Finding the right funding for your organization can be challenging, as different grants serve different purposes and come with varying requirements. Beyond just securing money, it’s about finding funding that aligns with your mission and goals.
In this comprehensive guide, you’ll discover:
How community foundations provide accessible local funding with technical assistance and community-based decision-making
Strategies for building relationships with funders before applying, which dramatically improves success rates
Formula grants that automatically distribute funds based on predetermined criteria like population size or poverty rates
PS., Teams using AI-powered grant writing tools like Grantboost can handle their entire monthly grant workload in the time it used to take to complete just one application. Stick around to learn how they’re doing it 😉
Ready? Let’s go.
For individuals and teams looking to secure more funding with less effort. Streamline your grant-writing process, stay organized, and achieve better results with proven templates and AI-driven support.
| Grant Type | Source | Key Characteristics | Application Process | Best For | Major Challenges |
|---|---|---|---|---|---|
| Federal Grants | U.S. Federal Government Agencies (HHS, Education, HUD, NEA, NSF) | - Largest funding amounts - Stringent compliance requirements - Multi-year support potential - Highly competitive (≤10% success rate) | - Found on Grants.gov\ - Requires 501(c)(3), DUNS number, SAM registration\ - Complex application packages | Organizations with strong administrative capacity and track record | - Extensive reporting\ -Reimbursement-based funding\ - Complex compliance requirements |
| State Grants | State government agencies | - More geographically targeted\ - Less competitive than federal\ - Often from federal pass-through funding | - Each state has its own portal\ - Focus on state-specific priorities\ - More streamlined than federal | Organizations serving state-specific populations | - Varying application processes by state\ - May require state-specific relationships |
| Local Government Grants | City, county, municipal governments | - Smaller amounts\ - Relationship-driven\ - Faster application processes\ - Less competitive | - Often requires local relationships\ - May involve presenting to local officials | Small organizations with strong community ties | - Limited funding amounts\ - May be influenced by local politics |
| Private Foundation Grants | Family and independent foundations | - Reflect founder interests\ - More flexible requirements\ - Emphasis on relationships\ - Varying application cycles | - Often starts with letter of inquiry\ - Research via Foundation Directory\ - Review 990-PF filings | Organizations aligned with specific foundation interests | - May have narrow funding priorities - Often dependent on personal connections |
| Community Foundation Grants | Local community foundations | - Geographically focused\ - Multiple funding priorities\ - Community-based decision making\ - More accessible | - Clear local guidelines\ - Community committee reviews\ - Technical assistance often available | Organizations addressing local community needs | - Smaller funding amounts\ - Must |
Grants represent a critical funding source for nonprofit organizations. Unlike loans, grants don’t require repayment, making them particularly valuable for mission-driven work. However, they do come with specific expectations, reporting requirements, and often a competitive grant application process.
The grant ecosystem is complex and multifaceted, with funding flowing from various sources through different mechanisms. Understanding this landscape is the first step toward developing an effective grant strategy.
Key differences between grants and other funding sources:
| Funding Type | Repayment Required | Typical Timeline | Reporting Requirements | Restrictions |
|---|---|---|---|---|
| Grants | No | 3-12+ months | Moderate to extensive | Often restricted to specific projects |
| Loans | Yes, with interest | 1-3 months | Minimal | Few restrictions on use |
| Donations | No | Immediate to ongoing | Minimal | Few restrictions on use |
The grant application process typically follows a timeline that requires planning:
Research phase (1-3 months): Identifying appropriate opportunities
Application development (2-6 weeks): Creating a compelling proposal
Review period (1-6 months): Funder evaluation of applications
Approval notification (varies): Communication of funding decisions
Implementation (grant period): Executing funded activities
Reporting (throughout and post-grant): Documenting outcomes and spending
Grantboost’s AI-powered tools can help organizations navigate this complex landscape by streamlining the application process and ensuring proposals are tailored to specific grant requirements.
Government grants represent one of the largest funding sources available to nonprofits, with billions distributed annually at federal, state, and local levels. These grants typically fund services that align with government priorities and public needs.
Federal grants are funds provided by federal government agencies to support projects that serve the public good. They typically offer larger funding amounts but come with stringent compliance requirements.
Major federal grant-making agencies:
Department of Health and Human Services (HHS)
Department of Education
Department of Housing and Urban Development (HUD)
National Endowment for the Arts (NEA)
National Science Foundation (NSF)
Finding federal opportunities: The primary resource for federal grants is Grants.gov, a centralized database of all federal funding opportunities. Each listing includes detailed information about eligibility, funding amounts, application deadlines, and program requirements.
Example: The Department of Health and Human Services offers Community Services Block Grants that provide funding to alleviate poverty and address community needs. These grants provide about $700 million in grants to states.
Determine Eligibility requirements: Federal grants typically require:
501(c)(3) nonprofit status
DUNS number and SAM registration
Demonstrated capacity to manage federal funds
Alignment with specific program objectives
Pros:
Larger funding amounts
Potential for multi-year support
Prestige and credibility
Cons:
Highly competitive (often less than 10% success rate)
Complex application requirements
Extensive reporting and compliance obligations
Reimbursement-based (requiring upfront capital)
P.S. GrantBoost’s AI can help extract and analyze federal grant requirements, identifying key elements that need to be addressed in your proposal and ensuring compliance with complex federal guidelines.
Definition and characteristics: State grants are funds administered by state governments, often originating from federal pass-through funding or state tax revenues. They typically focus on addressing needs specific to that state’s population and priorities.
How state grants differ from federal:
More geographically targeted
Often less competitive due to smaller applicant pool
May have streamlined application processes
Usually smaller in dollar amount
Finding state opportunities: Each state maintains its own grant portal or funding database. For example:
California: California State Grants Portal
New York: New York State Grants Gateway
Texas: Texas eGrants
Example: The California Arts Council offers $25,000 for the one-year grant activity period.
Application considerations:
Demonstrate local impact and knowledge of state-specific issues
Build relationships with state agency program officers
Attend state-specific grant workshops and webinars
Consider partnering with other types of organizations
Definition and characteristics: Local government grants come from city, county, or municipal governments and typically fund programs that directly benefit local residents. These grants are often smaller but can be less competitive and more relationship-driven.
Benefits of pursuing local funding:
More accessible to smaller organizations
Opportunity to strengthen local relationships
Often faster application and approval process
May lead to ongoing partnerships with local government
Building relationships with local grant administrators:
Attend city council or county commission meetings
Participate in local governments public forums
Schedule informational interviews with program officers
Invite local officials to visit your organization
Provide regular updates on your community impact
For individuals and teams looking to secure more funding with less effort. Streamline your grant-writing process, stay organized, and achieve better results with proven templates and AI-driven support.
Read Next: Uncovering Government Grants for Nonprofit Organizations
Foundation grants make up a significant portion of nonprofit funding, with over $90 billion distributed annually by U.S. foundations in 2023 alone. Unlike government grants, foundation funding often reflects the priorities and interests of their founders or trustees.
Characteristics of private foundation grants: Private and family foundations are established by individuals, families, or small groups to support causes they care about. They range from small family foundations with assets under $1 million to massive entities like the Bill & Melinda Gates Foundation with billions in assets.
How to research family foundations:
Foundation Directory Online (subscription required)
GuideStar/Candid profiles
Foundation websites and annual reports
Form 990-PF tax filings (publicly available)
Application process and relationship building: Private foundations often have:
More flexible application requirements
Greater emphasis on relationship building
Interest in innovative approaches
Varying application cycles (some accept proposals year-round, other grants have specific deadlines)
Tips for approaching family foundations:
Research the founder’s interests and giving history
Look for personal connections to budget decision-makers
Start with a letter of request before submitting a full proposal
Be prepared to demonstrate alignment with the foundation’s specific projects
BTW, our customizable outputs help align proposals with specific foundation requirements, ensuring your application speaks directly to the interests and priorities of private foundation decision-makers.
Role of community foundations in local funding: Community foundations are public charities that pool donations from multiple sources to support causes within a specific geographic area. They serve as important connectors between local donors and community needs.
Geographic focus and priorities:
Typically serve a specific city, county, or region
Focus on local issues and community development
Often have multiple funding priorities reflecting diverse donor interests
May offer both competitive grants and donor-advised funds
Example: The Chicago Community Trust manages over $3.7 billion in assets and distributes grants to address racial and economic inequities in the Chicago metropolitan area.
Application process and decision-making:
Often more accessible than larger foundations
May offer technical assistance to applicants
Usually have clear guidelines and local priorities
Decisions typically made by community-based committees
Building long-term relationships:
Attend community foundation events and workshops
Engage with program officers before applying
Participate in community foundation initiatives beyond grant seeking
Report successes and challenges openly
Acknowledge the foundation’s support publicly
Understanding corporate philanthropy: Corporate foundations are established by businesses to structure their charitable giving. They may operate independently from the company but typically align with corporate values and strategic goals.
Aligning with corporate priorities: Successful corporate grant applications demonstrate:
Clear alignment with the company’s business interests
Potential for employee engagement
Opportunities for brand visibility
Measurable community impact
Example: The Walmart Foundation provides grants to organizations addressing hunger relief, economic opportunity, sustainability, and community cohesion in areas where Walmart operates.
In-kind donations and sponsorships: Beyond cash grants, corporations often provide:
Product donations
Pro bono professional services
Employee volunteer time
Event sponsorships
Cause marketing partnerships
Application strategies:
Research the company’s corporate social responsibility (CSR) priorities
Connect with local store managers or corporate offices
Offer clear recognition and partnership benefits
Demonstrate how your work benefits the company’s customers or communities
Present measurable outcomes that align with corporate reporting needs
BTW, using our proven grant writing strategies, you can create compelling applications that resonate with corporate funders.
Beyond the source of funding, grants are also categorized by their distribution mechanisms. Understanding these categories can help you identify opportunities that match your organization’s capacity and needs.
Definition and characteristics: Competitive grants are awarded through a structured selection process where applications are scored against specific criteria and ranked against other types of applicants. Only the highest-scoring proposals receive funds.
Evaluation criteria and scoring processes: Common evaluation factors include:
Organizational capacity and track record
Project design and methodology
Evidence base and best practices
Budget reasonableness and costs
Evaluation plan and measurable outcomes
Sustainability beyond the given time period
Example: The National Endowment for the Arts’ Art Works grants are highly competitive, with detailed scoring rubrics and panel reviews by experts in the field.
Tips for standing out:
Start early - Begin preparing at least 6-8 weeks before the deadline
Follow instructions precisely - Address every requirement in the guidelines
Use data effectively - Support your case with relevant statistics and research
Demonstrate capacity - Show you have the resources to succeed
Include compelling stories - Balance data with narrative examples
Get external review - Have someone unfamiliar with your work review your proposal
Common mistakes to avoid:
Missing required attachments or signatures
Exceeding page or word limits
Using jargon or technical language
Submitting generic proposals not tailored to the funder
Waiting until the last minute to submit
Definition and characteristics: Continuation grants (sometimes called renewal grants) provide additional funding to extend a previously awarded project. They allow successful programs to continue beyond the initial grant period.
Eligibility requirements: To qualify for continuation funding, organizations typically must:
Successfully complete the initial grant period
Meet or exceed proposed outcomes
Submit all required reports on time
Maintain good communication with the funder
Demonstrate ongoing need for the program
Example: The Substance Abuse and Mental Health Services Administration (SAMHSA) offers continuation grants for successful substance abuse prevention programs.
Reporting and performance expectations: Continuation grants typically require:
Detailed progress reports on initial grant outcomes
Evidence of program effectiveness
Clear plans for the continuation period
Budget justifications for additional funding
Sustainability planning
Strategies for securing renewal funding:
Build relationships with program officers throughout the initial grant
Document successes and lessons learned meticulously
Collect compelling testimonials and success stories
Address any challenges transparently with solutions
Begin the renewal process early, before the initial grant ends
BTW, Grantboost’s performance metrics can help track grant effectiveness, helping refine strategies for success.
Understanding the funding flow: Pass-through grants occur when one entity (typically federal government) provides funding to an intermediary (usually state and local governments), which then redistributes the funds to end recipients (nonprofits or other specific types of organizations).
Identifying pass-through opportunities:
Research state departments that administer federal programs
Connect with local governments agencies that receive funds from block grants
Join coalitions and networks that receive funds through collaborative funding
Monitor state budget allocations of federal funds
Example: The Community Development Block Grants (CDBG) program provides federal funds to states and localities, which then distribute them to nonprofits addressing community development needs.
Working with intermediary organizations:
Build relationships with grant administrators at the state or local level
Understand both the original funding source requirements and any additional requirements added by the intermediary
Attend information sessions specific to the pass-through program
Consider partnering with other types of local organizations to strengthen applications
Compliance considerations:
Multiple layers of reporting requirements
Potentially complex reimbursement processes
Need to track both federal and state regulations
Different timelines for different aspects of the grant
Definition and distribution methodology: Formula grants are non-competitive awards distributed based on predetermined formulas, often using census data or other objective criteria. Recipients who meet the eligibility requirements automatically receive funds based on the formula calculation.
Eligibility requirements: Common formula factors include:
Population size or density
Poverty rates or economic indicators
Geographic considerations
Service area characteristics
Number of individuals served
Demonstrated need based on objective metrics
Example: The Title I program provides federal education funding to school districts based on the number of low-income students they serve.
Finding formula grant opportunities:
Research federal programs with formula distributions
Connect with state government agencies that administer formula grants
Review eligibility requirements for formula-based programs
Monitor census data and demographic data that may affect formulas
Application process:
Verify if you’re eligible based on formula criteria
Complete required registration and certification processes
Submit documentation demonstrating you meet the criteria
Prepare to implement programs that align with funding requirements
Read Next: DHHS Grants - 7 Facts on the Department of Health and Human Services
Grants are also classified by their intended use or purpose. Understanding these categories can help you match funding opportunities to your organization’s specific needs.
These grants fund the creation, implementation, or expansion of specific projects or services. They typically cover:
Staff salaries for program delivery
Program supplies and materials
Participant recruitment and support
Program evaluation
Example: A foundation grant to launch a new after-school tutoring program for underserved youth.
Capacity building grants strengthen an organization’s internal infrastructure and effectiveness. They may fund:
Strategic planning processes
Board development and governance
Staff professional development
Technology upgrades
Evaluation systems
Example: The Ford Foundation’s BUILD initiative provides multi-year funding to strengthen organizational infrastructure.
Research grants support systematic investigation into specific issues or questions. They typically fund:
Data collection and analysis
Subject recruitment and compensation
Research staff time
Publication of findings
Example: The Robert Wood Johnson Foundation funds research on health equity and social services determinants of health.
These grants support physical infrastructure needs, including:
Building construction or renovation
Major equipment purchases
Land acquisition
Facility improvements
Example: The Kresge Foundation provides grants for capital projects that advance opportunities in underserved communities.
General operating grants provide unrestricted funding that can be used for any legitimate organizational expense, including:
Administrative salaries
Rent and utilities
Insurance and legal fees
Strategic planning
Example: The MacArthur Foundation provides some grantees with unrestricted fellowships to talented individuals.
Emergency grants address urgent, unforeseen needs such as:
Natural disaster response
Public health crises
Unexpected financial shortfalls
Rapid response to emerging community issues
Example: The American Red Cross provides emergency grants to organizations responding to natural disasters.
Side note: Our user-friendly survey lets you quickly share your team, mission, and funding goals to get started. This simple step helps GrantBoostAI generate the most relevant and personalized grant writing support
The grant landscape continues to evolve, with innovative approaches emerging that blend traditional philanthropy with new funding models.
Hybrid models combine grants with other types of revenue sources, such as:
Program-related investments (PRIs): Below-market loans from foundations that combine charitable purpose with return of capital
Recoverable grants: Funding that converts to a loan only if the project succeeds financially
Pay-for-success contracts: Grants that pay based on achievement of predetermined outcomes
Matching grants: Funding contingent on raising additional dollars from other sources
Consortium grants fund collaborative projects between multiple organizations working together on a shared initiative. Benefits include:
Larger funding amounts than individual organizations might access
Shared risk and responsibility
Complementary expertise and resources
Greater collective impact
For organizations working globally, international funding sources include:
Multilateral organizations (UN agencies, World Bank)
Foreign government aid agencies (USAID, DFID)
International foundations (Open Society Foundations)
Corporate global giving programs
Example: The Bill & Melinda Gates Foundation provided substantial international grants for global health and development initiatives.
This emerging approach involves community members in funding decisions through:
Community review panels
Participatory budgeting processes
Beneficiary-led funding committees
Collaborative decision-making structures
Impact investments blend traditional philanthropy with social enterprise approaches:
Seed funding for social enterprises
Grants with equity components
Innovation challenges with prize funding
Accelerator programs with grant components
Example: The Skoll Foundation provided both grants and investments to social entrepreneurs addressing global challenges.
Read Next: How Long Does It Take to Get a Grant? Your Essential Timeline Guide
Securing grants is just the beginning—managing them effectively and building a sustainable funding strategy is equally important.
A balanced grant portfolio typically includes:
2-3 government funding sources (mix of federal, state, local)
3-5 foundation relationships (private, community, corporate)
Multiple grant types (program, operating, capacity building)
Varying grant sizes (small, medium, large)
Benefits of diversification:
Reduced dependency on any single funder
Protection against policy or priority changes
More stable overall funding stream
Opportunity to leverage different types of support
Practical diversification steps:
Map current funding sources and identify gaps
Research new funders in underrepresented categories
Develop relationships before needs are urgent
Create a grant calendar to manage multiple application cycles
Build internal capacity to manage different types of grants
A sustainable approach to grants involves:
Strategic alignment: Only pursuing grants that match your mission and strategic plan
Capacity matching: Ensuring you have resources to implement and manage grants successfully
Cost recovery: Including full costs (including indirect) in grant budgets when possible
Relationship building: Developing ongoing partnerships with funders beyond transactions
Succession planning: Ensuring grant knowledge isn’t concentrated with a single staff member
Portfolio assessment questions:
Does each grant advance our mission and strategic priorities?
Do we have the capacity to successfully implement each grant?
Are reporting requirements manageable with current staffing?
What percentage of our budget relies on renewable vs. one-time grants?
How much staff time is spent on grant administration vs. program delivery?
Effective grant management includes:
Tracking systems: Calendars for deadlines and deliverables
Documentation processes: Organized record-keeping for all grant activities
Financial management: Separate tracking for restricted funds
Evaluation methods: Systems to collect required outcome data
Communication protocols: Regular updates to funders beyond required reports
Common compliance challenges and solutions:
| Challenge | Solution |
|---|---|
| Missing reporting deadlines | Create a master calendar with 2-week advance reminders |
| Insufficient documentation | Implement real-time data collection systems |
| Budget variances | Monitor expenses monthly and request amendments early |
| Staff turnover | Document all grant requirements and processes |
| Changing funder requirements | Schedule regular check-ins with program officers |
Effective grant management tools include:
Grant management software: Platforms like Instrumentl, GrantHub, or Foundant
Project management tools: Asana, Trello, or Monday.com for tracking grant tasks
Financial systems: QuickBooks Nonprofit or other types of fund accounting software
Data collection tools: SurveyMonkey, Google Forms, or sector-specific databases
Document storage: Shared drives with consistent naming conventions
Free and low-cost resources:
Foundation Center’s Grantspace (training and resources)
Grants.gov learning center
State nonprofit associations
Peer learning networks
Funder-provided technical assistance
Grantboost’s streamlined workflow allows teams to focus on their mission rather than administrative tasks by automating the grant writing process and ensuring consistency across applications.
Read Nex:
Grant Writers for Nonprofits: Find Your Perfect Match
Grant funding is essential for many organizations, but navigating the complex landscape can be challenging. The right approach can make all the difference in your success rate.
Match your mission to the right types of grants - Identify grants that align with your organization’s goals and capabilities for higher success rates
Develop relationships with funders before applying - Most successful grantees build connections with program officers and understand funder priorities
Create systems to track deadlines and read grant requirements carefully - Organized processes prevent missed opportunities and ensure compliance with reporting
Invest in quality grant writing resources - Professional writing or AI tools dramatically improve application quality and success rates
Diversify your grant portfolio across categories - Relying on just one type of grant creates financial vulnerability for your organization
For organizations looking to streamline their grant writing process, Grantboost offers an AI-powered solution** that generates tailored grant proposals** based on your organization’s details and specific grant opportunities.
With over 5,000 grant writing teams already using the platform and processing 3.5 million+ words monthly, Grantboost helps secure funding faster and more efficiently.
For individuals and teams looking to secure more funding with less effort. Streamline your grant-writing process, stay organized, and achieve better results with proven templates and AI-driven support.
Read Next: Best AI Grant Writing Tools (2025)
