New nonprofits need enough startup funding to cover registration, incorporation fees, and other abrupt costs appearing in the beginning. So, how do nonprofits get seed money? Startup grants are one of the best ways to cover all your startup costs. This article shares where to find them and steps to take to ensure funding.
New nonprofits are often passion projects, but it doesn’t take long for founders to ask, “How do I raise money to start a nonprofit?” One of the best ways to find funding is with nonprofit startup grants. New organizations can contact private foundations and corporations and search for state, federal, and municipal grants to help with startup and operational funds. Read more for more grant options and the best ways to secure startup grants.
New nonprofits need enough startup funding to cover registration, incorporation fees, and other abrupt costs appearing in the beginning.
So, how do nonprofits get funding to start?
Several free resources are available for new nonprofits, but startup grants are one of the best ways to cover all your startup costs. This article shares where to find startup grants and the steps you must take to secure funding.
The biggest fear of nonprofit founders is finding money to get started. Depending on your organization’s needs, there are several nonprofit startup costs, including:
The Internal Revenue Service (IRS) requires a fee of either $275 or $600 to register as a 501(c)(3) nonprofit organization. State incorporation fees can add several hundred more dollars to your budget.
Thanks to fiscal sponsorships or startup grants from different resources, nonprofits can cover the essential expenses to get started.
Let the CEO and Founder of Instrumentl, Gauri Manglik, and Donorbox Nonprofit Expert Cara Augspurger help you grow your nonprofit’s grant potential on this podcast episode here –
If you’re lucky, you’ll win 4 out of 10 grants you apply for in the beginning. Therefore, it’s best to apply for more grants than you’ll need because competition is fierce.
Private foundations are one of the best grant funding sources for new nonprofit organizations.
They can be individual, family-run, or community foundations. A community foundation focuses on supporting a geographical area, so it’s one of the first places you should look for nonprofit startup grants. These organizations can also be excellent sources for administration and fundraising advice.
Every community also has a few smaller foundations that look to fund nonprofit organizations. You can check for potential foundations with local resources like your local Chamber of Commerce or city council.
You can also visit competitors’ tax filings to see where they find grants or search online databases that allow you to filter by region, state, and town.
Corporate responsibility is a popular business trend that benefits nonprofits, corporations, and the world. Many companies try to make a difference by financially supporting nonprofit organizations that fit their mission.
Most business grants would rather fund older nonprofits since they’re a safer bet. Other corporations see the potential of helping newer organizations. If you’re a new nonprofit hoping to receive corporate funding but don’t know where to start, you can begin building relationships with a nonprofit business plan.
The best way to introduce your new nonprofit organization is with a business plan. A detailed explanation of your organization’s mission, programs, and how you can benefit the community will encourage more corporations to provide startup funding. Another way to find corporate funding opportunities is to start with volunteer grant programs. Employers use volunteer grant programs to match their employees’ volunteer hours with donations. Nonprofits can also use these donations as a starting point to build a solid connection with the business.
New nonprofits should look for the corporate responsibility section on company websites to find information on grants and volunteer programs.
Government grants require more time and paperwork than earlier options. It may not be the best option for new nonprofits with limited staff, but they can offer more significant amounts. So it makes sense to give this a try.
Nonprofits interested in receiving federal government grants can register their organization at Grants.gov. Nonprofits can search by keyword, category, or agencies like the Department of Defense, Education, or National Endowment for the Arts.
The federal government’s budget is available to the public and can be an excellent way to find available funding.
Nonprofits must look for state grants. State and city grants will be more interested in funding smaller and new organizations.
Visit the following websites to find open and rolling grant applications –
While each grant and grant type has its requirements, you can follow a few strategies to boost your chances of success.
Getting your papers in order before researching and starting the application process can help make it much easier.
Take time to prepare the following documents and keep them handy –
You can also write a few statements on how your nonprofit’s programs stand out and help the community. Collecting a few testimonials at this point can help.
Nonprofits with similar missions and programs are an excellent source of potential grant funding. Now’s the time to visit their websites and see if they have a grant page or links to their tax forms.
You can also search websites like GuideStar or Charity Navigator. These websites provide financial and program information for nonprofits worldwide. You can find tax forms and collect a list of foundations and government grant sources they’ve received.
It also makes sense to connect with them directly and seek help. Such connections in or outside of the community will only strengthen your ground.
While applying for grants with larger prizes may be tempting, you must strategize to find the best fit. Before applying for any grant, ensure you fit all the criteria they have.
Grant funders know what they’re looking for and don’t appreciate wasting time. By choosing only grants that match your nonprofit and needs, you’ll have a better chance at winning.
Your best chance at winning a nonprofit startup grant is with personal connections. Do any of your board members have relationships with corporations or foundations? Can they get you in the door?
Take the time to ask staff, volunteers, and other supporters for their connections. You can also network and find ways to build relationships with local business and nonprofit leaders through your local Chamber of Commerce or other community groups.
Finally, ask to speak with other nonprofits to see what advice you can get. Do they have any tips or suggestions to help you get started?
Pro tip: Nonprofits don’t have to treat each other like competitors. You all have similar goals. Building relationships with other organizations can help you find nonprofits you can work with to fulfill your mission and partner with in applying for future grants.
As we mentioned, you’ll be lucky to win 4 out of 10 grants. That doesn’t mean the other 6 were a waste of time. Any feedback you receive from grant funders should be recorded and stored for future reference.
Don’t feel discouraged when you miss out on a grant. Instead, take the time to reach out to funders and ask if they have any suggestions. Learn which organizations they helped.
You can also volunteer with local foundations and help them read and choose grant winners. It will give you a bird’s eye view of what foundations look for and make you a better grant writer.
Grants are competitive and time-consuming. While winning them can help you start your nonprofit, always include other funding sources in your annual strategic plan.
Crowdfunding and peer-to-peer campaigns have become a nonprofit must-have since the pandemic. Online fundraising takes little to no expense and can help new organizations raise funds for specific programs, events, or capital campaigns.
Start a crowdfunding campaign with a specific fundraising goal to raise the seed money needed. Turn this into a peer-to-peer fundraising campaign and ask board members, volunteers, family, and friends to raise money for you.
They’ll create separate fundraising pages and reach out to their networks to raise as much money as possible. This also helps boost outreach right at the beginning and gain donors.
Donorbox Crowdfunding and Peer-to-Peer features help make it possible and easier to create customizable crowdfunding and peer-to-peer campaign pages and raise more money.
Here’s an example of a crowdfunding campaign turned into a peer-to-peer one that successfully raised funds with Donorbox.
Start Raising Money for Your Nonprofit
Nonprofits can also raise more seed money for their organization with matching gifts. Educate your supporters on how to double their impact by getting their employers to match a donation.
Corporations give back to a favorite charity by matching their employees’ gifts. Donorbox makes it easy to get matching gifts by partnering with Double the Donation. This integration lets you add a donation-matching widget to your Donorbox donation form or embed it on your website. Donors can check if their employers will match donations and complete the process at their end.
Starting a matching gift campaign at the start of your nonprofit journey can be highly beneficial. You can add the donation matching widget by Double the Donation to your crowdfunding campaign to multiply donations.
The costs related to starting a nonprofit can be surprising and overwhelming. Luckily, you’re not alone. The government, foundations, corporations, and even your competitors can all be excellent resources for finding startup funding.
Grant funding can bring in a significant amount, but fundraisers may have trouble knowing where to start. We’ve written several articles to help nonprofits prepare and find funding opportunities. Find them all on our Nonprofit Blog. It also includes helpful guides and other resources on starting a nonprofit.
If you’re a new nonprofit and can’t afford an online donation tool, Donorbox is here to help with no start-up or monthly fees and is an excellent option for nonprofits of every size.
Check out our powerful features and see how we can give your organization a leg up on your competitors.
Expert help and coaching can take your nonprofit growth to the next level – explore Donorbox Premium! Let the Donorbox experts be there with you every step of the way and show you the ropes of fundraising. Pricing is personalized for every organization.
Kristine Ensor is a freelance writer with over a decade of experience working with local and international nonprofits. As a nonprofit professional she has specialized in fundraising, marketing, event planning, volunteer management, and board development.
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Kristine Ensor