we want to remind all of you who we are we haven't had the opportunity to meet you yet. Good morning or good afternoon to you Julia. Julia Patrick CEO at the American nonprofit Academy and I'm chair ransom your nonprofit nerd CEO of the Raven group and sometimes Julia holds me hostage or I should say ransom as her own nonprofit nerd as her own nonprofit nerd but there's many of this nerdiness to go around and really glad to be here in conversation with you Julia as we have this really deep dive here with Derek. We also want to let you know that we have some amazing presenting sponsors that keep this show going and slowing. So thank you to our besties over at Bloomerang American nonprofit Academy your part time controller nonprofit thought leader fundraising Academy at National University staffing boutique nonprofit nerd and nonprofit tech talk many of these companies have been with us from the very beginning you see your part time controller there that's where Derek is joining us from. Thank you so much to Jennifer Aliva one of the partners there that has been with us from the very beginning of the pandemic and literally bringing us a breaking news. Yeah as we're broadcasting and it was typically on a Friday so thank you Jennifer and to the entire your part time controller team. Hey we've helped or we have produced over 800 episodes thanks to the help of our sponsors and you can scan the QR code right now to download the app and that's here on your smartphone you can do that and we have not left the other platform so you can also find us on podcast as well as streaming broadcast so plenty of places to find the information that we provide here at the nonprofit show all free again thanks to our sponsors. So Derek, we are thrilled to have you again for those of you watching and listening we have Derek Drear with us today he's joining us from Philadelphia if my memory is recalling just like a 22nd. Okay conversation. Again where he serves as the department leader of the government funding at your part time controller welcome to you Derek. Thank you I'm delighted to be with you today I always enjoy this show. Thank you. Okay, Derek you said something that kind of like blew my mind when we were getting going in the green room chatter and that was the very distinct role that you play within YPTC. First of all you are now in 49 states we have one more state to get you into. We do. Yes, we're going to do, but talk to us about what the number of providers YPTC now harnesses and what you do within that whole ecosystem. Yeah, so, interestingly, I was a client of YPTC for many years, a long, long time ago, we won't say how long ago, but when it was a very small company. I managed a nonprofit for 25 years, and YPTC has grown now to the point that it has clients in 49 states, we have 1600 clients, we have over 600 staff members. And to your question, over 300 of those staff members are accountants. And one of their core capacities is helping their clients manage report on and steward grants of every kind including federal grants where you often have that complex single audit that comes at the end. And that's not what I do. I don't have an accounting background. I have a background in art history. And I'm part of a new service. As you noted, our managing partner Jenna Lever announced it here first a couple of months ago we have a new service to help our clients find and apply for federal funding. There's lots out there, but it's complicated so I do that front end work. And then if one of our clients is lucky enough to get an award. We have fresh office successful application last week actually. And then we can pass that off to our staff accountants and they can help our clients manage the award. So it's basically a 360 service now we're helping our clients at the beginning and during and at the end. That is so fantastic and I love that you refer to yourself I had to write it down. Find it and apply for it guy and so I want to know is that what your business card says because I think it should. You know, I started working during the pandemic so I didn't actually get business cards yet but they're they're in production now. I'm going to try and slow it down and add that little tagline. Good. Thank you, Derek. Let's let's dive right in. I'm really excited to have this conversation. Let's start off by if you would share with us. What do you successful applicants look like and again for those of you watching and listening this is really all around the federal application so what's the successful applicant look like they can they can look lots of different ways of course the federal government gave out over 56,000 grants last year totaling over $20 billion and this fiscal year the government has already awarded some $7 billion in just in grants up to $1 million to nonprofits so the feds give away a lot of money to a lot of groups but there really are some characteristics of your classic great applicant and I think the most important one is that you have a hook. There's a compelling story you can tell why your organization. Why your project and why now because ultimately the government gives away money to have a benefit to society right we want to see an impact of some kind maybe you're helping more patients you're serving more clients you're doing something in such a good way that it can be replicated elsewhere they want to lift you up and support you. But again if you can't tell a story of why me why now it's harder to convince the program officers. Another thing that I find is a common characteristic you've existed for a couple of years already so you've got a track record, you want to demonstrate to the feds you know how to manage money and implement programs. The budget is it's kind of a Goldilocks thing it's not going to be too small, but it's probably also not going to be too big. I find the sweet spot for a lot of our clients is between say half a million and then up to 510 20 million in annual budget. Now you can get grants when you're smaller. But if you're too small there's a worry on the side of the federal government you won't have the wherewithal to implement the program and manage the monies. It also helps to be a 501 C3 not a requirement, but just numerically most of the grants out there for 501 C3 so if you're a 501 C6 you manage an association for example your choices are a little more limited. And of course, I was going to say I love the Goldilocks analogy you know it's like this might be too small this one might be too large but right here in the middle. That's that's just right. That's where that's where most of the grants are. It's absolutely true. And, of course, there are exceptions to all of these rules, but we're not here to talk about exceptions. One of the main things to keep in mind is as a client you are not in a rush, because the federal government provides wonderful, wonderful support, but they don't do it quickly. So if you're in a rush, you're not looking to the federal government. It's during the pandemic with all kinds of emergency programs but it's not the case now. And finally, we don't want any red flags if you've got chronic series of deficits if you have a leadership transition in progress and let's say the executive director just left and the search hasn't even begun yet for your successor. It's going to be hard to convince a federal agency that they should trust you with money right now so you want to think about the right timing for your grant as well. That timing is important. Well, let's talk about even more determination of if we're ready right so you had mentioned, you know, we definitely want to track record we want to have some audits behind us. What are some other determinants of readiness. And track record, it's not just a question of oh we've existed for a minimum of three years it's not about the time per se it's about it, but there's a two, two kinds of track records one is a track record for creating and implementing programs that have impact. Again, whether you're feeding the homeless creating exhibitions doing medical research, whatever you do you do it well, and your track record shows that you also have an audit track record for some agencies. You can't even apply unless you fill in the numbers on certain lines of your audit or your 990 tax forms that go back three years. So if you were just created, and you don't have three years of 990s or audits yet. Best to wait, build that track record and then come back. But another important thing is your staff has the where with all to implement a program so the federal government feels like we can trust this organization they're going to manage the money well, they're going to do what they say they do. And ultimately they're going to have a benefit to society that's what the government wants. So if you've got all of that where with all and that track record. It's time for you to think about applying. Let me ask you this question this question popped into my head. So many of our nonprofits, you know, 1.8 million nonprofits that have their letters of determination from the IRS across this country. But there's a growing number of small nonprofits and sometimes growing nonprofits that are fiscally sponsored. How does that fit into the mix is that somebody that would be a candidate for this or really should they be out from under that type of stewardship. They can be but it's definitely a hurdle you'll need to clear typically organizations that have a fiscal sponsor have that because they're very very small. Your annual budget is $50,000 or $75,000 or even $100,000. It probably doesn't make sense for you to seek to say a $200,000 grant from the federal government. They're not going to trust that you'll be able to implement that properly, but that doesn't mean you shouldn't apply. There are many programs at the federal level for smaller grants with streamlined applications and there's no reason small organizations that are doing good work shouldn't apply just because they have fiscal sponsor. Wow. That's sure. Don't you think that's a fascinating thing to think about. It is and that's that's a great question. I love that you asked that, you know, I've written a few in my career. I prefer not to if I'm being completely honest right. It is it is a project in and of itself right like it's, I think it's cumbersome. There's a lot of eyes to dot there's a lot of T's to cross. There's a lot of moving pieces, you know when it comes to this so so making sure that we we can, you know, adhere to the requirements first of all and then what you said Derek right like the program staff as well like the execution of this is equally as important as what we put down on paper, or digital That's correct. My accountant colleagues are fond of telling organizations that are celebrating because they just got a grant award and they're thinking yay all our work is over now actually the hard work is just beginning. Right. That's right. You need to implement program you said you would and you're going to need to track everything you do very very carefully. You want to be ready at the beginning to submit those interim and final narrative and financial reports if you're going to have an audit. I want to make sure you know in advance what you'll need to report on. That's right. And would you mind. Yeah, would you mind telling us that threshold for the single file audit. It's $750,000 it gets expended in one fiscal year. And as always there are some exceptions to that, but there are a lot of nonprofits that either have several federal grants or they have a large federal grant, and they hit that threshold. The first file the single audit. Yeah, you were saying Jared you don't like writing grants I love writing grants, I love sitting down and writing, but I can't stand the thought of preparing a single audit so I'm glad I could hand that part off to my colleagues. Well, then you're in good company there. Yeah, absolutely. Okay, so give us the skinny on grants dot com dot gov how do we harness the power of this platform and again grants dot gov what It's a wonderful website. It's the government's official website where all 26 federal agencies that give grants and mounts their grants. It's updated daily. I've, of course I visited every day that's where I live. And as of this morning I can tell you, they were 2756 active grants listed on grants dot gov. It's actually a wonderful thing and a horrible thing all at once, because it's wonderful that there's so much there there's something for almost anyone. Yeah, but it's also bewildering. And I hear so many complaints about grants dot gov and I think one of the problems people have is that it's just so much information there they don't know where to start. I was at a conference last week and I was hearing people complaining about how you, one person said oh you need three different passwords for grants dot gov know you don't. There are a lot of misconceptions about it. But what you want to do is take some time and browse over to grants dot gov. You don't need to have an account to browse. You don't. But now when you open the website, you will get a little dialogue box will pop up that will say you need an account, but you don't actually have to log in to browse so get started. And you're going to find all kinds of ways to narrow your search you can narrow by agency. Maybe I only want to hear about Department of State grants or the Institute of Museum and Library Services. You can narrow by type of recipient. So I can say hey I'm a 501c6 not a 501c3 what do you have for me. There are also ways to include or exclude actual posted grants, as opposed to forecasted grants so let's wait until they get posted right let's just take those off the top right away. When you start to use all of these different ways of narrowing down your search, then the most powerful one. It's kind of the most obvious there's a keyword search field, you can enter any keywords you like. So no matter what your organization does you're serving the homeless, you're supporting journalism, medical research, millions of possibilities and millions of nonprofits right put in the keywords you care about most and you're going to zero in very quickly. And that is when you want to sign up for grants.com account because if you've gone to the trouble to set up a complicated search. You can save it when you have an account and then you're going to hear about you'll be able to log in easily these are dynamic searches so it might change from day to day or week to week you'll see three grants one time and five the next and to the next. You can always figure out what's newest and learn about it and just zero in right away. Another great advantage to getting that account on grants.gov is you can sign up for updates for grants that interest you sometimes the deadlines change. Sometimes the rules change. Sometimes the amounts change and you don't want to be spending three four weeks working on your narrative and then learn whoops, the deadline got moved up the last week. Now I can submit. So, again, the government gets a bad rap for having a complicated website but I think probably the worst thing about it is also the best thing about it they're just so many grants available on it so creates your account. It takes a couple of steps, but it's actually very simple. Derek as you talk about this it reminds me of the cheesecake factory menu right where there's so many choices. I know I'm curious, would you recommend you're in that daily and I get that because you're the find it and apply for a guy. For those of us, yeah that we're managing and I know you're managing other things as well. How often do you recommend we check the portal the grants.gov portal is this a weekly occurrence by monthly. What's your recommendation there. So ideally, you're going to set up that account, and you're going to set up some searches and request updates on on the couple of grants that interest you most. Most organizations are not going to apply for dozens and dozens of grants you're probably two, three, maybe even four or five grants but for some it's just one grant, they want to apply for and these tend to get renewed annually. Some grants are announced at the same time each year by the agency for, for example, Institute Museum and Library Services, almost all its deadlines are November 15. The State Department has deadlines every week in issues hundreds of grants and Health and Human Services has thousands of grants they're deadlines every day. You don't want to go in there daily unless you're me. So if you set up that account and get those updates, it's kind of a set it and forget it thing unless you're, you might be a development director and then I would expect you're in there more often poking around to see if something has been announced and another tip I would have something again it's easy and free. If there's a federal agency that seems like a likely funder to you. Go to their website and sign up to get their newsletters their email blasts whatever way they have of keeping in touch again 26 federal agencies. I can tell you from experience 25 of them will send out email newsletters to tell you what's going on and I get dozens of email names letters every day. Small business administration, I'm wagging a finger at you for not having an email newsletter, serve your public, but the rest of them do a great job. And then you don't need to go to grants.co constantly, but don't fear it. Yeah, ironically the SBA is our guest tomorrow so we'll make sure to tell them. They're not, they're not direct. I don't expect them to have a newsletter by the end of the week, or maybe they already do and I just haven't checked recently. I love it. They were the one holdout recently. I love it. Yeah, well, tell us about the top dos and don'ts when it comes to the grant applications. What are the things that we need to consider and what are the things that we need to like make sure again back to those dotting our eyes and crossing our T's. What is the list of these. Yeah, I'm going to start with the don'ts because it's always best to get the negatives out of the way first and a couple of those have to do with the timing of your work. The first is, don't wait to register. When you're going to apply for a grant, it's not enough to be registered with grants dot gov. You're actually going to start with organizing. Excuse me by registering your organization with Sam dot gov, the system for award management. So your organization registers with Sam dot gov Sam dot gov has introduced a new process called validation. They will validate that the address you type in is in fact your physical address. This can take a few minutes. If you're lucky. It can also take two weeks. The organizations that got founded they used the address say of their law firm or their fiscal sponsor but now they're located at their own building somewhere else. That's not going to match up on the federal side. So that can take a long time so register well in advance never leave it to the last minute. When your organization is set with Sam dot gov you can sign up as an individual for grants dot gov. Do that as soon as you're starting to think about grants. And then when you find a grant you think is a good one. Don't wait to start your application. They can literally take three to four weeks of time, very intensive time as Jared said you have to dot the eyes and cross the T's. Even if you are super organized. You may be relying on colleagues or partners outside your organization for other bits of information maybe you collaborated with a local feeder or local homeless shelter you need some numbers from them. Well don't call them at 11pm the day the grant is due reach out immediately start working on this stuff now. Don't wait to submit once your application is done many of these grants are due in midnight on a given day. What if your website collapses what if you lose internet or lose power or any other thing happens well the federal government is not going to give you an extension. So, set yourself a deadline that's a couple days in advance and then you have that buffer time that's what I always do and I've never regretted it. I love the time Derek and I also would tell my team, the buffer time, but I didn't tell him it was buffer I was like this is the deadline, right. I do, I do that with my clients as well and I, and now the secret sale is probably some of them. It's important to do it benefits everybody in the end. Another don't don't submit things the agency didn't ask for if they ask you for a narrative and a budget and a staff list and nothing else. Don't upload your recent annual report don't decide to upload a summary of your strategic plan, give them only what they want. Otherwise you might get rejected, and the converse is also true if they ask for something. Don't think to yourself that that's optional, give them exactly what they want. Don't request monies to support activities, the federal government won't allow. This is a big no no it happens all the time. A lot of agencies make it clear for example that they won't support food and meals in most circumstances and certainly not alcohol at those meals. We had a client once, they had a wonderful program where they had decided to invite a Supreme Court justice. And the justice gave a wonderful talk everyone said it was a great program and then they took the justice to dinner and the justice ordered a glass of wine. Well nothing wrong with that right except they sent the bill for that to the federal government and that case almost went to the Supreme Court itself. Read the fine print carefully. If the government says they won't pay for it. Don't ask for it. Don't decide to be a maverick and do things a different way do it exactly the way they want. They'll go to the dues. The government asks questions, and they will often ask a very specific questions and they'll usually tell you how they're going to evaluate the answers. Make sure you have answered all the questions thoroughly, clearly, and thoroughly do reach out to the program officer I often hear from clients I'm scared to talk to someone at the government or I don't want to call the government. Program officers at every agencies are there to help you and make your job easier. You can run an idea by them and they might green light it or they might tell you it's not going to work. Go to them with questions and there's a wonderful add on effect. They're going to make notes about the fact that you called to ask questions and when they come to the review time a few months later they'll say, Oh, why yes, Derek was in touch with us three times and and we had a chance to weigh in on this project as it developed and we really like it. Yeah. So do you recommend Derek that we always find an opportunity to reach out to the contact. I do. Good. I do there. They are paid to help you and they actually all enjoy their jobs a lot they love talking with their constituents, and they can give you insights on any specific initiative you might be interested in applying to and those are always very very useful. We already talked about how you're going to sign up for updates on grants.com that's on my do list as well but I'll say it again. As your writing proceeds do have someone else proofread everything. Your eyes can just go cross-eyed after a short time and if you've been working in a document for hours and hours, they're bound to be mistakes in there. You might have used jargon that you understand but no one else does. Ask someone with fresh eyes to have a look at it. Ask that someone to make sure that your budget and your narrative tie out. How many times have I seen people say in one place that they're asking for $200,000 but in the other talk about 250. Which is it? Right. This should tie out perfectly. You can verify that you're actually eligible before you apply. There are a lot of grants that get announced and they say eligible applicants include 501C3s and others. Don't assume other is an open category that anybody can just jump into. You need to look at the fine print. The answer might be restricted literally to a specific organization or a specific type. So read the fine print but especially make sure you are eligible to apply. And then good luck doing your writing. It's worth all of this trouble and effort because you have the chance to bring in a big piece of the enormous federal pie to lift up your programs and make your nonprofit stronger. You know I have loved so many of the things that you've said. I think that they're natural. They're logical. In some ways a lot of what you've said actually gives me greater confidence about working with the federal government and that these are you know prescribed processes that are open and methodically managed. And so Derek this has really been a cool opportunity for us to really get a new look at what this work can be like for us. Department leader government funding. Wow that's just a title that really we're thrilled it got announced on the nonprofit show of course but we need to have more discussions about this because there's anything there's just such a mystery around this and fear. There's a lot of mystery. There's a lot of finer points. I didn't want to get lost in the weeds today but the message overall is it really is worth the trouble for most applicants. Well we'll have you back on Derek and that topic will be lost in the weeds with federal applications. I'll be back in time. Yeah thank you so very much and thank you for all of you that joined Julia Patrick and myself, Jared ransom today really glad to have you here. Federal federal applications is definitely something that you know is kind of this you know, mystique unicorn, if you will out out somewhere in the jungle but we need to know a little bit more about it and so glad that you're here to share that with us. We want to thank our presenting sponsors thank you so very much to our friends at Bloomerang American nonprofit Academy, your part time controller where Derek drear joined us from nonprofit thought leader fundraising Academy at National University, staffing boutique nonprofit nerd and nonprofit tech talk. Please check out these companies they're here to help you. They're really good people their mission is your mission and they want to help you do more good. Absolutely. You know, it's a really amazing time for the nonprofit sector and we are so thrilled to be in partnership with so many folks helping to let all of us navigate the system Derek this has been a great conversation and I agree. We need to keep moving forward on this because this is where the rubber meets the road for so many of our organization so as we like to have me and thanks for everything you do. Oh my gosh, Derek, it's been a lot of fun really I learned a lot and you really got those wheels turning. I know we're going to have even more questions for you. As we end every episode we like to remind ourselves our viewers are nonprofits in search of grants to stay well so you can do well. Thank you everybody and we'll see you back here tomorrow.