Soapbox Engage Blog

A successful nonprofit organization will raise funds through a variety of avenues: individual donations, specific campaigns, corporate sponsorships, etc. One avenue for funding that can’t be ignored is grants. However, applying for grant funding can be overwhelming, especially if you’ve never done it before. That’s why we’ve compiled some info that can help you during your process!

Table of Contents

• What are grants?
• Questions to ask before applying for a grant
• Tips for success
• Where to look for nonprofit grants

What are Grants?

Grants are donations from a government, foundation, corporation, or organization to support a specific mission or cause. They are a critical source of funds. Some experts recommend that nonprofits use grants to cover up to 20% of their total annual budget.

The application process can vary widely from one grant to the next. Generally, it requires a written application and a proposal outlining exactly how you'll use the money.

Different grants provide different types of support for your organization.

Unrestricted funding: These grants provide money for the daily operating costs of running your organization. Unlike many grants, grants that provide unrestricted funding don’t need to be allocated to a specific project.

Capital grants: These grants are given to fund capital campaigns, construction or acquisition projects, renovations, remodeling, and other projects having to do with purchasing, building, or upgrading your property.

Restricted funds or program grants: These grants are designed to fund specific projects. They come with a lot of regulations about how and where the money can be used. You will likely have to provide a detailed report on how the money was used to fulfill the goals of the program.

Research grants: Research grants are usually found in the academic arena to fund research and development projects.

In-kind grants: Some grants don’t offer money at all. Instead, they provide equipment or even services. Many corporations generously supply in-kind donations and grants like computers or software, or technical support.

Questions to Ask Before Applying for a Grant

Many nonprofit leaders find grant applications overwhelming. But if you do your due diligence, it doesn’t have to be. Here are some things to consider before applying for grants:

What is your nonprofit's current fundraising and financial status? Grantors typically want to invest in nonprofits that are already fully operational and financially stable. Grants are meant as a supplement, not the primary funding strategy.

Do you have a clear purpose for your nonprofit? Do you have a clear and compelling mission statement that communicates what you do? Can you distinguish yourself from other organizations that might be doing similar work? Is it a challenging but achievable mission? You will have to be able to clearly communicate your mission, and how the funding will support achieving this mission, in your application.

Do you have a good reputation and evidence of success? Has your nonprofit demonstrated that your programs or efforts do make a difference for those you serve? Have you kept track of your progress over time?

All grants are different. And not every grant that exists is the right fit for your organization. Use these guiding questions when deciding whether to apply for specific grants:

• Why is the grant necessary for your organization to continue your work?
• Is the program consistent with your mission and strategy?
• Can the program continue after the grant funding ends?
• Are we able to invest the necessary resources in writing winning grant applications?

Grants should be supplementary, as opposed to your primary source of funding. You don’t want to invent programs solely because you think you can get them funded. When applying for grants for a specific program, it’s important that you are thinking about the program as essential to your work, as opposed to an opportunity for funding. Make sure it is aligned with your ultimate mission, and have your alternative sources of funding planned in case you don’t get the grant.

Grants are very competitive, and take time and energy. If you don’t take the time and resources to do it properly, you’re even less likely to be awarded the grant. It’s important that you have the team and resources you need, whether that means hiring a grant writer on staff, getting a data collection program, etc.

Tips for Success

There are many different things that will help you as you begin the grant process. Here are some tips from industry experts.

1) Check your list of needs

Many nonprofits create a list of specific needs at the beginning of their fiscal year by gathering the leadership team and program directors to generate a list of specific needs and wants for the upcoming year. Prioritizing the needs on this list will help you determine where to put your time and energy. Determining the cost of everything on this list can help inform your budget. All of this information can set you up to find the grant(s) that will best fit.

2) Start locally

It’s true that there are national, and even international grants that may fund your program. But that also means you will have a much wider pool of competition that you are up against. It is best to start small, and look for grants in your local area. Are there grantors that are looking to fund projects in your state, or even specifically your city? Starting small allows you to build your grant writing experience and credibility that goes a long way when you're applying for much larger, more competitive grants.

3) Build relationships

Don’t let the application process fool you. Just like all fundraising, relationships are essential to your success. This is also where starting locally can be to your benefit.

You can call a grantor/foundation to introduce yourself and see how they feel about receiving your application. Better yet, maybe you have a board member or community partner with a connection to a foundation, who would be willing to make the introduction.

It’s also a great idea to network 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. And this doesn’t just apply to the grant review period. 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, and continue to cultivate the relationship. Just because your grant application was rejected one year doesn't mean the same grantor won’t fund you in the future!

4) Use the 3-way fit test

One way to hone in on grants that are likely to fit your nonprofit is to use what Leah Holt calls the "3-way fit test".

Funders usually prefer to support nonprofits in their geographic area (a city, region, or state). Look for funders who have invested in projects in your area in the past.

Next, look at the foundation or funder's mission, goals, and interests to make sure your nonprofit fully aligns with their vision. You're probably not going to win a grant from a foundation that primarily funds arts education programs if your nonprofit is working to end homelessness. Both are important causes, but foundations have to make choices somehow, and most have a fairly narrow goal or interest area.

Finally, look for foundations that are giving the type of money you need. If you're not planning to renovate your building, you don't need a building or capital grant! Make sure you're applying for the correct type of grant.

Where to Look For Grants

There are many places to look for the countless grants available, and we highly recommend doing some local research! But here are some options to get you started:

• The Foundation Center Online: This online grant database is one of the top sources for grant information.
• Grants.gov: 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.
• Grantwatch.com: 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.

Here are three more resources that will continue to help you as you’re fundraising:

• 5 Marketing Strategies Every Nonprofit Should Implement: Marketing as a nonprofit with limited resources can be challenging. However, no matter what kind of nonprofit you work for, marketing is essential. This blog post offers 5 marketing strategies every nonprofit should understand and utilize.
• 8 Tips for Hosting a Virtual Fundraising Event: More in person events are happening, but the shift to virtual working in the pandemic is here to stay. You are likely to have a combination of in person, virtual, and hybrid events in the future. This blog post offers 8 tips for hosting a successful virtual fundraising event.
• 6 Fall Fundraising Ideas for All Nonprofits: August has begun, which means fall will be here before we know it! If you’re stressed about meeting your end of year goals and looking for some inspiration before you head into the final quarter of the year, this blog post is for you. It features 6 tried and true fall fundraising ideas that are sure to be a success.