How to Evaluate a Funder Before You Apply for Their Grant: Ultimate Guide

Unlocking more success with your grant funding starts with choosing the right funder.

Applying for a grant is a lengthy, complex and strenuous process. Evaluating grant funders— deciding if the grant is even worth your time— will save you a lot of pain.

This is what we will discuss here. Here’s how you can properly research funders to determine if they’re worth applying to

An essential part of grant prospecting is evaluating potential funders to see if there is a grant alignment before diving into the laborious grant application process. 

Should you and your team take the time to apply for this grant? 

Grant research can be confusing and overwhelming when you have hundreds of opportunities at your fingertips. This is why first evaluating funders will help save you time when trying to find grant monies that align with your nonprofit’s mission, needs, and goals.

Whether the funder is a government entity, private corporation, or even another foundation, you will want to conduct your own funder research before getting too far into the grant application process. That way, you don’t waste time chasing irrelevant opportunities just because someone on your board suggested it.

Funder evaluation is a step-by-step process that helps determine if a particular funder is a suitable match for your nonprofit’s needs. This includes defining your needs and outlining the budget and projected costs (i.e., programming, salaries, supplies, etc.). In addition to budgeting the grant itself, you should also determine your nonprofit’s overall budget to see if the funds coming in (i.e., donations, fundraising, etc.) would set off any unexpected costs.

Proper funder evaluation helps your nonprofit team establish whether a grant meets the needs of your nonprofit’s mission and goals. In addition, it also helps determine whether your nonprofit is eligible for the grant. 

This is why evaluating funders is crucial. Your grant application is the first impression you are giving a funder, but applying for grants takes time. In addition, there are application requirements and deadlines that could make or break you getting an award. Therefore, there are numerous goals you will want to achieve with funder evaluation:

• Determine whether your nonprofit is eligible for the grant
• Evaluate the mission and costs of the program or project
• Analyze the funder, its geographic location, and past awards
• Review the funder’s fields of work and areas of interest

These are just a few steps that should help you come to one important conclusion: should you and your team take the time to apply for this grant? 

Luckily, you can use Instrumentl to streamline this funder evaluation process. 

You may have already used Google to evaluate funders, but Instrumentl is a faster and more efficient way to evaluate funding to find grants that actually match your nonprofit’s needs. Let’s explore why below.

You have lots to do but a shortage of hands. 

That’s why over 3000 grant writers and managers use Instrumentl. It matches you with funders who are a good fit for you.

Let’s go through what funder evaluation in Instrumentl looks like.
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1. Review The Grant Details and The Funder

Once you create a profile in Instrumentl and share details on your nonprofit, you will be matched with relevant funders. 

Your funding opportunity matches are on the left of your screen, and the details are on the right.

You will notice there are “FUNDING OPPORTUNITY MATCHES” and “FUNDER MATCHES.” 

• Start with the “FUNDING OPPORTUNITY MATCHES” because they are active and open grant opportunities. 
• “FUNDER MATCHES” are potential funders whose interests align with yours and who may be invite only or not have any active RFPs for grants. 

By clicking on a funder’s profile, you can quickly analyze important funder evaluation information in the “FUNDER OPPORTUNITY” and “FUNDER 990 REPORT” tabs. 

Let’s start with the “FUNDER OPPORTUNITY” section, which provides a snapshot of the funder.

Review an overview of the funder’s mission, grant focus area, type of support, and priority funding areas. 

Instrumentl summarizes key information so you can see:

• An overview of their finances (assets, total giving, average amount)
• Contact details (EIN number, phone, websites, address)
• Key people (directors, board members)
• Key financial stats over time (total giving, average and median amount)
• Past grantees
• Their openness to new grantees
• The causes they support

Next to the “FUNDER OPPORTUNITY” section is the “990 REPORT.” 

Typically, a Form 990 includes:

• Areas of giving
• The number of grants awarded to current and new grantees
• Their openness to new grantees
• Descriptions of programs and services
• Eligibility requirements
• Revenue
• Unrelated business income
• Expenses
• Geographic focus
• Causes it supports
• And more

The “FUNDER OPPORTUNITY” and “FUNDER 990 REPORT” tabs will quickly tell you if a potential funder aligns with your nonprofit’s mission. 

This is important to complete BEFORE you start the application process. 

To dig deeper, let’s look into this funder’s 990 report.
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2. Look Into The Funder's Background and Reputation

You can analyze a funder’s background and reputation within Instrumentl to gain a better understanding of their mission, priorities, and giving history. 

We are still in the funder’s 990 report tab in our funder evaluation, where we can find an overview of key funder information.

Review the funder’s contact information and key people to see if you already have a connection with the funder. 

Maybe one of your staff or board members went to school with a key individual. Or maybe there is a neighbor who works for this funder that you would not have discovered otherwise. This could be the door to making an early connection with the funder.

Now let’s go back to the “FUNDING OPPORTUNITY” tab to review the funder’s values.

This is where you can evaluate whether the funder’s values align with your nonprofit’s mission. 

Our example below clearly states the funder’s mission and focus areas. You can also document any opportunity notes about this funder while you are evaluating their overall mission to help organize your research for later use. 

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3. Dig Deeper Into The Grant Details and Requirements

The “FUNDING OPPORTUNITY” tab shows the specific areas this funder has supported and how much was given so you can evaluate the size of the funder’s grants.

In our example, we found a grant that specifies an amount of $50,000 and five different fields of work. Some grant amounts, however, may be “unspecified.” 

It is important to look for funding that seems relevant to the size of your nonprofit and its ventures. For example, if you are a small nonprofit, you probably don’t want to spend your time applying for a multi-million dollar project your team could not fulfill.

Instrumentl also highlights specific fields of work in either gray, yellow, or green colors. These colors explain why the grant matches with your project: 

• Green - An exact match to your project’s keyword(s).
• Gray - Keywords that may exist in this specific funding opportunity, but not necessarily in your project.
• Yellow - Keywords that are an umbrella category that your project’s keyword(s) fell under.

It is important to determine what specific fields match your nonprofit’s interests to better determine if the funder (and the project) aligns with your nonprofit’s areas of interest.

‍You will also want to evaluate the funding uses to determine whether it is restricted to a specific project or program or more general unrestricted use. 

There are numerous differences between restricted and unrestricted funds. Restricted funds are usually set aside for a specific use and are more common than unrestricted funds (which can be used for anything the nonprofit chooses).

This area also shows the funding duration, whether the application deadline is one-time funding, multi-year grants, or on a rolling basis. 

Many applications are denied because of a missed application deadline. 

When evaluating a funder, determine if you will have time to apply for the grant or if the deadline is too soon.

Is your nonprofit even eligible for this funding opportunity? 

You will also want to evaluate the eligibility requirements to see if your nonprofit meets the eligibility requirements for this grant. 

Just because a project may perfectly align with your nonprofit’s mission doesn’t mean you are actually eligible for the grant itself. 

When looking at grant opportunities, always check the eligibility first to see if you have a chance.

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4. Find Out If The Opportunity Funds Your Focus Areas

Analyze the causes the funder usually supports. What specific sectors or issues are listed? 

Instrumentl calculates this based on a funder’s historical 990 submissions. Without Instrumentl, you’d have to crunch this data manually, comparing years of 990 forms. 

Use the NTEE Codes to see if your nonprofit’s mission matches the priorities of the funder. 

If you notice there is a lot of interest in your project area (for example the top three to five results), then this usually means the funder is aligned with your interests.

 If you find interest in your project area, you can continue your funder evaluation and dig deeper into the opportunity.

Our example clearly illustrates that the main focus of this funder is the “Food, Agriculture & Nutrition” field. Not only that, but Instrumentl also documents: 

• The amount of awards given.
• The average grant size.
• The mode and the median of the grants. 
• The actual number of grants given for this area. 

You can also see past grantees and if they are similar to yours.

This is important in a funder evaluation because it is essential to review who has received grants in the past, the grant sizes, and the purpose of the grants. That way, you can determine what the funder’s priority areas are to decide if it is worth your time to apply for the grant.

In our example below, we found 452 awards given by this funder over the past eight years. If you hover over your state, it will give the exact amount of awards given there.

There’s even a search tab where you can search specific past grant initiatives that were located in your state. If you find that the funder has awarded grants to nonprofits that are similar to yours and located in your county or state, this could mean it is worth taking the time to apply for in the future.

Again, when we search California, we are given the following information specific to that state:

• The name of the grant recipient.
• The year of the award.
• Their geographic location.
• The amount of the grant.
• The purpose of the grant.

Pro tip: It is important to take the time to review the information of grant recipients by state to evaluate whether the funder has given money in the past to purposes that align with your own nonprofit’s mission and goals. 

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5. See If The Funder Is Openness to New Grantees And How Much They Give

Don’t waste time on a funder that only gives money to the same causes every year. 

Evaluate whether the funder is even open to new grantees. Typically, you should focus on funders who give more than 30% of their awards to new grantees. 

If Instrumentl shows that the percentage is less than 30%, you probably want to stop your funder evaluation and look for another funding opportunity. It is more than likely that they will prioritize organizations they are familiar with over you.

You can also determine where their past grantees were located, as working with local funders is a great way to get initial funding as a new nonprofit since you can actually meet face-to-face.

Our example is promising because nearly half of this funder’s awards - 48% - have gone to new grantees. This is over the 30% threshold, so we will continue our funder evaluation.

Instrumentl also shows you the median grant amount the funder has given to both new and repeat grantees so you can further compare the results. 

For our example, the median amount they have given to repeat and new grantees was the same in 2021 - they were both $10,000.

Remember earlier when we said to evaluate the “FUNDER OPPORTUNITY MATCHES” section first? 

For this last part of your grant funder evaluation, you should determine whether the funders accept unsolicited proposals. These are called invite-only grant funders and can be filtered in the “Funder Matches” tab.

Invite-only grant funders are foundations or organizations that have limited their applicant pools to recipients they have asked to apply for grants. Even if you have not been contacted by an invite-only funder, you can still evaluate them to see if their purpose aligns with your mission.

NOTE: Unless your nonprofit already has a relationship with an invite-only grant funder, the chances of winning these grants are low. If your funder evaluation results in a positive match between you and these funders, you will need to cultivate a relationship to help further your chances.

Once you are in the “Funder Matches” tab, just click on the “Filter” option to see where you can filter in or out invite-only grant funders.

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6. Determine The Probability Of Success If  You Submit An Application

A proper grant funder evaluation should also estimate the number of applicants versus the grants that have actually been awarded. That way, you can determine how competitive the grant funding may be and whether it is worth your time to write a proposal.

It is important to understand the difference between evaluating a funder and evaluating grant competitiveness. Although you can use Instrumentl to evaluate a funder, you cannot specifically evaluate grant competitiveness directly. 

However, you can get an estimate based on:

• openness to new grantees,
• how many grants they give out per year, and 
• how large of an award they give.

We noted above that nearly half of the awards in our funder example were given to new grantees. 

You will also want to review the 990 report to see how many grants were given out. We found that this particular funder gave out 104 awards in 2021.

The median amount given by this funder to new grantees was $10,000. Therefore, approximately 50 grants from this funder may be given in this amount to new grantees such as our nonprofit.

If, after your funder evaluation is complete, you have decided to further explore this grant, you will want to ensure the grant’s demands align with your own nonprofit’s capacity actually to get the project or program done within budget. 

This not only means you will want to ensure the grant aligns with your organization's mission and needs. You will also want to have your team review the overall mission, timeline, and budget of the grant to ensure you can actually deliver on the award.

Now that you know how to complete a funder evaluation effectively, we encourage you to use Instrumentl to complete your own funder research. That way, you can figure out which grants align with your own specific nonprofit funding strategy.

Performing a funder evaluation is imperative to grant prospecting to make sure you have a chance of getting the grant, and you can successfully manage the grant.

Are you new to Instrumentl? Try our funder evaluation risk-free for 14 days (no credit card required).