Understanding FTE: The Grant Application Question That Stumps Many Nonprofits

You're moving through a grant application and come across a seemingly simple question:

“How many FTEs does your organization have?”

You pause.

Do they mean employees? Staff members? Volunteers? Part-time positions?

If you've ever paused before answering this question, you're not alone.

As a nonprofit consultant, I see this all the time. FTE is one of the most requested pieces of information in grant applications, yet it is often misunderstood.

The good news? It is much simpler than it sounds.

What is FTE?

FTE stands for Full Time Equivalent.

Simply put, it is a way to measure your organization's staffing capacity.

Instead of counting people, FTE converts employees’ work hours into the equivalent number of Full-Time employees.

FTE measures hours worked, not the number of people on staff.

Many nonprofit leaders wonder whether volunteers count. In most cases, volunteers are not included in FTE calculations unless the funder specifically requests volunteer FTE. Standard FTE calculations typically include paid employees only.

So, how do you answer the question?

Think about all the hours your employees work in a typical week.

Then ask yourself:

If those hours were divided into full-time positions, how many employees would that equal?

Here is a simple example.

Let's say your organization has:

• 1 Executive Director working 40 hours per week

• 1 Program Manager working 40 hours per week

• 1 Administrative Assistant working 20 hours per week

Your FTE would be:

• Executive Director = 1.0 FTE

• Program Manager = 1.0 FTE

• Administrative Assistant = 0.5 FTE

Total = 2.5 FTE

Although three people work for your organization, you have 2.5 FTE.

One important note: Always check the grant instructions to see if the funder defines full-time as a specific number of hours worked (35 or 37.5 hours per week instead of 40). If the funder does not specify Full-Time number of hours, use your organization’s definition of Full-Time when making the calculations.

Why do funders ask?

This question is not simply about curiosity. Funders use FTE to better understand the size, staffing capacity, and sustainability of your organization. It helps them assess whether you have the personnel and organizational infrastructure needed to successfully implement the proposed project.

They may be asking:

• Do you have enough staff to support this work?

• Who will manage the program?

• Who will oversee reporting requirements?

• Can your current team absorb additional responsibilities?

• Will additional staff need to be hired?

• How large is your organization compared to similar nonprofits?

• Can these positions be sustained after the grant ends?

Funders are not simply investing in programs. They are investing in your organization's ability to successfully deliver those programs.

Why is FTE important?

FTE helps tell the story of your organization. Funders often use FTE as a benchmark to understand organizational size, efficiency, sustainability, and capacity. It helps them compare organizations on a level playing field, regardless of how many full-time or part-time employees they have.

Two organizations may both serve 500 individuals each year, but one may do so with 3 FTE while another has 15 FTE.

That information gives funders important context about staffing levels, organizational infrastructure, and overall capacity.

Avoid These Common FTE Mistakes:

1. Counting people instead of hours

This is the biggest mistake. Having 10 employees does not automatically mean you have 10 FTE. Remember, FTE measures hours worked, not the number of people on staff.

2. Including volunteers

Many nonprofit leaders wonder if volunteers count toward FTE. In most cases, they do not. Standard FTE calculations typically include paid employees only, unless a funder specifically asks for volunteer FTE.

3. Using estimates instead of actual data

Whenever possible, use payroll or HR records rather than guessing. Using accurate numbers helps build credibility and ensures consistency across applications.

4. Reporting different numbers in different places

Your FTE should align with information reported in your:

• IRS Form 990

• Annual reports

• Organizational budgets

• Audited financial statements

• Grant applications

Inconsistencies can raise unnecessary questions for funders.

Why This Matters for Grant Readiness:

Knowing your FTE demonstrates that you understand your staffing structure, operational capacity, and ability to manage additional funding.

If you are not already tracking FTE, now is a great time to start.

A simple spreadsheet with employee names, average weekly hours, and calculated FTE totals can save significant time when grant applications ask for this information.

The next time you see the question, "How many FTEs does your organization employ?", you will not have to scramble for an answer.

You'll already have it.