Grants for Non-profits are an Attractive but Complicated Pursuit
Is there anything as appealing as a large capital infusion based on your mission’s sheer merit and virtue? It’s pretty compelling. That is why every non-profit invests countless hours and dreams into winning grants. But, for many, it feels like a lost pursuit. Rejection is hard, and getting traction in the foundation game can be challenging. That said, there is hope! Roughly one-third of foundations receive less than 50 proposals per year, and 35% of foundations award half of the appeals they receive – those are not bad stats (Candid, 2022)! So, why isn’t your organization winning? Let’s look at the basics of grant writing:
Non-profit Start-up Grants, a.k.a. Unicorn Fuel
I’m not saying a startup grant isn’t possible, but I am confirming that it is not likely. Most foundations require their funders to, at a minimum, have their 501c3 status in place. More prominent awards typically require an organization to be established and in good standing for three years. Beyond that, requirements can include everything from audited financial statements to certificates of good standing with the state of the non-profit’s incorporation. Red tape abounds. Grants rarely fund startups and high-risk projects. Those rare unicorns receiving startup funding are the exceptions; you are likely part of the rule (sorry).
Rather than pitching your organization as the next non-profit unicorn, consider partnering with a like-minded organization that already has foundation relationships and a solid track record. Collaborative projects between multiple non-profits tend to rank ahead of single pursuits in the grants game.
A 501c3 Doesn’t Guarantee Grants for Your Nonprofit, but It’s Necessary.
Your determination letter has arrived! You’ve made it! …Almost. Contrary to popular belief, exempt status doesn’t promise support. While a 501c3 determination letter is a valuable ingredient in your grant application, it is not a guarantee of funding. As mentioned earlier, many foundations require this letter and a duration of time in operation, so the sooner you can file and receive exempt status, the better. Wondering how to raise revenue in the meantime? Consider these tried and true tactics:
- Find a Fiscal Sponsor | Working with a like-minded partner organization can help you create a collaborative project, but it can also open doors to grant funding. A fiscal sponsor is an exempt organization that agrees to allow your organization to operate under its 501c3 status.
- Earn Your Income | Earned income is revenue your organization brings in through common business means, i.e., sales, membership, or programmatic fees. While you lose the ability to offer tax deductions to those who support the cause through these means, you’re still making headway toward building a fully operational organization.
- Take Some Risk | If you’re within a reasonable period of time from receiving your determination letter, consider informing donors that your exempt status will be retroactive to the date you filed. That’s right! Early supporters can still reap the tax-deductible benefits so long as your application for exemption is approved.
- Start as a Volunteer Organization | While not possible for all causes, if you have the capacity to launch your non-profit dream as a volunteer operation, you should consider this route. Learning to do your work for free/low investment will build efficiency and help you get started sooner.
Start with Local Non-profit Grants
While your cause is worthy of the Ford Foundation and Bill Gates should expedite your request to his funding chair, your best bet is closer to home. Your local community is the best place to start for early grant funding…especially if you aim to meet a community need. Community Foundations and even local corporate and family foundations are in place to support the philanthropic desires and cause work represented in their community – that includes you! Get a meeting to learn more about your local foundation’s giving priorities, and be sure to ask about the following:
- Grant guidelines and giving priorities. Do they align with your cause?
- Technical assistance grants to help with technology and professional services necessary to scale your organization.
- Referrals to other corporate and family foundations who may have an interest in your cause.
- Community Giving Days or other community activities where multiple charities are supported.
Finding Non-profit Grants on the Web
Did you know that only about 10% of U.S. foundations have websites? Foundation grants are not a digital pursuit, whether they don’t want to be found or simply haven’t gotten around. The good news is that our friends at organizations like Foundation Center Online (warning: expensive) and Instrumentl house enormous and highly searchable databases of grant opportunities. While there is a cost associated with the research, it’s worth the investment once your organization is grant-ready.
If you need a free option, consider setting up Google Alerts for keywords related to your mission and territory. For example, if you’re an animal shelter in Boise, IA, you could set up the following alerts:
“Non-profit Grant Animal Shelter Boise,” or
“Grant for Animal Rescue Idaho”
The Google alert will notify you of a press announcement with those keywords. Hopefully, this will clue you into other similar-mission organizations that have received grant funding and who they received it. This will help connect you to future philanthropic partners, but you will find new collaborative partners as well.
Knowledge Saves Time
The more prepared you are for grant funding, the better your chances of receiving the funding you need to grow your organization. There are many avenues, tripping points, and hurdles, but they are all more easily navigated with the foundational knowledge of the grant process. Consider signing up for the Grant Writing Basics Certificate Course to prepare yourself and your non-profit for success. This self-paced course includes over 40 lessons on the granting process with a curriculum tailored for small to mid-sized organizations. Get started here.