10 types of nonprofit grants & how to qualify for funding

If your nonprofit is not currently pursuing grants in earnest, we’re here to tell you that it’s time. And if you are already pursuing and receiving grant funds, then it’s time to ramp up your efforts. After all, every grant your organization applies for increases the potential to serve your community, while every opportunity you don’t seek can leave money on the table.

But for many nonprofit boards and staff, finding and applying for the right opportunities can be overwhelming, and you likely have a fear of missing out — not finding the right funders and the right funding types on tight application deadlines.

Grant-seeking is a complex, detail-oriented process, but it’s manageable. We’re here to walk you through the possibilities and share how your organization’s board management software can help with nonprofit grants.

Government grants for nonprofit organizations

When the topic of grants comes up, most people think about foundations — understandable, given that foundations contributed an estimated $103.5 billion to U.S. charities in 2023.But an excellent place to start is with the government, where awards approached $2 trillion the same year.

Grants.gov is a U.S. federal-government site that allows you to search for federal grants. The site includes a section where nonprofit teams can learn how to apply for federal grants. Nonprofits may also be able to find grants from their state governments or even at the local-government level.

In Europe, funding opportunities for nongovernmental entities can be found in each country or through E.U. programs, and the British government funds NGOs through various channels.

Nonprofit grant opportunities from foundations and beyond

While government grants are a good start, looking beyond to other types of funding is part of a strong strategy. Look for grants from the following types of grantors:

• Public charities like the Cleveland Foundation
• Private foundations like the Bill & Melinda Gates Foundation
• Federated funds from entities like the United Way
• Corporate grants such as Microsoft’s programs

Another example of a corporate program is Google Ad Grants, which allocates a budget for paid search placement for nonprofits. Eligible nonprofits can access up to $10,000 a month to pay for ads in Google’s search results.

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10 types of nonprofit grants

Here are 10 different types of grants your board can apply for. GrantWatch.com can be a good source for identifying specific types of grants for specific needs in your geographic area.

1. Start-up grants or seed money grants

Start-up grants are hard to come by, but they exist. Typically, grantmakers want assurance that a nonprofit is established and capable of raising some amount of funds on its own. Few grantmakers are interested in helping new nonprofits get off to a strong start. They often start with a large sum in the first year if you are fortunate enough to find one. For multiyear grants, the amounts typically lessen in subsequent years.

2. Project grants

It’s common for grantors to fund programs and projects for nonprofits. Much as it sounds, project grants support a set of activities connected to a specific program or project. Project grants must have specific objectives, and the proposals usually require nonprofits to outline the spending for grant funds if awarded. These types of grants are usually restrictive, meaning nonprofits may only use them for the intended purpose outlined in the proposal.

3. Capacity-building grants

A capacity-building grant might fit the bill if your nonprofit wants to do more in a particular area but lacks the funds. Capacity-building grants give you the revenue to do more with what you already have and the projects you have already started. Such grants cover the expenses for improving processes instead of funding one program or project.

4. Operating fund grants

Grantors are most interested in funding established and sustainable nonprofits. They generally expect you to handle your monthly expenses without outside financial support. This is why operating fund grants are harder to come by than other types of nonprofit grants. Some nonprofits might request a grant for another line item and reallocate those funds to operating expenses.

5. Research grants

Research grants work differently than most other grants. These grants cover expenses connected with conducting research and are awarded to academia or nonprofit organizations that engage in research. Research grants are usually attached to a particular faculty member for colleges and universities. If the faculty member leaves the school, the grant follows them.

6. Endowment grants

Some foundations manage endowments for nonprofits that earn interest. It’s typical for such grantors also to help nonprofits improve their governance standards and practices. Grantors may contribute funds to the nonprofit’s endowment fund if the nonprofit reaches certain goals or milestones.

7. Facilities and equipment grants

These grants are also known as capital grants. They cover all or part of the costs of a nonprofit’s facilities. Governments at various levels commonly offer facilities and equipment grants for programs to improve highways, provide housing and other similar projects. These grants may also be used to purchase equipment or electronics.

8. Technology grants

While nonprofit boards should have various types of expertise on their boards, they rarely have experts in every area they need. Technology grants can pay for experts or consultants in a particular field such as accounting, financial management, legal, fundraising, technology, marketing or some other aspect of managing the nonprofit.

9. Conditional grants

Unlike other grants where a nonprofit gets awarded a grant upfront, for conditional grants, nonprofits do not receive the funds until they meet the conditions outlined in the approval letter. An example of a conditional grant is a matching grant where a grantor matches a certain amount of money that a nonprofit fundraises. With an unconditional grant, nonprofits receive the funds unconditionally and have no restrictions on how they can use the funds.

10. In-kind grants

Unlike all other types of grants, in-kind grants do not involve money at all. Instead, they relate to a nonmonetary gift such as a vehicle, tractor, computer equipment or other material objects. It’s common for corporations to grant items to nonprofits as an in-kind gift.

Advice on grant qualification for nonprofits

Securing grant funding is a crucial component of sustaining and expanding nonprofit operations. Understanding the qualifications needed to apply for and successfully receive grants can significantly enhance your organization’s chances of success.

Here are some practical tips to help your nonprofit qualify for grant funding:

• Ensure eligibility. Before investing time into a grant application, make sure your nonprofit meets the eligibility criteria outlined by the grantor. This includes aspects like organization type, size, location and the specific activities or programs you run. Reviewing these requirements carefully can save you time and effort.
• Define your mission and goals. Clearly defined mission statements and specific, measurable goals are key to convincing funders that your organization is a worthy investment. Make sure these are not only well-articulated in your application but also align with the objectives of the grant.
• Show good financial health. Most grantors will scrutinize your organization’s financial stability to ensure that funds will be managed effectively. Keeping detailed, transparent financial records and audits can demonstrate your nonprofit’s accountability and capacity to handle funding responsibly.
• Document past successes. Grantors often look for evidence of past successes and impacts. Be prepared to showcase previous projects or programs that have successfully achieved their goals. This can include testimonials, data metrics, case studies or awards.
• Develop strong partnerships. Collaborations with other nonprofits, community organizations or academic institutions can strengthen your grant applications. These partnerships can demonstrate community support and a broader impact, making your proposal more compelling.
• Stay informed about grant opportunities. Regularly research grant opportunities from government bodies, foundations and corporations. Subscribing to grant databases, newsletters and related forums can keep you informed about relevant opportunities as they arise.
• Tailor your proposals. Avoid generic applications. Tailor each proposal to address the specific interests and guidelines of the grantor. Highlight how your project or program aligns with their values and goals, and specify how the funds will be used to achieve desired outcomes.

As Barbara Floersch, Chief of Training & Curriculum, The Grantsmanship Center, points out, “A competitive request for funding can’t be based on assumptions. Good data make all the difference.”

“A competitive request for funding can’t be based on assumptions. Good data make all the difference.” – Barbara Floersch, Chief of Training & Curriculum, The Grantsmanship Center

By following these guidelines, your nonprofit can improve its qualifications and stand a better chance of securing the grant funding necessary to advance its mission. Remember, preparation and alignment with the grantor’s objectives are key.

Best practices for nonprofit grants

Attention to detail is an important quality when seeking grants. Grant-seekers need to be able to keep track of requirements, deadlines and supporting materials, usually for multiple grants at any given time. Some nonprofit boards turn to professional grant writers to make the task of applying for grants easier, but you can also cultivate that skill within existing staff.

More careful work is required once a grant is received, as a grantor will expect to be kept updated on progress made with the grant funds. Each will specify reporting requirements.

It’s best to apply for multiple grants to increase your organization’s odds of receiving awards. It’s inevitable that some grant requests will be rejected.

How your board can use technology to support grant-seeking

The attention to detail and careful organization demanded by grant-seeking make it a good fit for board management software. A solution such as BoardEffect has a number of features that support these processes:

• A searchable document library makes collecting and archiving grant-related materials easier.
• Automated workflows can standardize a process of editing, review and approval, saving time and keeping multiple applications orderly.
• Secure workrooms create a convenient space for team meetings, so contributors can readily discuss grant opportunities and new ideas for fundraising.

Grant-seeking can be a significant effort for mission-driven organizations and their boards, but there are ways to simplify it. With BoardEffect, Diligent offers boards the features needed to support fundraising and all aspects of effective governance. Find out how we can help you.