The hot topics at nonprofit conferences big and small.
Seen as the ‘pain in the neck’ and ‘necessary evil’ by many. Seen by others as, at the very least, an inconvenience and an annoying task.
Whatever the dominant attitude towards money in your nonprofit, the incontrovertible truth is that nonprofits need money to survive. All organizations do.
And there are plenty of ways to get it. Individual donations, crowdfunding, corporate sponsorships, membership fees… With a plethora of funding sources available and a multitude of funding models to choose from, it’s easy to get ‘stuck’ and feel confused.
In this article, we focus on one funding source specifically – grants – whether they’re right for your organization and where you can find them.
What are Grants?
A grant is a bounty, contribution, gift, or subsidy (in cash or kind) bestowed by a government or other organization (called the grantor) for specified purposes to an eligible recipient (called the grantee).
Grants are usually conditional upon certain qualifications as to the use, maintenance of specified standards, or a proportional contribution by the grantee or other grantor(s).
Grants are typically awarded to a nonprofit organization for a distinct program or purpose. A grantmaker generally focuses its giving on:
- A specific population (such as children or organizations in New York)
- Certain types of nonprofits (such as animal shelters or environmental groups)
- Particular types of support (such as program development or funding for equipment)
Grants can provide different types of support for your organization. For example:
Operating support or unrestricted funding is a grant for day-to-day operating costs or to support the general work of an organization. It’s not dedicated to a particular purpose or project.
Capital support is most commonly given for specific capital campaigns that involve building construction or acquisition, land acquisition, renovations, remodeling, or the rehabilitating of property.
Program development grants or restricted funding provide funding for a particular purpose or project.
What are the advantages and disadvantages of grants?
Grants can fuel big structural projects, enabling large-scale societal impact that otherwise probably wouldn’t be possible. Additionally, once you have obtained one grant, you are more likely to receive others. Furthermore, receiving grants is a good way to build your organization’s visibility and credibility.
On the other hand, grants can be very time-consuming. It first takes time to develop grant-writing skills that actually win grant proposals, then it takes time to write a winning application, and then it can take quite a while for you to see the funds in your bank account.
Additionally, grants usually come with strings attached. Typically, there are conditions that will refer to how exactly you can use the money. These conditions can also be related to particular program outputs or outcomes.
How to know if my nonprofit should apply for a grant?
Every grant-giving organization will have different requirements. These requirements will differ from one country to another, and from one grant-giving organization to another.
Before deciding to apply for a grant, take the time to discuss and consider these with your team:
- Are we able to invest the necessary resources in writing winning grant applications?
- Can we meet the grant conditions?
- Are the activities we would conduct consistent with our mission, our aims, and our strategy?
- Can the activity continue after the grant funding ends?
- What do you need to be funded? Why is the grant necessary for your organization to continue your work?
- Do you have the right staff with the right qualifications in place to implement your program?
- Do you have outcomes related to your past work? How healthy are those outcomes?
It’s also useful to take a breather, remind yourself of your organization’s mission and vision, and review your short-term and long-term organizational goals. If you’re going to give grants a go, then they should have a clear place in your overall organizational strategy.
In 2017, according to Giving USA, foundations contributed 16 percent to the overall philanthropic pie, corporations gave 5 percent, while individual giving accounted for 70 percent.
Keep this in mind when developing your annual fundraising plan. While grants matter, individual donors make up the bulk of most charitable income.
Note: Many grants also feature specific reporting requirements that you should consider before applying. The key is finding grants that match the unique needs of your organization.
Grants For Nonprofits – Quick Insider Tips
1. Align, align
As a nonprofit organization, you only want to work with and be associated with organizations whose mission and values are aligned with yours. If not, you’re risking your reputation and might end up losing donors and supporters.
Before applying to any grant, take the time to look through the grant-giving organization’s website, socials, blogs, and browse through the news about their work.
2. Start small and local
While you might be tempted to go all in and apply to your country’s largest grants (and by all means, go for it), it might be smarter to start small and local. If your organization has never applied for a grant or doesn’t have a large number of donors, then local funding is the best place to start.
Starting with small, local grants helps you build grant application writing expertise, and will help you build credibility that you need to then apply for bigger grants.
3. Make a budget
Outline the project or the initiative you need funding for, and then determine the exact amount you need to fund said project.
Use this information to create a line-by-line budget that includes every dollar you intend to request and ultimately using the grant money. That way, you know what type of funding you are looking for.
When you start looking for grants, benchmark against other similar nonprofit organizations.
For example, if your nonprofit is an animal shelter – take a look at who’s funding other animal shelters in your local area or your state.
5. Triple-check the requirements
It’s better to spend some time carefully reviewing the grant requirements before applying to make sure you can meet all the stipulations than to find yourself in an uncomfortable situation later on.
As mentioned before, grant criteria vary drastically depending on the type of funding you need. For example, requirements for government grants differ from those of private foundations and other nonprofits.
6. Be prepared
Before embarking on an often time-intensive and cumbersome process, make sure you’re prepared.
Have your strategic plans, your project plan, your mission statement, and any tax forms (including Form 990) on hand.
This will make your grant-applying process more efficient.
7. “How do we know that?”
Governments, foundations, and even corporate foundations continue to press nonprofit organizations to demonstrate the impact of their programs.
It’s no longer sufficient to simply say you do something. In today’s day and age, you have to prove it. If you’re not already measuring your impact, now is the best time to start. Not only will some grants ask for proof of the previous impact, but it will also be important to clearly think through how you will measure outcomes before you apply for a grant.
8. Build relationships
Just like with every other type of fundraising, relationships matter.
Don’t hesitate to call a foundation to test the waters … would they welcome your application? Strike up a conversation with a program officer or the founder of a small foundation. Ask questions. Add them to your e-mail list. And don’t overlook networking with foundation staff. Seek them out at conferences, call a program officer at a foundation, and discuss your project and whether it is a good fit. Follow the foundation on social media.
If your grant is rejected, find out why, and check if there is anything you can do better or differently in the future. Always ask if there is another funding source that they can recommend. Never burn bridges.
Where to Find Grants for Nonprofits? – Sources for Nonprofit Grants
Competition for all grant funding has intensified significantly during the last few years. Additionally, most nonprofits grapple with a lack of time, lack of staff, lack of money for database subscriptions, and lack of understanding/knowledge about grants.
According to Small Business, the competition is high because billions of dollars in grants are available every year. There are 26 federal grant-making agencies and more than 900 federal programs in the federal government alone. These include the Departments of Agriculture, Commerce, Defense, Education, Energy, Housing/Urban Development, Justice, Labor, and Treasury. as well as the National Endowments for the Arts and Humanities.
If you’re based in the United States, the US government has a searchable online database of government grants to help you find what you need. Click on “Find Grant Opportunities” on the left side of the page, then select “Basic Search” to search using a keyword or a combination of keywords to find the right federal grants for your work.
Pro tip: Join the Grants.gov mailing list to receive a daily or weekly digest of current federal funding opportunities.
2. Foundation Center
Foundation Center is particularly useful for its extensive directory and free resources. This is the primary online source for grants available through private foundations, corporate foundations, and other nonprofits that accept grant proposals.
Google.org has over $1 billion in funds they plan to give out over the next 5 years. Tech grants for nonprofits are announced on a rolling basis listed on their Google Impact Challenge page.
4. Google Ad Grants
Google Ad Grants program offers $10,000 USD of in-kind advertising every month from Google Ads, an online advertising solution from Google.
Their search engine identifies grants for universities, hospitals, government agencies, schools, community-based organizations, faith-based organizations, research institutions, and some small businesses and individuals.
6. Local/State Funding
Depending on where you’re based, it might be useful to try finding grants at a municipal or state level.
Contact the relevant local or state departments and/or look through their websites. You might want to consider contacting the Department of Health, Jobs and Family Services, Human Services, Department of Development, Small Business Development, Department of Education, Department of Transportation, or City Councils. Ask about the grants they have available.
Pro tip: Choose the department that most closely relates to your mission. For example, if you’re an educational nonprofit, your best bet is the Department of Education.
7. Search Engines
Sometimes, a good ol’ Google search (or a search on another search engine of choice) is all you need.
For that search to be effective, though, you need to have keywords ready on hand. What are the 10-20 keywords that describe your work and your need?
Your criteria can include keywords, subject matter, geographic area, target audience, gender, race, ethnicity, and any other parameters that fit your nonprofit. Make a list in advance so you can refine and focus your search easily.
Guidestar provides information on all kinds of nonprofits, including foundations. You can register for free and use the advanced search capabilities to find the 990-PFs of foundations.
9. Board members
An often underutilized resource, your Board is a potential grant goldmine. As you do your research for funders, take note of foundation trustees and staff and forward those names to your board to see if there are any connections.
Also, consider directly asking your board members if they know of any family foundations, corporate foundations, or other grantmakers who might be interested in supporting the work of your nonprofit, and if they would be willing to make an introduction.
10. Go outside the box
Look at annual reports and newspaper articles. Who is giving to organizations that are similar to yours? Put any likeminded funder on your mailing list and start sending them materials about your organization.
Be sure to join a national professional organization such as the Association of Fundraising Professionals (AFP). There will be a local chapter where you can attend meetings, network with fellow fundraisers and learn about local opportunities.
Also take a look at:
- The Grantsmanship Center
- Community Foundation Locator
- The Chronicle of Philanthropy
- Nonprofit Expert
- The Stable Company
- Fundraiser Help
Over to You
To apply or not to apply? Which ones to go for? What should be the ratio of grants to other income sources? How to write winning proposals? Where to find them?
Grants can be tricky to figure out, especially for small nonprofits.
However, the more time you put into preparation, the better your results. Take the time to get ready, prospect, and understand how, why, and where your organization excels in providing services.
Grant seeking is not a one-off. Successful nonprofits commit to creating a grants program by researching grants all the time, learning as much as possible about grant writing, and making applications for grants frequently.
Don’t be discouraged by the inevitable ups and downs. You have to start somewhere. Just keep it up through thick or thin. You usually need one “yes” for all of it to pay off!