Whether you run a medium or large nonprofit, overseeing and managing your organization can be expensive. It can be daunting to balance all of your day-to-day responsibilities, manage your staff, and develop systems and strategies to improve your nonprofit organization.
This is where capacity grants come into play - they provide nonprofits with the money for internal, not external, needs.
This article will discuss what capacity grants are, why they’re so important to your organization’s effectiveness, and how to find them.
What Are Capacity Building Grants?
Unlike most grants that are designed to directly advance a mission or project, capacity grants are designed to specifically support a nonprofit’s operations. This could include federal grants, grants from corporations, and even from other foundations.
Instead of funding a project that is linked to a cause, a capacity grant is used for operating expenses.
Some expenses include:
Consultants for in-person or web-based education and training
Providing new services to staff, such as mental health evaluations
Creating new positions within the nonprofit
Hiring external contractors
Capacity grants invest in the nonprofit itself so it can have the resources it needs to better fulfill its mission.
The funder can stipulate specific parameters as to how they wish the funds to be used, or
They can give the nonprofit the flexibility and freedom to use the funds in whatever way they believe will most benefit the organization.
Pro Tip: Using Instrumentl, you can search specifically for capacity grants, which could be a large sum to help your nonprofit better its internal structure and operating systems.
Why Are Capacity Grants Important?
Capacity grants are so important because they provide nonprofits with the resources they need to improve their internal structures. This allows the nonprofit to function more efficiently and dedicate more of its time to serving its mission.
Think of it this way: for a nonprofit to effectively work toward realizing its mission, it needs the infrastructure to do it: staff need to be trained, computers/software needs to be up to date, and offices need to be conducive to productive work.
Unfortunately, this isn’t the reality for many nonprofits. Research by the Urban Institute’s National Center for Charitable Statistics and the Center on Philanthropy at Indiana University found that many nonprofits slowly starve themselves in a cycle of neglecting to invest funds in key overhead such as training, computers, and even office supplies.
The article in the Stanford Social Innovation Review explained the research, saying:
“The effects of such limited overhead investment are felt far beyond the office: nonfunctioning computers cannot track program outcomes and show what is working and what is not; poorly trained staff cannot deliver quality services to beneficiaries.” - The Nonprofit Starvation Cycle, Stanford Social Innovation Review
What this calls for is more capacity grants for nonprofits so they can invest in key infrastructure.
It is not just the quantity of work that will be increased, but the quality of it as well. For example, nonprofits could use a capacity grant to invest in the following:
Capacity grants can also free up individual donations so that they can be used for the mission rather than for the operation of the nonprofit.
In this section, we want to walk you through how to use Instrumentl to find capacity grants.
Pro Tip: Create a free Instrumentl account and get access to Instrumentl grant search features for 14 days. Instrumentl will match you with the best general operating grants for your nonprofit.
Step 1: Set Up Your Nonprofit Within Instrumentl
Once you’re in Instrumentl, start your grant search by first creating a “Project.”
Creating a project is where you’ll store all the relevant grants you get matched with.
Fill In Details On Your Organization
You will start by entering your organization’s information.
You’ll have three steps to complete before seeing relevant capacity grants:
1. Share details on where you’re located.
2. Create a project name.
3. Set up your grant search.
First, select the geography in which your nonprofit operates – within the United States, outside of the United States, or both. This will help match you with grants that are relevant to your area.
Once done, click “Save and Continue”.
Provide An Overview Of Your Project
Next, in the “Overview” tab, create a project name.
If you make multiple projects, creating a project name that is related to your program or client will make it easier to identify them in Instrumentl.
In this example, we’ll create a “Project Name” called, “Unrestricted Grants for Food Security.”
Select “Matches & Tracking” so that Instrumentl can match you with relevant grants that fit your criteria. Choosing “Tracking” only is best used if you already have grants and you just want to track them within Instrumentl.
Once done, click “Save and Continue.”
Specify The Types of Grants You’re Looking For
In the last step before you see your grants, you’ll need to set up your matches.
In this step, you’ll clarify the types of grants you want to see. Start by selecting your nonprofit type; in this case, we’re applying for grants for our fictitious food security nonprofit.
We are not a faith-based organization, so we’ll also select “No” when it asks us if we’d like to search for “specifically for faith-based” grants.
Then we’ll select our location as “Inside the U.S.”
In our example, let’s say we operate out of Michigan, specifically the counties surrounding Detroit. Simply search your state, and then select the counties that are relevant to your nonprofit.
Now you will narrow your grant search by selecting the field of work you operate in. This will ensure you get matched with unrestricted capacity grants from funders who support nonprofits like you.
When clicking “+Select Field of Work,” you should search for the cause you support (in our case, food security), and select 2-3 keywords from the drop-down that fits your mission.
Pro tip: It’s best practice to select 2-3 fields of work so you have a wide enough scope for relevant grants.
Next, set a minimum or maximum type of grant you’d like to be matched with. This will filter out grants that are either too small, making them not worth pursuing, or too large, making them too competitive.
In our example, we set the minimum to $1,000 and no maximum.
Step 2: Narrow Your Grant Search To Only Capacity Grants
Next, you will want to make sure you select all the types of capacity grants so you get matched with them. In the section, “What will you use the funds for,” select:
General Operating Expense - get matched with grants specifically for overhead expenses.
Capital Project - get matches with grants for construction, renovations, or equipment.
Training / Capacity Building - get matched with grants that support internal training.
Select the funders you want to work with
Additionally, specify what kinds of funders you want grants from. In our example, we’ll take grants from any kind of funder, whether an association, a corporate foundation, a government, or a private funder.
Click “Save and Exit” to start seeing the grants you’re getting matched with.
Invite Your Team Members
Since you are specifically looking for capacity grants, which assist the internal workings of your nonprofit, you may want to invite specific team members to help you with the search.
In fact, you can invite up to 9 additional users to help you with your capacity grant search!
Step 3: Prioritize Your Grant Opportunities
At this stage, Instrumentl has narrowed down all of the potential grants you could pursue in your area. That way, you can prioritize what grants support your cause.
Review your grant matches
Instrumentl’s grant matches resemble an email inbox. The matches are all on the left, and when you click on one, the details will show on the right.
As you can see below, the “Funding Opportunity Matches” are individual active grants and the “Funder Matches” are funders who match your search criteria.
See which grants are the best fit for your nonprofit
The right side of the screen expands the details of the grants you clicked on the left. Under, “FUNDING OPPORTUNITY,” you can see the details of the grant, such as the amount, the funder’s website, their application period, and much more.
Gather insights from a funder’s 990 data
If you also want to see the 990 reports click on “FUNDER 990 REPORT” to view visualized data.
This window breaks down the key details about the funder and their history. By clicking on the “FUNDER 990 REPORT” tab, you can review their historical 990 filings. Instrumentl summarizes the details in an easy-to-digest format so that you can see:
An overview of their finances (assets, total giving, average amount)
Now that you know the best way to find capacity grants, we have compiled some common questions below that might still be lingering in your mind.
How Do Capacity Grants Differ from Other Grants?
The main difference between capacity grants and other forms of grants is how you’ll frame your application:
Traditional grants - you will focus your narrative on the issue your nonprofit is trying to address
Capacity grants - you will focus on internal issues, such as program development and expansion.
What Should Consider When Evaluating if a Capacity Grant is Right for Me?
There are many different factors you should consider when deciding whether a specific capacity grant is right for your nonprofit:
Alignment: Ensure the grant aligns with your organization's mission and needs.
Grantor Fit: Research the grantor's priorities and values to confirm compatibility.
Capacity-Building Plan: Develop a clear plan for how grant funds will strengthen your organization.
Compliance and Sustainability: Understand grant requirements, budget, and ensure long-term sustainability.
Carefully considering these factors will help you make an informed decision about whether to pursue a capacity grant.
What are Some Common Mistakes to Avoid When Searching for Capacity Grants?
The most common mistake to avoid when searching for capacity grants is not being thorough with your research.
Luckily, by reading this guide, you are already starting down the right path. As you might have noticed, there are a multitude of factors that go into this search, and it’s natural to feel frustrated.
But frustration can lead us to either give up too soon or not pay attention to crucial details. This is another way in which tools such as Instrumentl can make a big difference in your search.
When Should I Start Looking for Capacity Grants?
While you may have heard of the term “grant writing season” before, the truth is that there’s no exact date for when you should start your search, as deadlines can vary.
That being said, just because a deadline is too tight, or just because you missed it, doesn’t mean you cannot start getting prepared for next year’s application. It is never too early to begin getting ready for a grant.
Wrapping Up: How to Find Capacity Grants Fast
Running a nonprofit is difficult, and sometimes, money can be tight. Whether you are seeking to innovate or to simply fix problems with your current structure, capacity grants can truly make a difference in this regard.
This guide provides you with how to use Instrumentl to find the best capacity grant for your nonprofit so that you can thrive as you move forward. Once you find capacity grants, use our step-by-step guide to start the grant writing process.