9 Best Practices and Strategies for Building Relationships with Grant Funders

Building relationships with grant funders should be one of your top priorities when you’re looking to protect the overall health and well-being of your organization. Seriously, it’s that important.

These relationships that you cultivate can lead to long-term funding opportunities, transforming the future of your nonprofit’s operations. 

Because it’s so critical to cultivate strategic, long-term funder relationships, let’s go over nine of the best practices to help you do it. By the end, you’ll start viewing your nonprofit partnerships in a new light and be ready to revamp your funder outreach strategies based on these new insights.

Sound good? Let’s dig in!

The most important nonprofit grant relationship management strategy is to personalize your outreach. Funders can tell when you’re using generic communications, and if you’re not willing to invest the time into preparing personalized content for them, they won’t want to invest in you.

What are some easy ways to tailor your approach? Here are a few strategies: 

• Address communication personally. Make sure to use the right name and title. Verify it’s accurate prior to sending. You can use Instrumentl’s 990 snapshots to help you identify key people at a grant-making organization. 
• Align your proposals with your funder’s mission and priorities. As you’re applying for grants, make sure to speak to how your nonprofit can help them advance their goals. Reinforce the impact you can make together. 
• Make sure your proposals meet the requirements, including any unique formatting or documentation needs. Incomplete applications will often be disqualified, no matter how compelling they are. 

Of course, there are certain elements of your proposal that won’t change from application to application, like your organization’s mission statement or background information. However, you still want to look for ways you can enhance it to stand out to potential funders.

If you’re not sure how to get started, here’s a grant proposal template to kickstart the creative process.

The nonprofit community is small, so you want to leverage what connections you have to make an introduction to funders. 

These personalized approaches:. 

• Help you stand out from the pack, especially when it’s a highly competitive grant. 
• Establish trust from the outset because someone else can vouch for you.
• Build rapport because you have a mutual connection to help break the ice. 

Grants are competitive, so you need all the advantages you can get to stand out. If you’re not sure if you have mutual connections, here are some suggestions on where to start:

• Check out their About Us page and board members.
• Look at their social media pages (LinkedIn, Facebook, Instagram, etc.).
• Reach out to your own network, including your Board of Directors and their connections.
• Use Instrumentl’s recipient profile feature to connect with other nonprofits who have been funded in the past by the prospective funder.

The Bill & Melinda Gates Foundation’s LinkedIn page is a great example. You can see their followers, view the employees, and see what job opportunities are available. Looking at the different elements, you can see if there are connections you have that you want to leverage. 

You’ll never know what connections you may have if you don’t actively research and reach out.

Another best practice for building relationships with grant funders is to implement a systematic engagement plan. 

You should develop a document that outlines all your communication touchpoints with your funders. This can include:

• Program updates
• Quarterly reports
• Monthly newsletters

You should also leave space for organic communication touch points as well—not everything has to be structured and planned. 

These regular updates help you bring your funders along the journey with you, making them feel like they are part of the solution rather than just a source of funding.  

To make sure you keep up with these updates, put reminders on your calendar. Instrumentl has a fantastic grants calendar that you can use to collaborate with your team. Filter by projects and more to stay on track. 

There is an inherent power in storytelling, so it’s critical that you craft the right narrative. Here are some tips to keep in mind as you look to enhance how you’re building relationships with grant funders.

• Highlight the human element. Use actual stories about the impact you’re making. This will help it feel more real to funders.
• Use data to back up your claims. This will add to your credibility and help funders see the real changes happening.  
• Show, don’t tell when possible. Compelling images can drive the point home, helping funders see the community you’re striving to empower and experience a part of your work in action. 

Together, these elements provide a well-rounded picture for your funders, demonstrating the impact and effectiveness their contributions have on your organization’s overall mission.

Save the Children does a fantastic job of doing all three of these on their website. Funders can get a clear picture of where their resources are going and the immediate difference they make in a community. 

Effective funder communication is critical. It’s easy to boast about all the good work you’re doing, but it can be intimidating to share about the challenges you’re facing. 

Perhaps you hit a snag you didn’t anticipate or something is costing more than you thought it would. It can be tempting to try to sweep it all under the rug and hope funders don’t notice. 

However, it’s important to build trust through transparency and encourage a sense of collaborative problem-solving. You can leverage their expertise, network, or capabilities to overcome the issue quicker than if you had tried to solve it on your own.

Fostering open and transparent communication with funders helps establish trust and makes them feel valued for more than just their grant.

Building relationships with grant funders is about more than just the money. Sure, your relationship will always have a financial component because they are funding your work, but you can also leverage their capabilities and engage them in different ways.

• Invite them to events, site visits, and more. Help them see and hear about your work without additional financial commitments. 
• Involve them in the decision-making processes. Let them help pick the name for a program element or weigh in on where the next iteration of your project should be. They are experts in the field, so take their opinions to heart.
• Involve them in nonprofit activities. Invite them to volunteer with you or take part in an effort virtually. 

Kemarah’s Chasing Rainbows helps support hospitalized children in Texas, and they hosted a fundraising gala to bring supporters together to help advance their mission. Donors, funders, and community partners all came together to help make even more children smile with toys and other necessities during their treatments. 

Remember, the more you can engage your funders beyond the grant, the more invested in your organization they will feel.

You know you have a solid plan in place. That’s why you got the funding in the first place—but that doesn’t mean that you don’t have opportunities to improve.

You should invite funders to contribute ideas as you move through your project. Encourage them to provide feedback and see if they have suggestions on what you could be doing better. 

The more you can do to make them active participants in your nonprofit’s mission, the better. They want to see your project succeed. That’s why they funded you, so don’t be afraid to leverage their expertise to make it happen.

Not all funders like to be recognized in the same way, so make sure that you do so appropriately within their comfort level. That includes both publicly and privately.

Here are some ideas: 

• Shout them out on social media
• Share their names as part of a donor roll on your website
• Send personalized notes

You want to share regular and heartfelt expressions of gratitude in various forms to help acknowledge your funders’ contributions. How can you know how to recognize them appropriately?

• Provide an opportunity for them to share virtually with you their preference.
• Outline recognition channels in your grant proposal so you can discuss and create a plan.
• Ask them their preference over the phone.

The World Wildlife Fund thanks donors by sending them a picture, letter and stuffed animal of a symbolic animal that they adopted. While most funders won’t want something tangible because they’d rather see their funds in action, it’s an idea for how to get creative in thanking them.

The more thoughtful you can be about how you thank your funders, the more appreciated they will feel. This is an incredibly powerful tool as you are building relationships with grant funders.

Building relationships with grant funders is never done. You need to regularly assess the health of your relationship. Use all the tools in this list to help you do so.

Take note of any changes. If a funder suddenly becomes less communicative, don’t be afraid to check-in to see if there’s anything you can do to help. Regularly taking the pulse of your funder relationships will help you make adjustments to your strategies as needed and help you preserve these connections. 

The ownership of maintaining these funder relationships is on you, so make sure you take the responsibility seriously.

By now, you should understand the importance of viewing funder relationships as partnerships rather than simply transactions. It’s up to you to maintain these relationships and cultivate them to evolve over time. You can do so by:

1. Personalizing your outreach
2. Leveraging your network
3. Creating an engagement plan
4. Using storytelling and data
5. Fostering open and honest communication
6. Engaging funders on different levels
7. Seeking feedback
8. Offering recognition
9. Nurturing the relationship

‍Instrumentl can help you locate new funders, track all your funder outreach, and so much more. Sign up for your free, 14-day trial today to see how it can transform your nonprofit grant management.