Gain insights from professional grant writers on the differences between foundation and government grants. Discover which funding entities are worth pursuing for your nonprofit and navigate the grant-seeking process more effectively.
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Are you overwhelmed in the world of grant searching and writing? Maybe you’re not sure what types of grants are “worth it” or manageable for your organization. We’re here to help.
We surveyed a group of professional grant writers to see what entities they seek funding from. Their answers and insights will help you discern what it's like applying for foundation vs government grants and which ones your nonprofit should pursue.
Let’s see what these nonprofit pros had to say about the difference between private and public funding:
Let’s start with the basics: foundation grants.
Foundation grants are awarded by foundations, individuals, families, or even corporations and are a crucial source of funding for nonprofits.
Foundation grants can be very lucrative for nonprofits because there are usually a lot of opportunities available locally, regionally, and nationally. These grants are often designed to support specific causes, such as education, arts and culture, social causes, healthcare, or education.
There are a few things your nonprofit will need to do to ensure you are ready to apply for foundation grants. Here are two overarching considerations to keep in mind:
These are just two “big picture” questions you need to answer before you apply for foundation funding. For a more detailed analysis, you can review this comprehensive grant readiness checklist to help you further decipher if you are funding-ready.
You can find foundation grants by doing a simple Google search or looking up individual foundation websites, but these options will take quite a bit of time.
A simpler and more efficient way to quickly and easily find foundation grants is by using Instrumentl. Instrumentl’s grant database allows you to filter which types of funders you would like to see grants from:
You can create a free Instrumentl account for 14 days to search through the more than 400,000 funders and active grant opportunities. You can also filter your search by geographic location, focus area, funding amount, and much more. That way, you aren’t sifting through hundreds of grant opportunities that don’t meet your needs.
According to the IRS, the main difference between public and private foundations is the amount of public involvement they have in their activities.
“Public charities generally receive a greater portion of their financial support from the general public or governmental units, and have greater interaction with the public. A private foundation, on the other hand, is typically controlled by members of a family or by a small group of individuals, and derives much of its support from a small number of sources and from investment income.” - IRS
What does this mean exactly? While a public foundation relies on donations from the public (at least one-third of the funding must be from the general public), a private foundation is usually funded by a single individual, family, or corporation.
For example, the Make-a-Wish Foundation is a public foundation because most of its funding comes from the general public, while the Bill and Melinda Gates Foundation is a private foundation because it is supported by Mr. and Mrs. Gates, their investments, and other private individuals.
We were curious which type of funding grant writers won most often. Here’s what we asked in our survey:
Which type of funder do you win most often?
The answer was clear: over half of the respondents reported winning grants from private foundations most often.
Why is this? Keep reading and we’ll explain why government funding is often more difficult to secure.
Government grants are monetary funds allocated by local, county, state, or federal agencies and departments.
Government grants can offer nonprofits financial stability because they are usually much larger than other types of grants and are typically allocated over a number of years. However, they also come with stricter guidelines and reporting requirements, making the application process much more detailed than other types of grants.
Government grants are definitely a rewarding venture, but they are also very time-consuming when it comes to getting funding ready.
Here are some questions that can help you determine if you’re government funding ready:
As mentioned above, there may be other government requirements depending on the agency allocating the grant. For example, Rachel Werner, the Owner & CEO of RBW Strategy, discusses another possible eligibility requirement under the Office of Management and Budget:
“If you are a recipient of government funding, then you probably are aware of 2 CFR 200, which is the uniform grant guidance under the Office of Management and Budget…So in order to make sure that you continue to be a good steward, you need to make sure that you understand 2 CFR 200 and understand its components.”
Ms. Werner has served as a nonprofit fundraiser/grant writer, grants manager at an education management organization, and management consultant overseeing federal government contracts. So, she knows the tedious processes of applying for government grant funding!
Our survey respondents agreed! When asked which type of funder they prefer writing grants for, the answer was clear: writing applications for private foundation grants is much preferred to writing applications for government funding!
The majority of grant writers surveyed also revealed that they mostly write grant applications for private funding. This makes sense, given the difficulty of government grant applications!
However, if your nonprofit has the resources and bandwidth to apply for and manage government funding, these grants can be a great way to secure large and multi-year funding support for your mission.
If you are still interested in applying for government funding, there are a few places we suggest you start your search. Grants.gov is a solid resource for government grants because it includes a database of all federal and some state-level grant opportunities.
However, Grants.gov doesn’t have robust keyword search options, so the results tend to be overwhelming for nonprofit professionals.
Instrumentl, on the other hand, allows you to filter your search by funding source (including state/local government grants), area of focus, funding amount, geographic location, and more!
These advanced search filters make it easy to identify the most relevant government funding opportunities for your organization.
These advanced search filters make it easy to identify the most relevant government funding opportunities for your organization.
Government grants can be offered on the federal, state, or even local level.
State and local grants can be very attractive to nonprofits because they are distributed to specific regions. This makes them less competitive than federal grants that may have a national or global scale.
You can even use Instrumentl to narrow your search to funding opportunities that are only available in your specific county or region.
However, some of the largest funding opportunities come from federal agencies; while they may be more competitive, winning them can be a huge financial boost to your organization.
There are certainly advantages to both foundation and government grants. However, there are also important things to consider for each.
Three of the most important things to think about when deciding between foundation and government grants are timing, resources, and the scale of the project.
Timing is an important factor to consider when applying for foundation versus government grants. Here are some interesting grant statistics we found on the time it takes to complete foundation grants versus federal government grants:
When deciding which type of opportunities to pursue, make sure to consider how much time your team has to develop a competitive proposal.
Government grants also require a lot of staff time and resources to apply for and manage.
Government grants often have stricter reporting requirements, requiring your team to gather program data, submit frequent and regular reports, and possibly prepare for audits. Although foundation grants do have some tracking and reporting requirements, they are generally much less detailed and intense than those for government grants.
Funding from state and federal government grants can be quite substantial when compared to foundation grants.
A report from 2019 shows how much larger federal government grants can be for versus foundation grants:
That is a more than $400,000 difference between an individual foundation award and an individual federal government award!
Because federal grants are so large, they often can be used for large-scale projects that otherwise might not have been possible.
Choosing between foundation and government grants ultimately depends on the capacity of your nonprofit and the scope of your projects and services.
Here’s a helpful table that outlines the differences between the two:
Conclusion
In the end, government grants offer much larger monetary awards, but are much more labor-intensive during the application process and the management of the award. Foundation grants offer smaller awards but are much less time-consuming for you and your staff and can be less competitive as well.
We suggest starting your search for both in Instrumentl to see what is available. Then, you can compare the opportunities and decide which ones are worth pursuing for the highest return on your investment for your nonprofit!
Foundation grants are typically offered by private or corporate foundations and often have specific focus areas, while government grants are funded by federal, state, or local governments and tend to have broader eligibility criteria.
Foundation grants often have simpler application processes compared to government grants, which can involve more extensive documentation and compliance requirements.
Yes, foundation grants often come with restrictions on fund usage, such as being limited to specific projects or programs outlined in the application.
Not necessarily. While government grants can be substantial, the size of a grant depends on the specific program or foundation offering it.
It depends on the grant. Some foundation grants and many government grants are available only to organizations or businesses, while others may be open to individuals.
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