Leaders in the nonprofit sector know that getting extra funding is not an easy feat even in the best of times. Add two pandemic-fueled years of closed doors and limited opportunities, and it’s obvious that you’ll have to get creative about expanding your revenue stream. While asking for donations and teaming up with corporate sponsors is probably already at the top of your to-do list, if you’re not applying for grants, you’re missing out.
For most organizations, only 14 percent of funds come from charitable donations (i.e. donations from individuals, corporations, and foundations). The rest? More than 80 percent of nonprofit revenue comes from fees, sales, and—you guessed it—government grants and contracts. Despite these impressive numbers, nonprofits rarely prioritize grant applications, and fail to track new grants and grant-related trends. Don’t let this be you!
In this guide, we’ll break down the different types of grants available to nonprofits, why they’re awesome, and show you how to apply for them step-by-step. There’s never been a better time to learn about obtaining grants for nonprofits to get some much-needed cash!
What Are Grants for Nonprofits?
Grants are funds awarded on a competitive basis to nonprofits by governments, foundations, or corporations. The funds vary from a few hundred dollars to millions, with the understanding that the funds are to be used for a very specific purpose, like building a library, running an educational program, or setting up a relief shelter.
Unlike individual donations, grants usually come from big institutions, and unlike loans, they don’t have to be repaid.
Why Should Your Nonprofit Apply for a Grant?
While grants can get a bad rap—they’re hard to apply for, they’re not flexible enough—the truth is, there are lots of solid reasons to add grant applications to your repertoire. The biggest draw of grants for nonprofits is free money.
Aside from the obvious, grants are a good idea because:
- Grants make your nonprofit look good. Everyone knows that grants are competitive and not everyone gets one. If your organization can show that it attracts big awards from serious agencies, it instantly becomes more prestigious in the eyes of potential donors. It means your mission must be important, so more supporters will be willing to hop onboard.
- One grant can lead to many grants. Once you score your first one, both applying and obtaining grants becomes easier down the line. Not only are you familiar with the expectations and constraints of the process but grant makers will look more favorably on your application when you can show that you’ve been awarded funding in the past.
- Grants diversify your revenue stream. Sure, fundraisers, sales, and individual donations are stellar strategies for getting extra cash, but the wider you cast your net, the bigger your coffers. Having a few grants in the pipes to count on helps stabilize your resources and, again, makes your organization look good to donors.
- Grant application enhances professional development. While applying for a grant isn’t exactly cake, it’s a trainable and learnable process that involves research, writing, and communication. Those are transferable and marketable skills that look awesome on a resume or cover letter. Being able to find, apply for, and score grants makes you a major asset to any team.
Types of Grants
Operating Support Grants
These types of general purpose grants are intended to offset the everyday cost of doing business and can include everything from paying your staff to funding essential programs.
Program Support Grants
When you have a particular project that you need to get off the ground, a program support grant might be just the ticket. Let’s say you want to organize weekly meals for vulnerable folks throughout the winter, rebuild a historic bridge in your region, start a math club in your school, or maybe just travel to a conference. A project like that has a beginning and end date, a specific budget, and clear goals and objectives. Program support grants can’t be used to fund anything other than that specific project.
Capital Grants
This grant is for funding an infrastructural or other physical asset that your organization needs in order to operate and intends to use for the long-haul. Think playgrounds, buildings, or office chairs.
Startup Grants
If your project or organization is still in its infancy, a startup grant can help your nonprofit finds its feet. It might cover expenses for the first few years, gradually decreasing as you grow, i.e. $16k for the first year, $8k for the second year, and $4k for the third and final year.
How to Apply for a Grant: A Step-by-Step Guide
Search and Research: How to Find Grants for Nonprofits
It all starts with gathering intel. If you’re wondering where to find grants for nonprofits, most will be offered either by federal, state, and local governments, or by foundations (think the Bill and Melinda Gates Foundation). Begin your search by scrolling through sites that regularly advertise grants and checking out individual grantors to see if their mission and values align with yours.
Some great places to start:
- Grant Watch. Whether your nonprofit is working on behalf of seniors, the environment, or education, it’s likely that you’ll find something on Grant Watch that aligns with your goals. The site advertises both foundation and government grants, including regional grants, and is a phenomenal place to get your grant search off the ground.
- Grants.gov. If you’re eager to get some federal support in your corner, check out Grants.gov. Aside from letting you search for an impressive list of government grants, they post grant writing tips, ideas about how to find grants for nonprofits, and other resources to ease your application journey.
- Candid. A directory of corporate, private, and nonprofit foundations that award grants on the regular, Candid is a must-use tool for grant-seekers. Conveniently, the site lets you know which grants specific foundations have awarded previously, so you get a feel for whether they’ll be a good fit before applying.
Narrow it down
So, you’ve made a shortlist of grants for nonprofits that jive with your mission? Great! It’s time to pick through them extra carefully to make sure that your organization can meet all the criteria they’re looking for in an applicant. Some grants are regional, others are geared only toward infrastructural expenses, while others have very narrow restrictions for the types of programs they’ll fund. Check and double-check that you’re a good candidate. We’re not kidding: be extra thorough. It could save you a major headache later.
Gather your materials
It’s likely that the grantor will have an application for you to fill out where you’ll address all the details of your organization, how much you’re applying for, and where the money will go. Whether there’s an application or not, here’s a breakdown of what you’ll need to prepare:
What’s the problem?
This is where you briefly introduce your grantor to the reason you’re asking for funds in the first place. Whether it’s a program, project, or ongoing costs, frame it as a problem and how you will deliver a solution.
For example, let’s say there’s no after-school program at your high school, and students are getting into academic or legal trouble because they have no supervision until their parents get home from work. Your summary: “X% of students at High School ABC are suffering from low test scores/mental health concerns/legal problems. An after-school music/computer literacy/sports program will address the issue by providing children with a safe space to gather, socialize, and learn new skills outside normal school hours.”
Goals and objectives
Distill the problem to be addressed to the specific aims you want to see: reducing food insecurity in your city by 7%, or increasing availability of a certain healthcare option in Hospital H by 50%, or building a community gym in Neighborhood N.
Target population
Who will benefit from your program or project? Whether it’s a percentage of young people in your region that you expect to use the new neighborhood swimming pool, or the folks in a senior living community who will benefit from a new program, be specific about whom your proposed project will serve.
Project activities
What needs to be done to accomplish or carry out your proposal? For example, if you’re creating an after-school music program, you’ll need a breakdown of what equipment you’ll need, who will obtain that equipment and when, what venue you’ll use, and how long everything will take.
Don’t be waffly: use hard dates, specific names, and key numbers (i.e. Stan Stanley will teach, 44 kids will be taught, 14 violins will be purchased, the program will begin on January 3 and conclude on May 3, there will be a performance for parents on May 5, etc).
Budget and timeline
How much are you applying for? Don’t ballpark it. Have a professional spreadsheet that lists every single expense you expect to incur for your program or project. Same with a timeline. How long will the project take? If it’s an ongoing thing, then specify which dates the funds apply to.
Measurable impact
If you’re successful in building the gym/hiring the music teacher/expanding the food pantry, what will be the end result? Will you be able to feed 100 new visitors, teach music to 25 children, or improve the health of 20% of your neighborhood? Whatever it is, be specific but also realistic.
Organizational background
In this section, succinctly communicate your history, mission, and values. Explain what you stand for and why it’s important. Tell a compelling story, but don’t be long-winded: your readers are likely busy. Think of it as a trailer for a movie: include a basic summary, use punchy language, and stick to the highlights.
Current programs and accomplishments
This is where you get a chance to show off your organization. What has your nonprofit done in the past that’s like the project or project you’re hoping to implement? If you’re applying for funds to launch a summer program at a history museum, for example, how successful was the winter program? What has your museum contributed to the community? Do you offer workshops, free days, or educational opportunities? Keep it succinct, but play up your major achievements.
The legal stuff
Not all grantors require legal documentation, but just in case, it’s a good idea to have your 501(c)(3) letter from the IRS and audited tax records from the previous year on hand.
Cover letter
Many people are intimidated by cover letters, but it’s the easiest part! Take it seriously, of course, but don’t sweat it. The basic point of a cover letter is to show the grantor that your project matches their funding requirements. Mastering the art of the cover letter is a useful skill that can help you write exceptional grant proposals, as well!
The best time to write it? After you put together the rest of your materials, so that all the relevant info is fresh in your mind.
Here are the major points to hit in your cover letter:
- Open: Address your letter to a specific individual. Grant announcements usually specify who will be handing applications. If there’s no name, scour the grantor’s site for a contact name and title, or just call the organization or foundation’s corporate office and ask. Never, under any circumstances, open with “Dear Sir or Madam” or the dreaded “To Whom It May Concern.” These are unprofessional and lazy opens that show you didn’t bother to do your research. Your letter should open with a “Dear” followed by a title, followed by a last name, i.e.: Dear Mr. Moneybags, or Dear Dr. Watson.
- Paragraph 1: Introduce your organization.
- Paragraph 2: Provide a brief overview of your proposed project.
- Paragraph 3: Explain succinctly how your project fulfills the grantor’s requirements.
- Paragraph 4: Specify how much you’re applying for and where the funds will go
- Close: Add a “Sincerely” and have your nonprofit’s executive director or president sign their name (use a pen or an electronic signature) above their printed name. Put the word “ENCLOSURE” in caps at the bottom of the letter so that your reader knows that you’ve included other documents.
Tip: When you’re writing, brevity and professionalism are your best friends. Your reader is busy and there’s a tower of applications just like yours on their desk. Take pity on them and get to the point ASAP.
Offset Grants with Memorable Fundraisers
While you’re applying for grants, it’s smart to fundraise at the same time to keep things humming along. Simply creating customized donation pages or running a crowdfunding campaign can reap big rewards in no time!
RallyUp is a clever fundraising platform that’s here to help your nonprofit reach its funding goals with 24/7 support and intuitive tools that are FREE and EASY to use. So, send off that grant application and kick off your best fundraiser yet to stay on mission every day!
