If you’re in charge of fundraising for a nonprofit, it’s important to be familiar with the types of grants that are available to you and your organization. It can feel overwhelming at first as you begin to learn about the various types of grants, but don’t worry!
This post will explain the four main types of grants that are available for nonprofits as well as the most common grant types based on specific funders. We will also talk about common uses for nonprofit grants and how to begin to find grants for your nonprofit.
By the time you finish reading, you will have all the information you need to begin grant-seeking for your own organization. Let’s go!
What are the 4 Types of Grants for Nonprofits?
Grants come in various forms from several different types of entities. In the United States, there are four primary types of grants. Let’s dive in!
Competitive grants are grants for which a nonprofit must submit a proposal. These proposals get reviewed by a team of reviewers who evaluate each proposal based on their organization’s criteria for funding.
Most competitive grants assign a score to each proposal based on predetermined criteria; the proposals with the highest scores get awarded the grant funding.
Continuation grants provide funding for a nonprofit to renew a previously awarded grant for another grant cycle. These opportunities are most often fostered through developing a strong relationship between your nonprofit and the funder.
To receive a continuation grant, it’s necessary to meet all the terms of the grant when you are first funded. This means maintaining consistent communication with the funder, working to accomplish proposed outcomes, and meeting the funder’s reporting deadlines.
For example, SAMHSA offers continuation grants for continued funding for projects that meet specific criteria.
Be aware that not all funders offer continuation grants; it’s important to do research on each funder to determine if this type of grant may be available.
This type of grant originates from the federal government, which then distributes funding to state or local governments for them to allocate. These are competitive grants, meaning that applicants must apply to their state or municipal government to be awarded these funds.
Formula grants are non-competitive grants where funds are distributed to an organization based on meeting a set of predetermined criteria. All applicants that meet the criteria will receive funding, although amounts will vary. Funding amounts for formula grants are often based on certain benchmarks.
For example, a state may allocate money to organizations for a specific activity, and the amount distributed to a particular organization may be based on the numbers of people they serve, or the number of residents in their community.
The U.S. Department of Education provides formula grants as part of the Individuals with Disabilities Education Act (IDEA). You can read more about these formula grants here.
Now that we’ve talked about the four primary types of grants that are available, we are going to share with you some common types of grants that exist based on the funder. Keep reading!
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 funders include the government and foundations, which can be private or public. You can read more about these categories below.
3 Types of Government Grants
Government grants are awarded to serve a public purpose.
These grants are funded by tax-payer dollars and the allocation of these grants is determined by legislation. You can read more here about whether government grants are a good fit for your organization.
There are 3 primary types of government grants that are available for nonprofits: federal, state, and local (city or county) grants.
Federal grants are distributed by the federal government. These grants are generally open and competitive on a national scale, unless otherwise specified. Federal grant opportunities can be found on grants.gov.
Here are a few examples of federal agencies that award federal grants:
US Department of Education (DOE)
US Department of Agriculture (USDA)
US Department of Health & Human Services (HHS)
State grants for nonprofits are distributed by state governments. Your nonprofit organization should be located in or serve communities within that state to be eligible to apply for these funds.
State grants can sometimes be pass-through grants—meaning that the federal government passed funds to individual states to distribute through a competitive process.
State funds can also be allocated for specific purposes by state legislatures; building strong relationships with your local legislatures can help your nonprofit become eligible for these types of grants.
Most states have an online grant system for all of the state’s 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)
These opportunities will vary from state to state, so be sure to take some time to familiarize yourself with the opportunities in the state in which your nonprofit is located.
Local (City or County) Grants
Just like with state governments, city and county governments also often have grants to distribute for specific regions that fall under their jurisdiction. These are often pass-through grants from state or federal entities.
Some cities and counties share grant information via an online system, such as New York City’s PASSport. This system lists all city funding opportunities, and includes opportunities for health and human services, arts and education, and city council discretionary opportunities.
If your city or municipality does not have a centralized system, don’t worry! You can find your local government grant opportunities in other ways! Often, local libraries and government offices are great resources for identifying local funding opportunities.
You can even call, email, or schedule a meeting with your local elected officials to talk about grant opportunities. Local elected officials sometimes have discretionary funding that they can allocate in the form of a grant, so getting to know these people is a great way to get access to funds to support your nonprofit!
Ok, so we’ve talked about different types of government grants, but these are not the only types of grants that you need to be familiar with. Foundation grants also provide funding opportunities for nonprofits, so keep reading!
6 Types of Foundation Grants
Let’s start with the basics—what, exactly, is a foundation?
Essentially, a foundation is an entity that awards grant funding to organizations such as nonprofits.
There are two types of foundations—public and private. Private foundations acquire their funds from individuals, families, or corporations. Public foundations amass money through fundraising and often receive donations from a variety of sources.
Both types of foundations tend to offer grants. There are six main types of foundation grants that you should be familiar with as you begin your grant-seeking journey. We’re going to take a look at each one below—let’s go!
Family Grants (Private)
Family foundations generally distribute grants based on the interests of the family that founded the fund who often serve as the foundation’s officers or trustees.
Family foundations tend to be very small and focus on supporting their communities. Some family foundations, however, can be quite large—the Bill & Melinda Gates Foundation is an example. This foundation earmarks funds for specific purposes and distributes those funds nationally and internationally. However, it is still considered a family foundation because the Gates family established it and governs it.
What’s important to keep in mind is that regardless of the size of the family foundation, the family maintains involvement in some capacity and informs the foundation’s grantmaking.
In the example below, you can see the Hyde Family Foundation was started by Joseph Hyde, Sr., and continues to be operated by his family. This family foundation focuses on funding projects that meet the specific needs of the communities in and around Memphis.
Independent Grants (Private)
Independent private foundations are similar to family foundations, except the trustees are not comprised of the donor or their family. These foundations are often still required to steward the foundation’s funds in ways that align with the donor’s charitable interests.
Corporate / Business Grants (Private)
Funds for these foundation grants come from the profits of a business or the business founders. They distribute funds similarly to other private foundations, however their grants usually support projects and organizations that align with the business's goals.
For example, the W.K. Kellogg Foundation was funded by breakfast cereal entrepreneur Will Keith Kellogg and focuses their grantmaking on projects that meet the needs of vulnerable children, including those facing food insecurity.
Because a business’ services and their charitable contributions are so closely linked, it’s important for nonprofits to ensure that their mission and goals are also in alignment with the business’ values and giving priorities.
Financial Institutions (Private)
Another common type of grant that nonprofits may be eligible for comes from financial institutions. Large, national banks as well as small, local banks and credit unions often have charitable trusts to which you can apply for grants to support your project or nonprofit.
Federated Funds (Public)
If you work in the nonprofit world, it’s likely you’ve heard of the United Way or the Combined Federal Campaign. These are two examples of public federated foundations, meaning that they fundraise from multiple sources to create a fund used for charitable purposes.
These foundations often select a portfolio of nonprofits to support on a regular basis based on their specific foundation’s vision and goals. The amount of money that the foundation raises for their fund each year determines how many grant dollars are allocated to their chosen nonprofits.
Community Grants (Public)
Community foundations combine multiple funding sources to create a large pool of funds to allocate to nonprofits in their community. They also administer funds for donors who want to make charitable contributions without starting their own foundation. The York County Community Foundation, for example, allows donors to contribute to specific causes or to establish a new fund.
Grants from community foundations are almost always restricted to nonprofits or projects that make a positive impact within the foundation’s immediate community. With over 600 community foundations across the nation, there’s sure to be one that is near to you and your nonprofit! You can find a directory of these foundations here.
Click to find the best grants for your nonprofit from 12,000+ active opportunities.
What are The Most Common Ways Nonprofits use Grants?
One of the trickiest parts of searching for grants to support your organization is that almost all grants have a very specific set of criteria and parameters.
Before you begin to search for grants to support your project or nonprofit, you need to understand the common uses for grants so that you can target your grant search appropriately. Keep reading, and we’ll review the top eight most common uses for nonprofit grants.
Program or Project
As the name suggests, program or project grants are used to support a specific project or program within a nonprofit. These grants often have reporting requirements; at the end of the grant period, you will most likely be required to submit a grant report to the funder demonstrating that their funds were used for the approved project or program.
Both program and project grants also require specific deliverables, based on the specific project or program.
With a project, the deliverables might be a specified product such as the creation of a new website. Program outcomes are often tied to larger-scale change and might include things like the number of participants served, participant progress, etc., that demonstrate the impact the program made on the target population.
Grants might also support outreach activities such as audience development, marketing campaigns, or public engagement and education.
These grants are most frequently used to garner community support for a specific program or nonprofit. They can also be used to ensure that the community is aware of and able to navigate the services available to them.
Capital grants support construction projects, the purchase of facilities, building improvements and repairs, or design/engineering fees.
Many nonprofits seek capital grants when they need to move to a bigger location, make significant and costly repairs to an existing space, or expand services to a new region.
Here are a few examples of capital grant opportunities:
The Hyde & Watson Foundation offers capital grant opportunities for nonprofits focusing on education, social services, arts, health, religion and humanities.
The Telluride Foundation supports capital campaigns and projects where a minimum of 75% of the capital project budget has already been met.
General operating grants are often considered the “holy grail” of grant opportunities because they can be tough to find! General operating grants offer nonprofits unrestricted funds that can be used towards the organization’s operating expenses and overhead costs. These grants support the organization as a whole.
The Paypal Giving Fund is an example of a general operating fund; it allows enrolled nonprofits to receive funds from charitable donors right into their Paypal account that they can use at their discretion—no strings attached.
Capacity building grants help nonprofits expand their capacity, increase effectiveness, and become more sustainable. These grants can be used for a number of purposes, including expanding resources, developing systems, leadership development, improved technology, and more.
The Bunbury Fund Grant, administered by the Princeton Area Community Foundation, is a great example of a capacity building grant opportunity.
Seed grants assist nonprofits with startup costs.
These initial costs can either be for the nonprofit itself, or for new programs it is trying to start. Seed grants are helpful because, once successfully executed, they give other funders confidence that your organization or program is reputable and fundable.
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.Nonprofits are often required to demonstrate the impact of their programs, projects, and services through an evaluation plan. Evaluation plans measure outcomes and provide important data points that nonprofits can use on their website, in annual reports, and in grant applications.
Here’s the tricky part—evaluation plans can be expensive, and they are often not funded, meaning that the work then falls on nonprofit program staff.
This is where an evaluation grant comes in. These grants provide funding to conduct a full assessment of your organization’s programs and services.
The Robert Wood Johnson Foundation is a foundation that offers evaluation grants. This foundation funds third-party evaluators to assess your nonprofit’s program effectiveness.
It takes time and resources—both human and financial—to plan and design a new program. Program design must consider community needs, program effectiveness, feasibility, and much more. Planning grants provide nonprofits with funding to allow for a thoughtful, in-depth, and well-researched program plan.
Wow! We’ve been over a lot—including the main type of grants that are available for nonprofits and the main uses of nonprofit grants. Before we wrap up, we want to make sure you know how to find grants for your nonprofit. Then you’ll be ready to start searching for grants!
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!
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.