6 Types of Relationships Nonprofits Can Build with Grant Funders

Imagine a world where every funder relationship furthers your nonprofit’s mission. Sounds ideal, right? 

However, not every funder relationship is created equally. In fact, we are going to share with you 6 different types of relationships nonprofits can build with grant funders and how to approach each of them strategically. 

We will explain how each of these relationships work, how to cultivate them well, and how you can best leverage them to support your mission.

Understanding One-Time Grants

One-time grants often result in transactional funder relationships. 

One-time grants are typically awarded for specific projects or initiatives. In these cases, the relationship between your nonprofit and the grant funder centers around this single transaction. 

For example, the Danone Institute of North America is offering $50,000 in grant funding to five recipients to implement a specific, one-time project that contributes to the nutritional health of their communities. 

One-time grants are usually not renewable, meaning that your relationship with the grant funder typically ends once the grant (the transaction) has ended. However, that doesn’t mean that these relationships still can’t make an impact. Keep reading! 

Maximizing Impact With Short-Term Funds

Just because your relationship with a grant funder is short doesn’t mean you can’t maximize the impact of your partnership. 

For example, short-term funding can be a great way to jumpstart new initiatives or manage short-term projects or programs. One-time grants are also generally less complex than larger, recurring funding opportunities, meaning you may have more freedom to implement the funding as you see fit with fewer reporting requirements.

Finally, short-term funding can be a great way to meet the immediate needs of your community. 

When a pressing issue arises, grant funders may support your nonprofit with the funding needed to fill that critical gap. So even though your relationship might come to an end after that immediate need has been fulfilled, the impact of your transactional partnership is still great.

The Power of Multi-Year Funding

Some funders—particularly government grant makers—offer multi-year funding opportunities. 

These strategic partnerships often provide a stable funding stream for your nonprofit’s programs and initiatives. Being able to anticipate this funding year after year allows your team to make strategic decisions in advance. 

However, the ongoing nature of these partnerships mean they require more time and commitment from your staff. Therefore, you need to ensure your nonprofit has the capabilities to cultivate these relationships over the course of the funding. 

The WSFS Cared Foundation is a good example of a funder that offers multi-year grant opportunities. 

As long as you meet the eligibility requirements, rolling funds can be a perfect source of ongoing funding for your projects.

Capacity-Building Grants

Some funders also offer capacity-building grants. These types of grants contribute to the long-term health and sustainability of your nonprofit because they are designed to support your internal operations. 

For example, a funder could award your organization a capacity building grant to hire and train a dedicated grant writer—allowing you to improve and maximize your fundraising efforts! 

These strategic partnerships move beyond the money as funders want to invest in the long-term health of your organization. 

The Foundation for Enhancing Communities is a good example of a capacity-building grant. This local grant can be used for projects that strengthen the specific nonprofit organization, such as building infrastructure, technical assistance, and staff development. 

Co-Funding With Multiple Funders Who Share a Common Vision

There are times when you may find that potential grant funders simply can’t cover the cost of your project or initiative. This is where collaborative funding for nonprofits comes into play. If one funder simply doesn’t have a large enough budget, you can seek out co-funding from other funders who share the same common vision as you.

Collaborative funding for nonprofits not only gives you a larger budget to work with, but also helps to diversify funding sources and enhance the impact of your nonprofit's work. 

That being said, more funders may mean more reporting and compliance requirements. But, it also means you have multiple relationships to lean on and to learn from. 

Joint Initiatives: Partnering for a Cause

Nonprofits can also partner with funders on joint initiatives, where both parties contribute resources and expertise to address complex social issues together. 

For example, if your cause is feeding the homeless in your city, maybe there is another foundation in your local area that has a similar mission. You can either contact them directly or use a grant database like Instrumentl to see if they have grant funding available to partner for your common cause.

Grant funders love partnering with nonprofits that have common goals and are more likely to share their resources within these collaborative relationships.

Technical Assistance: 

Many grant funders are interested in sharing their own knowledge and expertise so that your organization’s leaders and staff can learn from the best.

Some funders provide technical assistance, such as workshops, training, or access to experts, to help nonprofits improve their operations and achieve their goals. 

For example, the Pennsylvania Department of Community and Economic Development offers both grant funding and technical assistance to financially distressed local governments. 

Mentorship and Guidance

Once you are awarded grant monies from a funder, you can also inquire about any mentorship opportunities they may also provide. Funders want you to succeed with their awards, so they may offer guidance or coaching to your team. 

By seeking out this mentorship, you show funders how much you value their support and expertise. It also gives the funders the opportunity to invest in your partnership beyond the grant funding. 

If mentorship isn’t specified in the grant, you can always ask! It never hurts to open that line of communication to build a stronger and more engaging relationship.

Supporting Advocacy Efforts

When there’s an incredibly strong alignment between your mission and a funder’s vision, it’s possible that they could become an advocate for your cause. 

These are some of the most powerful relationships you can build with funders. Through strategic engagement and careful cultivation, the right funder could become a champion for change, whether by influencing public policy or providing resources for advocacy campaigns.

Leveraging Thought Leadership

Your nonprofit could also build relationships with funders who are thought leaders in their field and leverage their expertise to advance your mission and advocate for social change.

Not only do these funders have huge platforms, but they are also highly regarded in their fields. Establishing a relationship with them can help increase your organization’s credibility while also providing you with access to valuable expertise. 

For example, the Bill and Melinda Gates Foundation has an entire page on their website that features their work and how their partners are tackling global issues. 

Cultivating Shared Values and Visions

The most successful and sustainable grant funder relationships are built on a foundation of shared values and visions.

When applying for grant funding, it is so important to prioritize funders who align with your mission and vision for the future. This strategic alignment will set you up for long-term success as you both work toward furthering your shared cause. 

Aligning Goals for Mutual Benefit

Nonprofits should work closely with funders to ensure their funding priorities and strategies align with their strategic goals and objectives. The more closely aligned your goals are, the more benefit you both will get out of your partnership. 

Whether you are writing a proposal, creating an impact report, or just sending the funder an update about your project, make sure to clearly emphasize your shared objectives. 

Grants databases like Instrumentl are fast and efficient ways to find funders whose goals align with your nonprofit’s mission. You can input your nonprofit’s funding focus and search criteria and then Instrumentl will curate a list of potential funders and active grants in seconds. 

Understanding the different types of relationships you can build with grant funders will help you make the most of your partnerships. Remember—cultivating these relationships takes time and effort, and just because the grant has ended doesn’t mean your relationship is over. For more tips and insights on building relationships with funders, check out this comprehensive guide.