Grants play a vital role in nonprofit funding, but not all grants are worth pursuing simply because you fit the criteria. With limited time and often capacity, organizations must evaluate which opportunities offer the greatest grant ROI—meaning the return on investment (ROI) compared to the cost of securing and managing the grant. Understanding the actual costs and benefits of each grant opportunity helps organizations focus their efforts on funding sources that advance their mission, without wasting valuable time and resources. By assessing grant ROI upfront, an organization can save time, improve outcomes, and build stronger long-term partnerships with funders. Ultimately, it allows attention to be dedicated to the most strategic opportunities.
Grant ROI measures the overall value of a funding opportunity compared to the cost of securing and managing it. Unlike a simple funding total, ROI takes into account the full picture, including the time, money, and effort required before and after the award. While a formula like value of the grant – total costs won’t give you a precise numerical ROI in every case, it offers a helpful framework to compare opportunities. This is particularly important when evaluating the value of the grant against your organizational goals and budget; a grant that requires almost all the resources it provides to fulfill it may not actually yield any ROI.
Some grants offer intangible benefits that boost long-term impact. These might include:
- Enhancing your organization’s reputation or credibility,
- Attracting future funders by aligning with a prestigious name,
- Funding a pilot project that can later be scaled or replicated,
- Allowing entry into new sectors or geographic areas,
- Building relationships with key government or foundation stakeholders.
Including strategic value in your ROI evaluation ensures you are not overlooking opportunities that could shape your future funding landscape.
Evaluating Grant ROI: Understanding True Costs and Value
The first step in evaluating grant ROI is estimating the true cost of applying. This includes calculating the internal and external costs of pursuing the grant, such as:
- Staff time for research, drafting, internal reviews, data collection, budget development,
- Consultant fees,
- Leadership involvement.
These costs should be estimated in hours and translated into a dollar amount, especially when assessing multiple opportunities.
Next, consider post-award costs. Being awarded the grant is only the beginning. Organizations must review all potential related costs, including required reporting and evaluation, audits, ongoing communication, administrative oversight, and any cost-sharing or matching requirements. Some grants, particularly government contracts, may also require upfront spending with delayed reimbursement, which can cause cash flow challenges.
Once costs are clear, assess the total value of the opportunity. Review:
- The total amount awarded and its payment schedule,
- The length of the grant period,
- How well it aligns with existing programs,
- The possibility for renewal,
- Connections to other funders or sectors.
If the grant supports a program already in operation with infrastructure in place, it likely has a higher ROI than one that requires building new systems or staff capacity from scratch.
Once costs and benefits are clear, organizations can create a scoring system to compare and rank opportunities. This system might include measures such as total funding potential, strategic alignment, application burden, and opportunity for future growth. A visual matrix or ROI calculator can help clarify which grants are worth pursuing and which might be better left behind. Over time, these evaluations can reveal useful strategies on which funders or grant types consistently provide high returns.
Building a Smarter Grant Evaluation Process for Mission Success
To make this process repeatable, many nonprofits create internal tools to streamline evaluation. These might include:
- A grant ROI calculator in Excel or Google Sheets,
- A checklist to score qualitative factors,
- Decision-making standards that include input from development staff, leadership, and the Board.
These tools help ensure shared understanding and maximize the use of staff time.
Even though evaluating ROI is important, it’s equally important to remember that not every low-dollar or low-ROI grant should be automatically dismissed. Some opportunities are worth the effort for strategic reasons. These include:
- Pilot funding to test a new idea,
- Seed money that builds early momentum,
- Small local grants that increase visibility,
- New partnerships that have long-term potential.
In these cases, the value lies in relationships, learning, or future positioning—not just immediate funding. Organizations should be clear about these goals when pursuing such opportunities and revisit the investment if the long-term benefits don’t materialize.
Prioritize Grant Opportunities That Deliver Real Impact
Uncovering the ROI of each grant opportunity before you apply is one of the most powerful ways to align funding with your nonprofit’s mission and capacity. By carefully evaluating the costs, benefits, and strategic value of each opportunity, your organization can focus its energy where it will have the greatest impact. Instead of chasing every dollar, prioritize the grants that offer the strongest returns—both financially and strategically—so you can build sustainable, mission-driven growth for the future.
Smart, intentional grant decisions today create a stronger foundation for the success and impact you aim to achieve tomorrow.
At Soukup Strategic Solutions, our team of grant professionals are ready to help your nonprofit navigate the grant process with confidence—from identifying high-ROI opportunities to crafting compelling applications. Contact us for a free consultation and learn how we can support your funding success.
