Grants. They are somehow simultaneously the best and the most challenging parts of nonprofit life.
On the one hand, there are organizations in this world that exist just to give money to causes like yours. That’s amazing.
On the other hand, figuring out how to get that money when you need it for the things you need … well, that can feel like an impenetrable secret.
If you are new to the world of grants and foundation funding, consider this your introduction. We’ll explain what grants are, who gives grants, how to find grantmakers, and how to ask for money. We’ll also explain how grants do (or do not) fit into your fundraising mix. By the time you’ve finished reading this, you should feel ready to find and apply for your next (or first!) grant.
Let’s start at square one. What exactly is a grant? It’s a fair question.
Grants are a type of donation. Talking about donations can be confusing because people use so many different words to say the same thing. Basically, “donation”, “gift”, and “contribution” have the same meaning — someone is giving you money to spend on your work.
Gifts are unrestricted by default. You have freedom to spend the money however it best serves your mission.
When a donor requests that their money be used for a specific project or towards a specific goal, the funds become restricted. You must spend the money in ways that match the donor’s expectations. A “grant” is the word we often use to describe restricted funds and their purpose.
In Canada, government often calls grants “transfer payments”.
Like many different types of fundraising, the world of grants has its own vocabulary.
A “grant” is the money you receive for a specific purpose. The organization that gave the funds is a “grantmaker” or “grantor”. The organization asking for funds is a “grantseeker”. When the grantseeker receives a grant, they become a “grant recipient” or “grantee”. A written request for funds is a “grant proposal” or a “grant application”. The person who writes the request is a “grant writer”. The written document that summarizes how the funds are supposed to be spent and the purpose of the project is a “grant agreement”.
Basically, grant people are like Smurfs or McDonald’s. We slap “grant” on everything like it’s “smurfy” or “Mc” to make it our own.
The first step is kind of like dating. You are looking for someone who might be interested in you. They are looking for people (and projects) that interest them. Both sides want to find the best possible match.
Next comes an application stage. This can be as simple as casual meeting where you describe your work and ask for support, or it can be a multi-step, formal written competition.
Grantmakers review the requests they receive and decide which ones they want to fund. They will get far more requests than they can actually support, so they’ll look for applications that match their interests and their budget.
Then the grantor tells a grantee “congratulations, we approved your grant!” Sometimes the original application becomes the “grant agreement”. Other times, the grantor gives you a formal agreement to sign before they release the funds. In a formal agreement, the grantor usually specifies if and how the grantee should acknowledge their financial support and how often you are the grantee is supposed to report on the project.
The grantee spends the money according to the grant agreement and submits whatever reports the funder requested. At a minimum, grantees should plan on submitting a report at the end of the project explaining how things turned out.
Often, the more money you request, the more elaborate the grant process becomes.
It is possible for grantors to reach out to grantees directly and offer them funds, skipping over the application stage. That’s the equivalent of money falling from the sky; it’s lovely if it happens but don’t wait for it.
The first step of the process – finding grantmakers – is the hardest for people who are new to this field. The best place to start is with foundations and government. Other charities can give money. So can individuals. For-profit companies can give away money, too. But foundations and governments give most of the grants, so you should start by getting to know them.
If you aren’t working in field closely connected with government and you are new to grants, it’s best to focus specifically on foundations. Their grantmaking programs are more consistent, and it is easier to find application opportunities online. Government grants tend to reflect current government priorities, which can change year to year. Government also earmarks many grants for partners who deliver services that are part of core government programs (e.g., health or social services).
A foundation is a non-profit corporation whose purpose is to redistribute money.
Just like other charities, foundations are supposed to spend their money in ways that achieve their specific public interest goals. Generally, foundations can only give funds to other charities, nonprofits, and qualified recipients like First Nations or local government groups.
That’s the practical, helpful answer.
Legally, it’s more complicated.*
Both Canada and the US distinguish between “public” and “private” foundations. A person, a family, or a company controls a private foundation. Public foundations operate independently. It’s helpful to know which type of foundation you are talking to because it helps you understand their interests, motivations for giving, and decision-making process. (But it’s not essential.)
Not all foundations give money, and you can’t always tell by an organization’s name whether they give grants. In the USA, for example, public charities and public foundations are the same thing. Private foundations may be “operating” foundations that run their own programs , or they may be “non-operating” foundations that give out grants. Meanwhile in Canada, plenty of charities have the word “Foundation” in their names but are regular charities. It’s more important to focus on organizations with a history of grantmaking than to understand their legal foundation status.
This is why grant people invented the word “grantmaker”. It’s easier to talk about organizations that give grants than to figure out their corporate status.
For the purposes of fundraising, just focus on grantmakers – people with a history of giving money – and don’t worry about the corporate structure stuff.
This isn’t crucial to your grantwriting journey, but at this point it feels like we’re all wondering the same thing: where does all this money come from?
Sometimes a wealthy family donates a chunk of money to start a foundation. Sometimes a corporation transfers a portion of its annual revenue to a foundation on an ongoing basis. Sometimes government programs direct money to a foundation, such as foundations that distribute lotto and gambling proceeds. An independent foundation may also deliver a government-funded grant program designed to achieve a policy objective. Sometimes a foundation brings together donations from a variety of families and businesses, like a community foundation or a pool of donor-advised funds.
The bottom line is that the purpose of grantmaking is to redistribute money from people who have it to people who need it. This is part of what makes grantseeking unique. You aren’t asking people to support your cause as a favour. You’re speaking with organizations that have to give money away. This is their job. This is their purpose.
They want to give. You want to do your work. It’s a natural partnership.
When you are new to this, figuring out who might give you a grant can definitely feel challenging. This stage of the grant process heavily favours people who know funders, either from past work experience or personal connections. If you are starting from scratch, your only option is trial-and-error and persistence.
You can approach grantseeking like dating, if that’s helpful. You’ll find grantmakers in all the same places you might find a date: online, at events, and through your friends.
Also like dating, grantseeking takes time, the misses can be discouraging, and you can’t control what the universe has to offer. On the other hand, enough people seem to be succeeding that it’s worth a try.
Start with your own network. If someone who understands your work thinks you suit a grantmaker they know, that’s the ideal place to start. Getting a reference doesn’t mean you’ll get the grant, but the fact that someone saw a potential match definitely points you in a promising direction.
If you are attending meetings and conferences and other networking events in your field (in person or virtually), keep your eyes peeled for grantmakers. They usually attend events they fund and they usually keep tabs on new and exciting activities in the field (that’s you). Talking to grantmakers personally will help you understand what they are funding, how they see priorities, and how their grantmaking process works.
Look for funders online when you don’t have recommendations from your network, don’t know any funders personally, or when you want to increase your options. A free and easy place to start is with a basic search for foundations in your community or field. Another place to start is by looking at the websites of organizations who do similar work.
If you have a bit of money to spend, you can subscribe to grant databases that list funders, giving histories, applications deadlines, and missions. Those can be invaluable tools for identifying prospective grantors. If you’re serious about getting grants, even a one-month subscription to a database will save you a year’s worth of work.
Government services also publish foundation names and giving histories online. You can see who is on the board, how much money they have, how much they give out each year, and what organizations they are funding. Those sites aren’t always easy to browse, but they are free.
The process of finding grantmakers and putting their names on a list (or in a pile of sticky notes on your desk) is called “prospecting”. Basically, you’re trolling the world looking for possible funders and taking names.
Once you start looking, you realize that there are more foundations in the world than you could possibly apply to, even if you lived three lifetimes. On top of that, you you can’t wait a hundred years to get your first grant. So you’ll need to prioritize.
The process of studying those grantmakers and seeing whether there is a match with your work is called “Qualifying”. Basically, you’re trying to rule out grantmakers who are unlikely to fund your work and identify the ones who seem like the best fit. This is why asking your network and chatting with funders in your field is so helpful – it’s the fastest way to figure out if there is a match between your organizations.
Over time, you become familiar with different funders, their funding deadlines, and their interests. You’ll be able to prioritize naturally, without even realizing you’re doing it. In the beginning, everything is new. Everything is possible. Everything needs to be considered.
Qualifying is the most mysterious of grant arts. There’s no perfect, universal formula for how to find the right match, but there are some basic criteria you always need to consider:
Geography: You should only apply to grantmakers who give grants in your geographic area. Many grantmakers only give within their own countries or have a specific community where they focus. If you aren’t in their giving area, you probably won’t get a grant.
Interest: Grantmakers generally give to specific issues, like environment or youth. For example, if you do cancer research then don’t waste time applying to a foundation that only funds music education.
Use of Funds: Some grantmakers only fund specific types of expenses, like advocacy or conferences or supplies. If you need money for labour, then you shouldn’t apply for grants that can only be used to purchase supplies and materials.
Organizational Status: You also need to make sure that your organization status matches the grantmaker’s ability to give. Some grantmakers (e.g., government) are able to give to all kinds of organizations. Others (e.g., charitable foundations) can only give grants to other charities. If you don’t have the right kind of organization status, you won’t get the grant. (All is not lost, though. You can find a partner and apply with them. See below.)
Once you’ve got a shortlist of grantmakers whose giving interests match your program needs, it’s time to make some asks.
Most of this article focuses on finding and applying for grants on your own. The truth is, many funders prefer to support collaborations. They like to know that organizations are familiar with other leaders in their field and that efforts are not being duplicated.
If you team up with other grantseekers, you can speed up your learning process. You’ll get an inside look at how established organizations seek grants, and their reputation and experience will help open doors to funders. Just make sure that you are bringing talent, ideas, or resources to the table that are unique and valuable to your collaborators.
Your participation in the project should increase your partner’s impact, help them do something they couldn’t do without you, or lower their expenses and workload.
Grantmakers usually tell you how to apply for grants. They put the information right on their website. Many grantmakers have specific deadlines, ranging from 1-4 times a year. Many want you to use a specific form or online portal. Read and follow their instructions carefully.
Some applications are very simple. A grantmaker may ask you to email them a few hundred words to describe your work and see if there is a possible fit. Other applications are incredibly elaborate. It’s not uncommon to write 10-15 pages describing your project, your organization, and the project’s financial details.
The purpose of a grant application is to help funders figure out which projects appeal to them most. The applications also help funders make sure that the organizations and projects they fund satisfy their own legal requirements. Just like you, funders – especially foundations – have legal restrictions on how they spend their money. They also have an obligation to prove that they are spending money responsibly.
For the grantseeker, the application is your chance to help a funder say “yes” to supporting your work. Your job is to make it easy for them to understand what you do, why you do it, and how they can help.
Grantwriting appeals to people who like to organization information and who are comfortable making timelines, connecting activities to budget line items, and differentiating between outputs and outcomes. Grants feel very logical and very rational.
In many ways, funders also look at grant proposals from a logical and rational perspective. They even apply a vaguely mathematical formula: which proposals offer the greatest return on investment (impact) per dollar spent? They want to achieve the greatest impact with the money they have to give.
On the other hand, it’s not a pure meritocracy. Organizations with familiar brands or familiar leaders may have more credibility. Because they are familiar, they may be given the benefit of the doubt or their projects may simply be understood more easily. An application that is well-written may be such a relief to a grant reader that the project seems like it’s better. An application that arrives first thing in the morning may be received better because the person reading it is fresh and engaged. Projects with tangible outcomes or emotional outcomes may appeal to funders more easily than projects that address systemic or complex issues. And of course gender, race, geographic, cultural, and economic biases and stereotypes influence funders’ perceptions of a grant proposal.
Basically, there are a million reasons why your incredibly logical, well-written, thought-out application may be accepted or rejected in the blink of an eye. That’s another reason why prospecting, qualifying, and relationship-building or so helpful. If you’re going to be ignored, it’s nice to know before you’ve written a 15 page proposal. And if there’s a chance you’ll be funded, it’s nice to know what information and approach are most likely to inspire a funder.
The best grant partnerships are a solid mix of rational merit and emotional engagement.
You’ve probably noticed that it’s impossible to talk about grant proposals without talking about “projects”. That’s because grantmakers very rarely fund an entire organization’s work. Grants are usually focused on a slice of the work, and that usually means a project.
A project is a series of activities that build towards a single purpose, and it has a defined start and end date.
There are good and bad things about the world’s obsession with projects. Critics of project funding often point out that this approach can stifle creativity and innovation and emphasize short-term results at the expense of long-term and systemic change. You don’t want to fall into the trap of pitching bad project ideas just to get funds, so it’s worth being aware of people’s concerns.
For now, just think of a project as an effort to ensure accountability. Are you seeking funds to do work that has a clear link to your theory of change? What is supposed to be better in the world as a result of the work you plan to do? How will you know if your work is leading to the impact you’re hoping for? Why should your work be funded instead of someone else’s? These are all practical questions that both you and your funders have to answer.
If you can’t explain your work in terms of projects, then you are unlikely to secure many grants.
When someone gives you a grant to support your work, it feels incredible. Especially when the grant is large enough to fund a whole project or distinct aspect of a project. It provides a rare bit of certainty and clarity so you can put your head down and do the work you love.
There are two downsides of grants that mean you never want to rely on them for all your funding. First, it’s that project focus. If you have a professional organization, you are going to have expenses that don’t tie directly to a specific project or fall outside of a grant’s restrictions. It could be rent, the salary of your executive director, your communications work, or project supplies. Whatever it is, you have to figure out how to pay for it to do your work. Having unrestricted funds from individual donations, sponsorships, events, merch sales, and other non-grant sources allows you to fill in the gaps that grants don’t cover.
The other downside to grants is the lack of control you have over your own success. You can’t control how many grantmakers support your cause. You can’t control how much money will be set aside for your cause. You can’t control when funding decisions will be made.
If you’re doing cutting edge work, systems change work, or platform-related work, you may find yourself a few years ahead of many grantmakers. They may not yet have grants geared towards your work because they’re still learning about the issues you face or the solutions you propose or the urgency of your cause.
If you’re trying to create social change, there is a pretty good chance that this lack of control will be frustrating. You won’t want to give up on your mission just because the grants aren’t coming through. That’s not your style.
You need to have a grant strategy, but it should be one part of a balanced fundraising plan.
You can make some educated guesses about what to expect from grantmakers by looking at a few data points.
The percentage of grants given to organizations like yours will tell you whether you are in a popular grantmaking field. For example, religious charities in the USA received 30% of all gifts in 2018, while environment and animal charities received 3%. (Source) If you are running a religious program, you probably have more funding prospects. On the upside, when there are only a few funders interested in your issues, it can be easier to identify them and develop a relationship.
The average grant given to organizations like yours will tell you, well, what the average amount of a grant is. It can help you calibrate your expectations so you’re not aiming too high or too low. If you aim too high, your grant proposals will be rejected because funders truly don’t have enough money to support your work. If you aim too low, you’ll spend too much time writing proposals and grant reports and it will be hard to get your mission work done.
The total revenue from grants that your peers are earning also gives you a sense of what’s “normal” in your field. That gives you some guidance for planning your fundraising activities.
Basically, if there are a lot of funders and a lot of grants in your field, you can set a higher fundraising goal for grants. If the money and the funders just aren’t out there, you won’t waste time chasing ghosts. You can focus on other fundraising activities that are likely to generate better results.
You don’t have to walk alone in the grantseeking world. There are several communities, training programs, and digital tools to help you.
If you want to find grantmakers, look for a grants database. This blog post from Alexis at LearnGrantWriting.org reviews the top 10 US-based grants databases. Grant Connect from Imagine Canada is my go-to resource for Canadian grantmakers. These services all have subscription fees, but if you are going to focus on grant writing they are invaluable. Even if you just subscribe for a brief period of time to get to know the grantmaking world a bit better, it’ll be worth it.
If you want training, there are one-off courses from organizations like Charity Village, the usual suspects like LinkedIn Learning and Coursera. If you are interested in more formal training, many universities and colleges offer specialized certificates in nonprofit fund-raising and grantwriting. Several more private training programs are a google search away.
You may also want some company and to feel connected to other grantseekers. The Community-Centric Fundraising community is one example of a group of fundraisers who have a lot to share and are committed to equity and social justice values. If you’re going to be fundraising full-time, you may want to consider investing in accreditation through the Association of Fundraising Professionals. They also offer conferences, training, and peer support.
Whether you are looking for friends, cheerleaders, mentors, or professional coaching, you have options. Grantwiting may feel like a solitary experience sometimes, but you are most definitely not alone.
Phew. That’s a lot.
Entremission is working on a tool that will help you with the prospecting and benchmarking to make fundraising planning easier. In the meantime, we’d love to hear from you. Was this helpful? What did we miss? Email us or holler @krystynt on Twitter.
* None of this is legal advice. I can hear charity lawyers wincing at the lack of precision. I’m okay with that. The goal is to help you get a grant, not to turn you into a lawyers.