If you’re unfamiliar or intimidated by the grant process, you’re not alone. You may have heard stories about the many hours it takes to get all the paperwork together, the tedious wait times, and terrible rejection rates.
But I’m here to tell you that finding and applying for grants doesn’t have to be difficult, especially if you take the time to prepare yourself and your organization properly.
Grants, large donations given by foundations, corporations, or governments to support your organization, are an essential source of income for many nonprofits and should be incorporated into your yearly fundraising plan whenever possible. Some experts suggest that nonprofits and charities use grant money to cover around 20% of their annual budget.
So, let’s start with the basics, including information about grants and foundations, as well as how to find grants that align with the needs of your nonprofit.
Grants are donations given by institutions as opposed to individuals and are often used to cover administrative and program-related costs. Depending on the source, type of grant, and purpose, the gift amount can range in size from a few hundred to millions of dollars.
Obtaining a grant is a different process than receiving an individual donation. For grants, a nonprofit generally submits a written request to the foundation, corporation, government entity, or other grantor to request the funds. In this proposal, charitable organizations specify how they will use the funds and present data to back up their request.
Why Should You Apply for Grants?
As nonprofits grow in size and scope, many realize the need to diversify their funding sources past individual gifts to grants from the government and private foundations.
Why should your nonprofit or charity apply for grant support? Here are three reasons why you should pursue grants.
- Grants Grow Your Organization
Growing organizations have a range of funding needs. Generating support from different sources can both increase your organization’s revenue and provide separate pools of funding to support various efforts within the organization.
- Grants Diversify Your Income Stream
If an organization relies too heavily on one source of funding, and that source of support disappears due to the economy, competition, etc., the nonprofit can end up in dire financial straits. Just like balancing your 401k, having different types of income streams, including grants, can help you minimize risk.
- Grants Relieve Pressure
While some grants are quite small, most awards are significantly larger than individual donations. In fact, it’s not uncommon for grants to be tens of thousands of dollars. Also, grantors often award gifts over years (e.g., $60,000 over three years, which results in $20,000 going to the nonprofit per year), which helps make more significant program-level investments over an extended period.
4 Common Grant Types
There are many different types of grants, but the four grant types most common for nonprofits and charities include:
- Program support
Program support grants are restricted, meaning nonprofits must only use the funds for the specific purpose outlined in the grant proposal. Keep in mind, these grants generally do not support administrative expenses.
- General operating support
General operating support grants are the least restrictive and most sought-after type of grant, as they cover almost any expense. Although they’re coveted, they’re not common. The vast majority of foundations do not give large amounts of unrestricted support.
- Research grants
Many health-oriented foundations provide research grants, generally awarded to academics, scientists, and other researchers working on particular health and wellness-related issues. Frequently, research grants will be payable to the institution, such as a university where the researcher is affiliated.
Research grants are not necessarily common for young nonprofits, but they’re an important source of funding for many organizations paving new ground on an issue.
- Matching grants
Foundations of all varieties provide matching grants; thus committing to a particular amount of grant money provided that the nonprofit can raise an equal amount of money from other sources.
Getting Started: 4 Tips for Finding Grants
1. Establish A Budget For The Grant Money
Don’t fall into the trap of just applying for funds without knowing precisely how you plan to use the grant money. In fact, the chances of securing grant money for an undetermined expense is highly unlikely. Institutions will understandably want to know how you plan to use their money.
When finding grants, the first step is to outline the project you need funding for and then determine the exact amount you need. Make a note of the following:
- What are the details of the project/expense? Why is it necessary for your organization to continue your work?
- Outline all costs associated with the project, including staff time, services, other administrative costs, supplies, travel, etc.
Use this information to create a line-by-line budget that includes every dollar you intend to request and where you would ultimately use grant money. That way, you know what type of funding you need.
2. Use These Search Engines
There are hundreds of millions of dollars in grant money available to nonprofits working within every single sector, from poverty relief to religious groups. The key is finding grants that match the unique needs of your organization, and these generally come from two main sources:
- Foundations or Corporations
- Government (Federal, state, local)
The best place to start is right within your local community. Talk with other nonprofits and do your research to answer these questions:
- Who are the funders in your region?
- Who are the funders who support the issue area in which your organization operates?
- Does your community have a community foundation?
- If so, does that community foundation provide resources for grant seekers?
From there, extend your search outwards. There are a large number of stellar grant search engines available online that will give you access to both foundation and government grants. Here are three of our favorites:
- Foundation Center: This is the primary online source for grants available through private foundations, corporate foundations, and other nonprofits that accept grant proposals. The search capabilities on this site are user-friendly.
- Grant Watch: For both government and private foundation grants, Grant Watch is a good search engine to use. Nonprofits and charities of every size will be able to find grants that match their needs.
- Grants.gov: Organizations interested in applying for federal grants will find this website relatively easy to navigate.
PRO TIP: “Start local. Community foundations work with local donors to fund projects that support community needs. Building relationships with community foundation officers will help identify possible grants or Donor Advised Funds that fit our mission. Engaging these officers, inviting them to see programs or meeting your staff and volunteers, better equips them to promote your organization with potential donors/funders.” –Adam Clevenger, CFRE, Loring, Sternberg & Associates
3. Match The Grant Criteria
Once you found some grants that you are interested in applying for, make sure you meet every stipulation of the grant criteria. Take the time to determine if you qualify. After all, the short amount of time you put into finding the right grant for your nonprofit could save you a lot of time and money down the road.
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.
Keep in mind that one of the main things you should be looking for is the type of grant you need. If you need to fix a part of your office space, then you’ll be on the lookout for operational and capital expenses. For program development and to expand the services your charity provides, focus your attention on program expenses.
PRO TIP: “You’ll want to research your local community foundation, family foundations, and corporations. Google will be your friend. What are their funding priorities? Deadlines? Typical grant award? I am also a big fan of benchmarking against other like organizations. If you’re a theatre group, look at who else is funding performing arts in your community.” –Sarah Cortell Vandersypen, CFRE, Philanthropic Partners
4. Have Your Documents In Place
Funding agencies ask for varying documents, depending on the type of grant you are looking for and the grantor’s criteria. However, there are some documents that you’ll need to submit with almost every grant, including:
- Your organization’s history and mission
- A description of your target population, their needs, and the services that you provide to meet those needs
- A statement explaining how your programs are distinct from other programs and services serving your target population
- Major accomplishments to date
- Challenges and lessons learned with the program to date
- Expected accomplishments with the funding you’re trying to raise
- Explanation on how you’ll evaluate progress
- Staff and team leader resumes or biographies, including senior leadership of the organization, board members, and the key staff who deliver the program whose activities you are trying to support
- Other organizations you work with to address the issue
- Financial information, including audited financials, a budget for the proposed program, a budget narrative explaining how you plan to use the grant funds, a list of other funders, and tax forms, including a Form 990
- A program sustainability plan with information on how the program will continue if a) it isn’t funded by a given foundation b) after one year of foundation funding
- Additional attachments such as a 501(c)(3) letter and an annual report
A prepared grant writer will have all of this documentation in place well before they start looking for grants to apply for. If you’re unable to procure a required document before the application deadline, then it’s best to skip over that particular grant and continue your search.
As a side note, don’t forget to do a quick search for your organization on Charity Navigator and Guidestar and spruce up any old or missing information to secure a high-level standing for both sites (1-4 stars on Charity Navigator, bronze through platinum for Guidestar).
PRO TIP: “Foundations and even corporate foundations continue to press organizations to demonstrate impact of their programs. They are no longer comfortable just giving out money or counting participation as impact. Organizations must clearly think through how they will measure outcomes before they think about applying for a grant. Outcome measurement requires a certain level of skill, without it, an organization risks future funding.” –Adam Clevenger, CFRE, Loring, Sternberg & Associates
Common Grant-Related Questions
Can I use a grant for online fundraising?
Yes! Many nonprofits find that some types of grants are a perfect supplement for online fundraising.Here are a few ways to maximize your peer-to-peer and crowdfunding with grants.
- Donation matching: Use grant money to match individual donor gifts.
- Capacity building: Use grant money to fund online fundraising consulting services or administrative fees.
- Social proof: Use grants as a way to show your donors that your organization is trustworthy and credible. By sharing news of your grants on your online fundraising website, you validate your cause.
Remember that you should have a solid understanding of the type of grant you’re receiving before you use it for online fundraising. For example, you can’t automatically use a program grant to crowdfund online.
Can I apply if I only meet a few requirements?
Save your time. Remember, every foundation has its own requirements– everything from deadlines to what it will and won’t fund. The first step in writing a proposal to a particular funder is to know what that funder’s specific requirements are and be sure that you address them.
Applying to a funder that does not fund in your state or the type of organization you represent is not a recipe for success.
Should I hire a professional?
Possibly. Submitting a grant takes tens if not hundreds of hours of research and writing, and some nonprofits don’t have the capacity to handle that commitment. If your nonprofit is stretched, consider hiring a professional grant writer or freelancer. Otherwise, make sure your staff has the proper training and tools such as grammar checking software to guarantee a clean, effective proposal.
I work at a new nonprofit. How do I get a leg-up in the process?
Most funders want to see a demonstrated impact and diverse funding sources before they give a grant. That being said, it’s almost impossible (although not entirely unheard of) for new nonprofits to get millions in grants early on. The best way to get a leg up is to start fundraising on a smaller scale through online peer-to-peer fundraising. Showing you have dozens, if not hundreds of donors will help you show your worth.
Ensuring that your nonprofit has enough resources to operate is a never-ending job. But chances are, there are grants out there that match your nonprofit’s needs. Use these basic tips on how to find grants for your nonprofit and try your hand at searching and applying for grants that you are qualified for, or hire a freelance grant writer to do the heavy lifting for you.
When all’s said and done, you may find this fundraising technique to be an effective and worthwhile way to fund impact around your cause.