Grants for non-profits are not one-size fits all. When writing a grant proposal, you must know ...
If you ask for a capacity-building grant when you need a general operating grant, the foundation could (and probably will) ask for their funds back.
The money has to be spent according to the specifications of the grant. And, the specifications are determined by the type of grant that’s being awarded.
Once you've established the type of grant your organization needs, the next step is to research foundations and match your funding need with the types of grants they offer.
Asking for a general operating grant when the foundation only funds capacity-building initiatives tells the grant reviewer you didn’t do your homework.
You didn’t research the foundation directories. Or, you didn’t look through the foundation’s annual report, website, or guidelines to find out what type of grants they will award according to their funding priorities.
Writing a grant proposal that matches your funding need with the appropriate type of grant being offered increases your chances of being awarded a grant.
There are eight types of grants for non-profits that are typically awarded through foundations. Each type addresses a specific funding need.
Capacity-Building Grants allow non-profits to operate more effectively and professionally.
Capacity-building refers to:
Foundations define capacity-building differently.
Some examples of capacity-building initiatives are:
Capital Grants allow your nonprofit to purchase capital assets: land, buildings and equipment. They can also be used to expand or renovate existing property / buildings.
Obviously, capital needs can be costly, and it is difficult to find one foundation to fund the entire need.
Challenge or Matching Grants are just that ... the foundation promises to pay X number of dollars for each dollar the nonprofit raises from other fundraising channels.
Typically, these types of grants are one-for-one (i.e., one dollar is given for each dollar raised), but you can find two-for-one, etc. The foundation sets the parameters.
Endowment Grants enrich a nonprofit's investment fund.
An endowment fund is a restricted investment fund. Nonprofits use the interest from the principal to support the organization or a specific program.
General Support or Operating Grants support a nonprofit's day-to-day operations.
It can be a little more challenging to find foundations willing to award general support grants. But, I guarantee they are out there. Many foundations realize nonprofits have to be able to pay salaries and keep the lights on in order to provide quality programs.
Project Grants are restricted to a specific project or program.
Seed Grants are used to start new programs or start a new nonprofit organization.
Unrestricted Grants allow nonprofits to use the funds where most needed.
Knowing the different types of grants for non-profits and what type your organization needs is at the core of successful grant writing.
8 Types of Foundation Grants
3. Challenge or Matching
5. General Support or Operating