Whenever nonprofits turn the corner on a new calendar and/or fiscal year, it’s a great time to assess revenue streams and strive for benchmarks in the months ahead. To establish a diversified funding base, most nonprofits seek out grant funding opportunities. After all, grants are essentially free money for your organization!

Acquiring grant funding comes with challenges, though. Grants are often highly competitive, and all have unique parameters and reporting requirements outlined by the funders. Many people need help just knowing where to look to find good funding prospects.

In this article, you will learn the basics of getting started, tips to assess whether a funder is a good match for your nonprofit, how to optimize your search efforts, and where some of the best places to find grants are—both online and in your network.

Before you begin typing away in the Google search bar to locate funders for your nonprofit, it’s helpful to review some of the basics to ensure you’re off to a good start in your search.

1. Understand the distinction between grants and other types of funding.

Nonprofit organizations sustain themselves and eventually build capacity by utilizing many types of funding sources. Private donations, business sponsorships, contracts, loans, and grants make up the repertoire of contributions. Grants are attractive sources of funding for nonprofits because unlike loans, grants are dollars that do not need to be paid back. Rather, they are best understood as investments in furthering the organization’s cause.

Grants tend to be larger in size than most private donations, and unlike sponsorships do not typically necessitate any kind of reciprocal promotions. While a contract usually pays for work or services on a completion or reimbursement basis, grant monies are typically dispersed before work occurs and are used to fund future projects.

2. Understand the types of grants available.

There are many places you can look to for grant funding for your nonprofit. It’s helpful to acquaint yourself with the different types of grant makers available.

Philanthropic Community Foundations: These groups are typically dedicated to investments in bettering their community or furthering a cause in accordance with their own mission.

Family Foundations: These are generally family estates in which funds, like above, have been dedicated to vested causes or community interests.

Government: Local, county, and state grants are often available for targeting certain needs or are for assistance in response to widespread issues (think COVID or disaster relief grants). Other examples are federal or state grants for community development, urban renewal, or other needs.

Humanities, Arts, Science, Technology, and other special categories: These grants are for projects and organizations to further investments in arts, culture, education, science, etc. (Example: Nebraska Council for the Arts, National Institute of Health, many others).

Business and Corporate: As part of their social responsibility and commitment to the communities that they do business in, many companies offer grant opportunities. Larger corporations may have subsidiary foundations or internal application review panels who will distribute grant funds to nonprofits working in their focus areas. Most corporations will have information about these opportunities on their websites. With larger companies, it is often helpful to contact a local office or branch.

You may find this list of grants helpful as a starting point for you in your search.
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3. Perform a grant-readiness evaluation.

Now that you know what a grant is, it may be tempting to jump at the prospect of free dollars. But nonprofits must also first take stock of their overall stability. To be attractive to grant funders, your nonprofit should be able to affirmatively answer the following:

a. Does your nonprofit have a clear mission?

b. Does your nonprofit have sound financials?

c. Does your nonprofit have a leadership team that reflects the population served?

d. Does your nonprofit have outcome data and/or evidence for its model?

If you hesitated to answer “yes” to any of the above, you may need to work on some of the nonprofit basics first. The most successful nonprofits are not built on passion alone but rather on sound business principles. For more information on these basics for nonprofits, check out the resources page from The National Council of Nonprofits and our ultimate readiness guide.

Once your nonprofit has the basics down, you will have better outcomes on your search. In the next section, we will jump into the grants search process and how to land good funding matches for your nonprofit.

Just like any relationship, you want to make sure your organization is a good fit for a particular grant. Grant applications often take several hours to complete, are highly specific, and are competitive. Therefore, you want to make sure you’re using your time effectively so that you have the optimal chance of getting approved.

Here are a few questions to consider and tips to better help assess your fit.

Does your nonprofit match the service area, population served, and other requirements?

Sounds simple, right? But most of the time you have to read into the grant application details to see if your organization qualifies. For example, does the grant only apply to organizations serving a certain zip code or demographic?

Government grants often have regulations that spell out certain criteria for income levels, percentages of poverty, etc. Other grants may have criteria such as age or gender of population being served. Or they might stipulate that an applicant is a woman-led or BIPOC-led organization. Each grant application will call for different requirements. Make sure you meet these requirements before you invest energy in applying.

Taking a look at the below example, it wouldn’t be practical for us to apply for the Brittingham Family Foundation Grant if we were not located out of California or Colorado, since it’s a clearly stated desired service area.
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Similarly, if our project didn’t fall into education / outreach or project / program, we’d likely want to continue searching for a better fit opportunity.

Instrumentl consolidates this information to make it easy for you to quickly identify well-aligned opportunities.

Does the grant align with your mission?

Like above, make sure that your nonprofit is searching for grants that align with its mission and not the other way around. Often desperate or newly developing nonprofits resort to a “chasing money” strategy. They craft programs around a particular grant opportunity rather than establishing their services and then seeking the necessary funding. If this is the case, you might have to backtrack and evaluate the prerequisite steps outlined in the grant readiness section at the beginning of this article.

If you are seeking project funds (described in more detail below) ensure that the project you are proposing is aligned with both the mission of your nonprofit and that of the grant maker and that it is fulfilling a need in the community.

Are you seeking project-based funding or money for general operations?

While it is not uncommon for grants to cover general operating costs, the increasingly competitive grant market is becoming more project specific. This means rather than using the grant money for general organizational costs (rent, utilities, personnel, equipment, etc) grants are often earmarked for more targeted projects.

Many new nonprofit leaders and grant writers do not fully understand the difference between what is considered general operations funding and what is considered "project" funding. As a result, they either falter on the application, or if awarded, on the grant report.

Not sure if your organization is in need of project funding or general operations funding? Or need help identifying the difference between the two on an application?

An example of a project-based application from the Connecticut Health Foundation is pictured below. Compared to a general operations request, the application will often require a more descriptive explanation. And, if approved, project-based grant money tends to have much more detailed reporting requirements.
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What is your nonprofit’s timeline for acquiring funds?

Though a worthwhile investment, the grants process is not quick! It often takes weeks or months to hear back on a decision about a grant application. And then, only after approval, it may take several weeks more to see the check.

In our culture of overnight delivery, it is helpful to recognize that the grant process takes a long time. Your organization needs to plan their projects or overall budget accordingly and seek out funding opportunities which coincide with those needs.

While just typing into the search bar may lead to some hits, you can be more strategic and efficient by using these suggested search options:

1. Government and municipal funding

Looking to see if your organization or program qualifies for federal dollars? Grants.gov is a great free resource to find government funding opportunities. For grants that may be closer to home, check the websites for your local municipality, county, or state.

2. Free grants databases

Your local library may be a great resource to access grants databases. Libraries often purchase access licenses that you’d normally have to pay for. For example, a local library in Colorado provides patrons with access to CRC, Community Resource Center, and its Colorado Grants Guide that you can even access from home as a library member! Check with your local library branch or university library to see if they offer such services.

You can also check out websites like the Council on Foundations which offers a state-by-state directory of foundations. Additionally, you can make connections with your state nonprofit association which may be able to help in your grants search. Check out the National Council of Nonprofits online directory to find information on your state’s association.

3. Paid services

If your organization has the means, it is often helpful to use a paid service that provides grant matching and other resources. Instrumentl offers subscribers many tools for the entire grant lifecycle, from targeted matching to grants management software and reporting forms. Instrumentl even offers a free 14-day trial for prospective subscribers.

Instrumentl holds the most comprehensive grants database with over 11,000 funders and new funders being added every day!

But it's database is just one feature that makes Instrumentl stand out among its competitors. Recognizing that efficiency is key when it comes to finding and managing grants, Instrumentl offers an array of useful services for nonprofits including the following:

1. Grant and report deadline reminders: Instrumentl saves your searches, tracks your applications, and even gives you deadline updates on opportunities so you never miss a chance at funding.
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2. Intelligent grant matching: No more combing through random search results to find funding! Based on your organization, project description, or past awards, Instrumentl provides you with a list of potential funders and grant opportunities that are a good fit.
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3. Workspace for projects and team members: No more starting from scratch on each application or having to email info to other team members. Instrumentl allows you to easily save searches, set up projects, and collaborate with colleagues all in one platform!
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If intrigued, you can learn even more about what differentiates Instrumentl from any other grant tool here!

4. Board members

One of the primary responsibilities of any board is its fiduciary oversight of the nonprofit. Therefore, your board members should be actively engaged in fundraising and contributing to the grants process.

Since board members are often well-connected in areas outside of the nonprofit realm, ask them to identify best places to find grants in their respective fields – business, philanthropy, government, and education.

5. Networking with other nonprofit and civic leaders

Does your community hold events for nonprofit groups or networking nights? If so, mingle with fellow nonprofits to gain more insight into opportunities in your community. You may discover grant opportunities simply through word of mouth.

Also, keep in mind that grant reviewers love to hear about partnerships! Is there a nonprofit with whom you could collaborate on a shared project and funding request? Many high-dollar grants are awarded to nonprofits who work in tandem with either municipalities or another partner nonprofit. There's also a host of private-public partnership opportunities out there!

6. The business and economic sector

Many people forget that nonprofits are businesses and operate in the private sector just like many other for-profit businesses. It is always helpful to check with your local business alliance group or Chamber of Commerce. There are often grant opportunities open to both for-profit and nonprofit businesses alike, especially for targeted relief and support during the continued pandemic.

1. How do I find out about grants?

If your role is not specifically a Grant Writer or Development Director, then it will be necessary to carve out time in your schedule to search for and pursue grants. If you are an Executive Director or CEO, at least a quarter to a third of your time should be dedicated to fundraising, including finding and applying for grants.

Make time each week for grant research using the tools outlined above. Set up a recurring event in your calendar and dedicate the necessary time to seek out grant funding. When you subscribe to Instrumentl, you’ll be able to set up a project so that the software can maintain an active grant search for you. This means whenever a new grant opportunity comes up that matches your nonprofit’s programs or initiatives, you’ll be notified!

2. How do I qualify for larger grants?

When applying for larger grants, it is helpful to have a demonstrated successful record of acquiring and managing smaller grants. This gives the grant application reviewers reassurance that your organization will be good stewards of their funds. Start out by seeking smaller grants. Make sure to fill out grant reports accurately and timely. Then, after success with these, move on to larger grants.

Another strategy to take on a larger grant is to partner with another organization on a project and grant proposal. Especially if the collaborating organization is more established, you may have greater success at acquiring larger grants more quickly than going into it alone. Plus, grant reviewers love seeing partnerships to achieve common goals!

3. What are the best grants to apply for?

The best grants to apply for are the ones that best align with your organization’s mission, timeline, service area, and intended use. Many new or struggling organizations see a grant opportunity and try to craft their organization to fit the opportunity. This usually ends up detracting from their mission or stretching their capacity. Over time, successful organizations will gain a solid pulse on not only available opportunities but those for which they are good matches.

4. What rules govern federal grants?

Federal grants have their own set of rules and regulations, and each opportunity will have its own guidelines and criteria. Overall, federal grants will often be more stringent in their criteria for acceptance and will have more detailed reporting requirements than foundation grants. On the flip side, government grant awards are often much larger in size than foundation or private grants.

A great way to start the year is to expand your knowledge and reach in the grants search process. There are many opportunities out there just waiting for a good match! Whether it’s through search engines, paid subscription services, or networking with your community colleagues, finding funding takes a diversified effort, but the results are worth it!

For more helpful information, check out the best websites for grantseekers and expand your funding reach by learning how to get noticed by invite-only grant funders.