A guide to winning grants for new nonprofits
The beginning of a nonprofit’s journey is typically marked by excitement, energy, enthusiasm for the mission, and the feeling that everyone is ready to roll up their sleeves and dive into the work of serving the community.
But there’s a key element that needs to be in place at the outset, before any work can begin.
Namely, funds.
If you’ve done even a cursory search of grant opportunities and read the requirements carefully, you’ve probably discovered that most foundations don’t make grants to nonprofits that are less than 2 or 3 years old. But how do you secure funding when your organization is basically a baby nonprofit?
Establishing a track record is a crucial first step.
When you begin applying for grants and program officers are looking over your applications, they’re not necessarily interested in whether you have been awarded previous grants or not. Sure, those are helpful, no question.
But foundations ARE looking to see if you can manage money and projects, and whether you have strong community support.
So how do you demonstrate that when you’re so new?
Here is some guidance to help you do just that.
Create diverse revenue streams.
Grants are not the only type of funding you can get to help you develop a track record. Fundraising, selling services and products, events, crowdfunding, donor contributions – all of these are good ways to build a history as an organization that is capable of managing money and building community support. Need fundraising ideas? Here’s a fun source. There are virtually endless ideas for innovative and engaging fundraisers. From the tried and true (think car washes and bake sales) to digital fundraisers that take place on social media, to events geared to singles, art lovers, kids, foodies, exercise enthusiasts, gardeners, pet owners…. you have almost too many options to count. Put few on your nonprofit’s calendar and get something started.
Start local.
Apply for funding to foundations within your geographic area. Make sure you have a specific program in mind that aligns with their stated focus.
Corporations such as Walmart, Target, Exxon Mobil, Autozone and Marshall’s have foundations that offer grant funding for projects in local communities where a store is located. Many brands that sell products in those stores have foundations as well. Think Newman’s Own, Levi Strauss, Stonyfield Farms, Forever 21, and many, many more. There are even digital businesses (such as Google Ads) that have grants programs. It’s rare to find a large corporation that DOESN’T have a foundation, so take a look around your community (or on the shelves of your local grocery and department stores) and do some digging. Make sure you meet their geographic criteria (Auto Zone, for example, provides funding primarily in greater Memphis) and that your mission aligns with their cause area.
If you have a religious nonprofit, seek out funders that have a stated interest in funding projects with a religious orientation or specifically within a certain denomination. These opportunities may or may not have geographic limitations, but they do need to share your mission.
Another option is to seek out local and state government agencies that serve your target population. Here’s an example from the city of Cleveland, Ohio. This municipality participates in community development block grants that directly benefit low-and moderate-income residents There are many potential projects that would qualify for these grants. Playground rehabilitation, crime prevention, transportation are just a few examples. And this website for the state of New Jersey features grant opportunities for nonprofits with focus areas ranging from agriculture to transportation.
In general, it’s best to start by requesting small amounts, as low as $500, up to about $5000. These will seed the ground to fund a specific project so you can start building your portfolio.
Do an association tour.
Local clubs such as Rotary Clubs, Women’s Clubs, Chambers of Commerce and others often highlight local nonprofits. Find out about their events and see if you can get a speaking slot, if only for a few minutes. Many of the people in these rooms will be on foundation boards, and are interested in knowing about the activities of nonprofits in their community. You may be able to make some valuable connections.
Leverage the foundation connections of your board members.
Do you or anyone from your nonprofit or on your board know the board members of any foundations? Start to build relationships in those capacities. Think “six degrees of separation.” Everyone knows someone! The beauty of this approach is that it can give you a leg up on connecting with a foundation that does not accept solicitations. If you know someone who works for the foundation, you may be able to convince them to consider your nonprofit or allow you to send a letter of interest.
Check out Federal grant opportunities.
Grants.gov is a free database of Federal grants that shouldn’t be overlooked in your search for funding, even as a startup. You can raise as much as $25,000 (or more) with a single grant. However, it is an enormous website, and you should plan to set aside plenty of time to learn how to use it. Check eligibility requirements carefully for the grants you are interested in. If you neglect this step, you are likely to waste many hours of valuable time in the application process, only to have your application declined because your nonprofit wasn’t eligible.
Use the site to research opportunities that look like a good fit for your organization. You will have to demonstrate ability to manage money and projects (See suggestions 1 and 2), and invest substantial time on the application process, but these grants can be well worth your while and provide crucial seed funding if you get one awarded.
For grants.gov guidance, we recommend listening to Holly Rustick’s Grant Writing & Funding podcast, episodes 27, 28 and 29.
Partner with a larger nonprofit.
Another option for small startup organizations is to leverage the credibility of a more established nonprofit by joining up with them as a subgrantee. In this capacity, you will work with the larger organization to conduct grant activities under their 501c3 status. This will enable you to build your reputation as a responsible manager of funds and projects while receiving grant funds to run your programs. In some cities or regions, nonprofit umbrella organizations exist for the express purpose of helping to build capacity for smaller nonprofits. An additional advantage to this approach is access to the larger organization’s grant management archive – a valuable resource as your nonprofit grows and begins to write its own grants. As a subgrantee, including in your portfolio a mention that you have sub operated a portion of a grant will boost your own credibiilty and track record.
If you choose this option, make sure that you and the cooperating nonprofit or umbrella organization both understand the responsibilities of fiscal sponsorship.
Get all your ducks in a row.
Last but hardly least, make sure that you have all the necessary paperwork before you start applying for grants. You can work on gathering these documents while you seek out other funding opportunities. These items include:
IRS 501(c)3 letter
List of board members including employer, start date, and service term
Annual Report/Impact Report
Board-approved strategic plan
Employee list with salary information
Current operating budget
Previous year's profit/loss and balance sheets
Most recent audited financials
State Solicitation of Contributions Letter (if required by state)
Current W9 forms
Not all grant applications will require every item on this list, but most will require many of them. Having all of these documents on hand will save time later when you are scrambling to meet an application deadline.
Maximize your funding odds by pursuing proven grant research strategies.
Getting a new nonprofit on its feet can take considerable time and resources. However, you can optimize your chances of success by pursuing tested strategies for jumpstarting your funding stream. Here is a useful guide for new nonprofits looking to research grant opportunities. Choose the approaches that make most sense for your organization’s mission and goals, and you can look forward to rewarding and potentially lucrative partnerships while your organization finds its footing and grows its capacity to serve your community.