What is a Nonprofit Grant?

What is a nonprofit grant?

A nonprofit grant, sometimes referred to as a fundraising grant, is a financial donation given to an organization. Grants are typically given by a foundation, corporation, or government agency. Many nonprofits are partially or even entirely funded by grants they receive throughout the year.

Grant organizations, also known as grantmakers, are the foundations, corporations, or government agencies that provide the funding for grants. They usually specify how their gift should be distributed. Rather than giving a lump sum donation that the nonprofit can use to support general operations, grant organizations may stipulate that they want the funds to be used to support a specific program or initiative.

How do nonprofits benefit from grants?

Because grants typically come from large, established organizations, they are often much larger gifts than those that come from individual donors. Large, one-time gifts like grants can give your nonprofit the push it needs to fund a much-needed program or purchase essential supplies or equipment. This can bring your nonprofit into a new phase of growth, attracting increased attention and new donors.

Grants also build your nonprofit’s visibility and credibility. According to the Society for Nonprofits, once you receive one grant, you are more likely to receive others. In other words, once grantmakers see that other notable organizations have given to your cause, they are more likely to give to you themselves.

How do nonprofits get grants?

To secure grant funding, you must know how to find these opportunities. This starts with performing relevant searches based on your organization’s mission and future plans. You’ll want to consider factors like geography, grant type, your mission, the types of services you provide, and your target audience. From there, it’s a matter of conducting research using state, general, and online resources.

Before you can receive a grant, someone must submit a grant proposal on behalf of your nonprofit. This person can be a staff member or an outside writer that you hire to write the proposal. Typically, the grantmaker will have a list of requirements or documents that your nonprofit needs to meet or submit, as well as an application you must fill out. Your proposal includes anything the grantmaker requires and broadly lays out why you need the support and what you would use the funds for if you received the grant.

Once the grant proposal is written, you submit it to the grantmaker. The grantmaker then reviews and either approves or denies your grant application. If they accept your proposal, they will deliver the funds to your organization.

What are the most common types of nonprofit grants? 

As mentioned above, grants are typically awarded by foundations, government agencies, or corporations. Let’s take a closer look at each of these types of grants: 

  • Foundation grants. Foundations are nonprofit organizations or charitable trusts that fund and support other nonprofits. They can be private or public organizations. Private foundations are generally funded by an individual, family, or corporation and don’t seek donations from the general public. Meanwhile, public foundations are charitable grantmaking organizations that receive funds from the general public. 
  • Government grants. Nonprofits can receive grants from the government at the federal, state, or local level. Government grants are widely available, and you can research these types of grants using free resources like grants.gov
  • Corporate grants. Some companies offer grants to nonprofits that have similar missions to theirs. Examples of businesses that offer corporate grants include Walmart, IBM, and Verizon. Companies may also offer corporate giving programs such as volunteer grants in which they donate to nonprofits where their employees volunteer. 

Grants can also have certain restrictions or conditions. Different types of grants your nonprofit might receive include:

  • Conditional grants. A conditional grant requires a nonprofit to fulfill certain conditions before it can gain access to the funding. This contrasts with an unconditional grant, where the nonprofit can receive the funding immediately. The condition might include following certain reporting procedures or raising a specific amount of money that the grantmaking organization will then match. 
  • Research grants. This type of grant funds research projects. If your nonprofit is engaged in academia or conducting research in your field, it could be worth looking into applying for a research grant. 
  • Project grants. A project grant is funding that’s restricted to a certain nonprofit project or program. To maintain grant compliance, your nonprofit will need to maintain transparency and only use the funds for the specific project you outlined in your application. 
  • Capital grants. A capital grant provides funding for facility and equipment costs. Governments typically offer these types of grants to help nonprofits improve local infrastructure or living conditions in the community.

Who is a grant writer?

A grant writer is a person responsible for crafting grant proposals. Although these writers often have an educational background in English, writing, or communications, anyone can write a proposal.

To create the most compelling proposal possible, grant writers need to have a firm grasp on the nonprofit’s mission and the needs of the community being served. They also need to be familiar with the grantmaking organization so they can speak specifically to their values, motivations, and interests.

Do you need to hire a grant writer?

Some nonprofits have employees who are skilled at writing grant proposals while other nonprofits will contract outside writers. To determine if you need to hire a grant writer, consider your bandwidth and your budget.

Ask yourself if someone on your team can take on the responsibility of researching and applying for grants. If not, you may want to hire an outside person to write the grant proposal for you or consider bringing on a staff member whose responsibilities will include researching and writing grant proposals.

To decide whether to bring on a full-time staff member, consider your budget. It may be more financially beneficial to outsource the job to someone on a contract basis.

If your nonprofit wants to outsource the work, we recommend reading CauseVox’s guide on how to hire a grant writer

What is grant management software?

Grant management software is a type of nonprofit software that allows nonprofits to easily manage the grant application process from one location. These programs often include features to help simplify your workflows, such as task reminders and the ability to assign responsibilities to various users. The software may also allow you to store the contact information of funders you may be interested in working with in the future.

What is the best option for grant management software? 

If you’re interested in investing in grant management software to streamline grant-seeking, spend time finding a user-friendly tool that integrates with your existing donor management system. This will allow you to keep track of all fundraising activities under one roof. 

With that in mind, let’s explore our favorite option for grant management software. 

Bloomerang Grants

Bloomerang is an all-in-one donor management software that also makes it easy to track and manage grants from the same system you use to manage donor relationships. This eliminates the need to manage each fundraising and grant activity from separate spreadsheets or systems. 

Bloomerang’s grant management features also include: 

  • Simple reporting tools that make it easy to view grant deadlines and payment information at a glance. 
  • Relationship tracking features that help you identify connections between individuals within your organization and grantmaking organizations. An introduction from a loyal donor or long-time board member can help you make a good first impression on grant funders. 
  • Unlimited custom fields that allow you to create customized reports and tracking processes. 
  • Task and interactions management that allows you to track important benchmarks, including application deadlines or progress report due dates. You can also track your communications with your funding organizations, ensuring you have a complete record of past interactions. 

Bloomerang’s grant management system also allows you to create a Sustainability Scorecard. This is a data analysis tool that lets you provide grantors with transparency into the state of your organization’s finances and the progress you’ve made toward your goals. 

The bottom line

Nonprofit grants provide additional funding and help increase awareness of your mission. In addition, grant management software streamlines the grant process, helping organizations stay organized and fulfill all grant requirements. 

For more information about nonprofit grants, review these additional resources: