As the recession dampens giving from private sources and local governments, more charities are looking to the federal stimulus package as a possible source of desperately needed support. But before sticking their hands in the federal cookie jar, grass-roots group should make sure they are not reaching for more than they can chew, writes Ken Goldstein on his Nonprofit Consultant Blog.

Mr. Goldstein urges charities to weigh not only the short-term but the long-term impact on their revenue, and whether they are big enough to handle the project they propose.

“Most of these stimulus programs are not designed for grass-roots organizations; they pretty much require large structures, with already large budgets, and the capacity to take on new projects without much additional overhead,” he write. “Seriously, if you have an annual budget of only $500,000 you should not be looking at a grant for $300,000/year for only two years, and with only 5 percent allowed for administration.”

That’s not to discourage ambitious groups from getting a share of the federal money, he writes. Some charities, he suggests, might enter into subcontractor roles with larger groups, allowing them to perform work and keep staff members on the job without becoming ensnared in federal red tape.

Is your organization applying for federal stimulus money? What sorts of things did you consider before making that decision? Click on the “comments” link below to share your thoughts.