Your nonprofit probably relies on a couple of different revenue streams to sustain its programs and operations—great! Are grants part of your budget or strategic plan?
Grants make up a critical portion of the nonprofit funding landscape, yet tons of growing nonprofits put off learning about them and seeking grant funding. After all, if things are running smoothly (enough) with your current programs and revenue sources, why shake it up? Is the time needed to find and apply for grants even worth it?
If you’ve wondered these questions, this guide’s for you.
The fact is that grants unlock amazing opportunities for organizations, and while the process of applying for grants may seem daunting, it’s a learnable and highly valuable skill. We’ll take a look at why you should apply for grants and orient you to the world of grant funding so you can take your first steps with confidence.
First Things First: Should My Nonprofit Apply for Grants?
Yes, it should. Most nonprofits (small, medium, large, in every mission area) already do.
Nonprofit Impact Matters found that, as a whole, the nonprofit sector generates about 32% of its revenue from government sources (including grants and contracts) and 3% from foundation grants. It’s generally recommended that grants should make up a healthy 10-20% of a nonprofit’s annual budget. This will naturally vary for every organization, but the point is that grants should be in the mix to some extent.
Why?
Revenue diversification is part of responsible stewardship for nonprofits.
If you over-rely on one stream, like annual donations, you create risk. If that stream dries up (or just slows down) for whatever reason, you don’t want to be left standing in a shrinking puddle. Maybe an economic downturn causes donors to rein in their annual gifts, or an unforeseen expense crops up like fixing a leaky roof. If limited money has to be diverted to cover operations, other parts of your budget will suffer as a result.
This is a common challenge for nonprofits, especially today. Individual giving has declined, and bigger donations from much smaller groups of donors are taking increased precedence for many organizations.
Thankfully, giving from foundations continues to grow. The rise of new forms of giving like donor-advised funds (directed by individuals but technically given by foundations or corporations) has also opened up new ways to build connections with both donors and funders.
You enter the world of foundation and corporate giving by seeking grants. By learning to navigate these worlds, you can overcome your limiting factors. Diversification helps you build a safer, more sustainable budget that enables more steady growth each year.
How Does Grant Writing Pay Off?
Let’s look at the full range of benefits that grant writing brings to nonprofits when they make it a consistent priority:
- New revenue sources. As discussed above, new funding streams and regular payouts from funded long-term projects help you diversify and safeguard your budget.
- New value-generating skills. Master the craft of researching, applying for, and managing grants and you’ve got a repeatable formula for supporting your work. These skills are highly valuable, which is why many grant writers are able to launch their own lucrative freelance careers.
- New connections. One of the biggest but easily overlooked benefits of grant writing is that it helps you build connections with funders over time. Many grant opportunities never go fully public and are instead “invite-only.” Snag these invites and build a stellar reputation for your nonprofit by consistently putting it on funders’ radars.
Grant Writing as an Investment
Of course, learning any new skill requires an investment of your time. Each stage of the grant seeking process takes time, too. Rushing through grant research or sending the same vague proposal to multiple funders at once isn’t likely to generate the results you want.
At first, remember that any little bit of intention you can put toward grant writing will count. If you’re starting from zero, there’s nowhere to go but up. Secure that first grant with some hard work and faith in the investment, though, and feel your energy soar!
Think of past investments your nonprofit has made that paid off after you put in the work to prepare and learn, like improving your email strategy or hosting a big in-person event for the first time. Consider their results and the ROIs they generated, not just financially but also in terms of the skills you learned. They probably made it a lot easier to draft better and better emails or plan your next standout event.
Grant writing is the same way. Invest time in learning, put your skills into practice, and see how grant seeking gets easier and more efficient over time.
You’re not on your own, either. A wide variety of grant writing classes (some free) and collaborative training communities are easily available online these days. AI tech in grant writing tools helps grant newcomers reach efficiency faster than ever, too.
What are the Different Types of Grants Available?
Once you’re ready to begin your grant writing journey, what kinds of opportunities can you find? Let’s take a look at the variety of grants available and what you’ll need to start pursuing them.
The easiest way to categorize grants is by their source. Grants for nonprofits generally come from three types of organizations:
- Foundations are a diverse group in and of themselves. Public foundations (sometimes called public charities) include community foundations. Private foundations include family foundations.
- Government agencies at the local, state, and federal levels frequently offer and administer grant programs for nonprofits in their jurisdictions.
- Corporations may give grants to nonprofits through workplace giving programs and corporate foundations that manage their social responsibility efforts.
Within the grants from any of these sources, there are further subdivisions you can encounter. These are based on how the grant’s funding is structured and how it will be paid out to your nonprofit if you win it. These structures include a number of factors:
- Restrictions. Funding can be restricted to the specific project in your proposal or unrestricted for general operating use (but these are rare).
- Frequency of payout. Grants might pay a one-time lump sum or be disbursed to your nonprofit in installments following a specific timeline.
- Portion of project cost. A grant might be a single flat amount (you apply for a $1,000 grant and receive it) or follow a matching structure (you apply for a 50% matching grant for your $1,000 project, win it, and receive $500).
Each of these categories and grant structures brings additional considerations and reporting requirements to keep in mind as part of the full grant lifecycle.
For example, federal government grants usually bring intense financial reporting requirements. Grants paid in installments will ask for specifically formatted reports on what you’ve done with the payments so far and what still needs doing. Matching grants have a variety of diverse requirements. Funders should always provide detailed instructions for their grant opportunities so that you’ll know what to expect and can prepare accordingly.
And here’s an obvious (but often forgotten) tip: If you ever have any questions about a grant’s requirements, just reach out to ask! You’ll get your answer and let the funder know you exist.
What You Need to Get Started with Grant Writing
To sum up, here’s what you’ll need to start making grant writing a priority for your nonprofit:
- Training. Even a little counts. Online grant writing classes, free guides, workshops, forums, and more can all help, but prioritize reputable and highly-reviewed resources. If you decide to pay for a training resource, look for comprehensiveness. Some classes may teach you the parts of a grant proposal, for instance, but not how to find the grant opportunity in the first place.
- Organization. Grant seeking has a lot of moving parts. Have a plan for keeping track of the opportunities you find, the repeatable resources (like budgets) that they ask for, and the proposal drafts themselves. A collaborative, cloud-based file-sharing system is usually the best choice.
- Commitment. Again, grant writing is an investment that pays off. It needs time to yield results. Grant proposals need to be tailored to the specific funder and opportunity; while this takes more time, it drastically increases your chances of success, which is a fair trade-off!
Grants give nonprofits the funding, diversified budgets, and connections they need to thrive. A growing organization that excels at grant writing will quickly stand out as an active, engaging member of its community. Why not make that your nonprofit?
COMMENTS