The RFP will define whether the program and the request must cover one or more years. Most foundations leave it open to the grant seeker whether to apply for one or more years of funding, but generally do not make grants longer than three years. Multiyear projects have their pluses and minuses. First, on the plus side, a project that is funded for three years is pretty much assured of continuation funding at the level it really needs to prove itself.
The only instance in which the grantor will take away second and third year funds is if the grantee does not comply with the grant agreement. Before that happens, however, the grantee is likely to receive a warning and a set of goals it must achieve prior to being given year-two funding.
The negative side of multiyear requests is that it's difficult to plan anything three years in advance, whether for programming or budget. Granting agencies understand this, however, and provide some latitude in the level of detail you must provide for second-and third-year budgets and details of the project.
In planning a three-year budget, you will have to accomplish two competing objectives. You must decrease grant funds over each of the years, and at the same time, increase costs (such as salaries) that are likely to go up each year. Here is a sample multiyear budget that Maggie prepared for one of her clients:
In Maggie's multiyear-budget example, the organization planned to receive grants totaling $80,000 in year one to leverage (qualify for) a state money match of $80,000. In year two, it had to raise $120,000, and in year three, $80,000. Granting agencies are inclined to view grants that leverage other donations favorably.