The Most Common Types of Nonprofit Grants [in 2022]
In the world of grants, there are a plethora of grant funding options to pursue. It can be overwhelming to get familiar with all the options, and it can become confusing to sort out which type of grant funding is right for your nonprofit.
This post will help you to know what types of nonprofit grants are available and how to distinguish between common types of grants. It will review the types of grant funding sources and common uses for nonprofit grants.
By the end, you will have no trouble understanding your choices and the courses of action to find grants that are a good fit for your nonprofit.
What are the 4 Types of Grants for Nonprofits?
Competitive grants are those for which a nonprofit submits a proposal that gets evaluated by a team of reviewers. Reviewers evaluate each proposal and select the ones that most fit their criteria for funding.
For most competitive government grants, each proposal is given a score based on criteria, and the proposals with the highest scores are awarded.
Continuation funding allows a non-profit to renew its previously awarded grant for a subsequent amount of time. These grant opportunities can often be fostered through developing the relationship between the nonprofit and the funder. Consistent communication, working toward accomplishing the grant’s proposed outcomes, and meeting all reporting deadlines are a few ways to do this.
Not all funders offer continuation grants; some guidelines will explicitly state that they only award one-time grants.
Pass-through grants originate from the federal government, which then distributes funding to state or local governments for allocation. Applicants can apply to states or municipalities for federal funds to make a local impact.
Formula grants are non-competitive, where funds are distributed to organizations based on meeting predetermined criteria. All applicants that meet the criteria will receive funding, but the amount is based on certain benchmarks. For example, states may allocate money to organizations for a specific activity, and the amount distributed to a particular organization may be based on the numbers they serve or the number of residents in their community.
Another source, The Center for Collective Philanthropy, concludes that 32% of foundation survey respondents provide general operating support, and 18% offer capacity-building grants.
Grants that fund programs will generally cover eligible expenses of the resources necessary to run the program such as staff, space, and materials.
To receive grant funding for programs, a nonprofit will generally need to describe how the funds will be used, the types of services to be provided, the implementation plan, the demonstrated need and impact of the program, the anticipated outcomes or goals to be met, and the evaluation measures.
This post covers more on the common uses of grants for nonprofits below.
What are Common Types of Grants Based on Funder?
Grants can be funded and distributed by different entities.
The type of funder will generally determine the processes for applying, receiving the award, and reporting on the grant’s outcomes.
Common types of grants for nonprofits based on funders include government and foundations, which can be private or public. You can read more about these categories below.
Government grants are awarded to serve a public purpose. The funds for these grants come from tax-payer dollars, and legislation determines how the money will be allocated.
You can read more here on whether these types of grants are right for your nonprofit and the process of applying for them.
Below, we describe the difference between the levels of government-sourced grants.
Federal grants are monetary assistance distributed by federal government agencies. Unless otherwise specified, these are generally open to and competed for nationwide. These opportunities are mainly found on grants.gov.
Some examples of federal agencies that award grants include:
- US Department of Agriculture (USDA)
- US Department of Education (ED)
- US Department of Health and Human Services (HHS)
State grants for nonprofits are distributed by state governments. Generally, your nonprofit must be either located within the state or serve communities within the state in order to be eligible to apply.
Sometimes these are pass-through grants (federally funded but distributed via the state), or they are funded by state taxes and allocated by state legislatures.
Most states will have an online system for all of its state agencies’ funding opportunities. In New York, for instance, the Grants Gateway portal allows you to locate, apply for, and manage New York State (NYS) grants.
For example, some NYS agencies that offer funding opportunities within the state are:
- NYS Office of Mental Health
- NYS Department of Environmental Conservation
- NYS Office for People With Developmental Disabilities (OPWDD)
State government agencies and grant opportunities will vary from state to state.
Local (City or County) Grants
Just as in the above -- where state grants are distributed by states -- city or county governments grants are distributed by… you guessed it… municipal governments for regions that are under their jurisdiction. These are also commonly pass-through grants.
Some cities and counties will make grant information available via an online system, such as New York City’s PASSport. Here, examples of local funding agencies include:
- NYC Department of Transportation
- NYC Administration for Children’s Services
- NYC Department of Information Technology and Telecommunications
If your municipality does not have such an online system, then you can find local government grant opportunities in other ways. They can be searched for in local libraries, government offices, or by communicating with elected officials themselves. Local elected officials usually have discretionary funding or access to other funding resources that they can allocate in the form of a grant. Stay on their mailing list and get to know their staff.
Now that we’ve covered different types of government grants, it’s time to dive into different types of foundations that fund grants.
In the simplest sense, foundations are tax-exempt 501(c)3 organizations that have charitable purposes. Private foundations acquire their funding from an individual, a family, or a corporation. Public foundations amass money through fundraising and receive donations from a variety of sources.
Below are more specific descriptions of different foundation grants.
Family foundations generally distribute grants based on the interests of the family, who preside as officers or trustees. Many family foundations are very small, with a focus on giving to needs within their communities. Others can be very large, such as the Bill & Melinda Gates Foundation, which earmarks funds for specific purposes, but distributes them both nationally and internationally. It is still considered a family foundation because the Gates family governs it. The key is that whether large or small, the family oversees and funds the foundation.
In the example below, you can see that the Hyde Family Foundation was started by Joseph Hyde Sr, and continues to be operated by his family. This particular family foundation focuses on specific needs within the region of Memphis.
Independent private foundations are similar to family foundations, except the trustees do not include the donor or donor’s family. However, these foundations may still be bound to use the funds in ways that align with the donor’s charitable interests.
Corporate / Business Grants
Funds for these foundation grants come from the profits of a business or the business founders. While they distribute funds similarly to other private foundations, their grants usually go toward missions that align with their business goals.
For instance, Home Depot’s Foundation offers Community Impact grant opportunities, where awards are given via Home Depot gift cards to be used toward housing/repair projects that benefit vulnerable populations within the communities that it conducts business.
Because of the tie between a business’s services and its charitable contributions, nonprofits strive to ensure that the goals of the business also align with its values.
Another common type of nonprofit grant comes from financial institutions. Large, nationwide banks and small, local banks or credit unions often have charitable trusts to which nonprofits can apply.
You may be familiar with grant opportunities from United Way or the Combined Federal Campaign. Each of these is a public federated foundation, which means that they fundraise, or collect money from multiple sources, to create a fund used for charitable purposes.
These charities often screen and select a portfolio of nonprofits to support on a regular basis. The amount of money that the fund is able to raise each year determines how much it distributes to the selected nonprofits.
Similar to federated funds, community foundations bring together multiple sources of funding to contribute to nonprofits. They administer funds for donors who do not want to set up their own foundation. New York Community Trust, for instance, allows donors to contribute to specific causes or to establish a new fund.
These grants typically go to support nonprofits that serve their region. With over 600 community foundations in the US, you can find a directory of them here.
What are Common Uses for Nonprofit Grants?
While it would be nice to think that every good idea could be funded by a grant, grants actually have a specific set of parameters. The purpose for which funds can be used will be determined and approved by the funder. This will vary depending on a funder’s mission, goals, and strategy.
With that in mind, here are some common uses for nonprofit grants that you can look for.
Program or Project
Program and project grants are used for the implementation of services for a predetermined period. Programs are designed to meet specific needs of the community.
Programs are ongoing, whereas projects have a specific start date and end date. Also, while both are expected to deliver outcomes, projects have more specific deliverables, such as a product or defined result. Program outcomes are generally about affecting change and are expected to be evaluated by the impact made on the served population.
Outreach activities may include activities such as audience development, marketing, or public engagement and education. These grants are used to generate community support for the program or nonprofit. Or, they are used to ensure that the community is made aware of the services available to them.
Capital grants go toward construction or purchase of facilities, building improvements or repairs, and/or associated costs, such as planning and design or engineering fees.
Some examples of capital grant opportunities include:
- The Hyde and Watson Foundation, which offers capital grant opportunities for nonprofits working in the areas of education, social services, arts, health, religion, and humanities.
- The Telluride Foundation supports capital campaigns where 75% of the capital project budget has already been met.
- Nonprofit Security Grant Program by FEMA funds physical security enhancements for eligible nonprofits.
Often considered the holy grail of funding, general operating grants are unrestricted funds that can go toward the organization’s operating expenses and overhead. They support the overall organization in accomplishing its mission.
The Paypal Giving Fund allows enrolled nonprofits to receive funds from charitable donors directly into a Paypal account to use at their discretion.
Capacity building grants help nonprofits to become more effective and sustainable over time. They may go toward improving or growing their resources, skills, systems, strategies, leadership, technology, and more.
An example of a capacity building grant opportunity:
- Oregon Community Foundation recognizes that nonprofits need to prepare to sustain growing programs. Some fundable capacity building activities include strengthening governance and diversifying revenue streams.
Seed grants assist nonprofits with their startup costs - either for the organization itself or for new programs it is trying to start. Often these are helpful to give other funders confidence that your organization is reputable and fundable.
The Schlecht Family Foundation is one funder that provides seed funding grants.
Many foundations require nonprofits to have an evaluation plan to measure the outcome of their programs. However, this evaluation process is not always funded, and it falls on the responsibility of program managers and other staff to evaluate their programs as effectively as possible on limited resources.
Evaluation grants provide funding to conduct a full assessment of a nonprofit program.
The Robert Wood Johnson Foundation funds third-party evaluators to assess program effectiveness and to allow their funded programs to contribute to their field’s broader knowledge base.
It takes time and resources to plan a program while ensuring it meets the needs of the community and is designed in a way that will be implemented effectively. Planning grants enable nonprofits to develop a well-researched plan of action for the area to be served.
How to Find Grants for Your Nonprofit
Instrumentl allows you to set up projects for which you are looking for grant funding. Once you input information about the categories you are looking for, Instrumentl matches you with public and private grant opportunities from a variety of funding sources.
Our platform will immediately return results for grant opportunities that match your project. Additionally, it checks daily for new funding opportunities and will notify you immediately of any new grants.
You can then keep track of your favorite grants, receive reminders of deadlines, and manage each and every grant prospect all in one place. Once a week, Instrumentl will send you a rolled up message with all your tasks and deadlines coming up.
Creating a project on Instrumentl is easy. To start, you’ll tell us what sort of organization you’re applying to on behalf of, along with whether or not you’d like to see grants specific for faith-based organizations.
Next, you’ll tell us the location of your project and select some common keywords that align to the program you’re looking to win grants for.
Lastly, you’ll select what types of grants you'd like in your matches, including preferences like what size grants you’re looking for.
Once you’ve set up your project, Instrumentl will do the rest for you and leave you with a set of matches based on the project you set up! As you can see below, this search yielded 109 results!
The nice thing about these 109 opportunities is they are all active opportunities that you would be able to start working on today. If you’d like to try Instrumentl for yourself, you can create a 14-day trial here. Alternatively, you can browse grants for nonprofits here.
Wrapping Things Up: The Most Common Types of Nonprofit Grants
Now that you have an awareness of the common types of nonprofit grants, hopefully you’re ready to narrow your search down to the opportunities that make the most sense for your organization. You can now determine if your goal is fundable by a grant, and if so, where you can get one.
Not only that, but you also have a tool in Instrumentl to help you look for and match with the right opportunities. If you enjoyed this post and would like more grant writing content, be sure to check out more of our grant writing guides here.