CNC Grant Writing & Proposal Budgets 3 — Questions and Answers
Question 1: What is the primary purpose of a 'needs statement' (or statement of need) in a grant proposal?
- To list the organization's past grants received
- To document the problem or gap the proposed project will address using data (Correct answer)
- To outline the funder's priorities and preferences
- To describe the qualifications of the grant writer
Correct answer: To document the problem or gap the proposed project will address using data
The needs statement uses data and evidence to establish that a significant problem exists which the proposed project will address.
Question 2: Which type of grant is typically awarded to support an organization's general operations rather than a specific project?
- Capacity-building grant
- Capital grant
- General operating support grant (Correct answer)
- Challenge grant
Correct answer: General operating support grant
General operating support grants provide unrestricted or broadly flexible funding for an organization's overall operations and mission.
Question 3: When a funder specifies that indirect costs cannot exceed 15% of direct costs, this is called a:
- Cost-sharing threshold
- Indirect cost cap or ceiling (Correct answer)
- Administrative overhead allowance
- Modified total direct cost base
Correct answer: Indirect cost cap or ceiling
An indirect cost cap is a funder-imposed limit restricting the percentage of indirect costs that can be charged to the grant.
Question 4: What is a 'letter of inquiry' (LOI) in the grant seeking process?
- A formal rejection letter from a funder
- A brief initial submission to gauge funder interest before a full proposal (Correct answer)
- A signed agreement between the grantee and funder
- A financial audit letter required at grant close
Correct answer: A brief initial submission to gauge funder interest before a full proposal
A letter of inquiry is a short, preliminary document sent to a funder to determine if a full proposal invitation is appropriate.
Question 5: In a grant proposal budget, 'fringe benefits' typically include:
- Office supplies and printing costs
- Employer-paid payroll taxes, health insurance, and retirement contributions (Correct answer)
- Travel and mileage reimbursements for staff
- Consultant and subcontractor fees
Correct answer: Employer-paid payroll taxes, health insurance, and retirement contributions
Fringe benefits are the non-wage employment costs paid by the employer on behalf of employees, such as FICA, health insurance, and retirement.
Question 6: Which federal regulation governs cost principles for nonprofit organizations receiving federal awards?
- 2 CFR Part 200 (Uniform Guidance) (Correct answer)
- OMB Circular A-110
- IRS Publication 557
- FAR Part 31
Correct answer: 2 CFR Part 200 (Uniform Guidance)
2 CFR Part 200, known as the Uniform Guidance, consolidates federal regulations for grants management including allowable costs for nonprofits.
Question 7: What distinguishes 'outputs' from 'outcomes' in a grant proposal's program goals?
- Outputs are long-term changes; outcomes are immediate products
- Outputs are the direct products of activities; outcomes are the changes or benefits resulting from those products (Correct answer)
- Outputs measure financial performance; outcomes measure social impact
- Outputs are required by funders; outcomes are optional narrative additions
Correct answer: Outputs are the direct products of activities; outcomes are the changes or benefits resulting from those products
Outputs are the countable products of program activities (e.g., workshops held), while outcomes are the changes in knowledge, behavior, or conditions that result.
CNC Grant Writing & Proposal Budgets 3
What is the primary purpose of a 'needs statement' (or statement of need) in a grant proposal?