The Importance and Benefits of Building Relationships with Grant Funders

Kaitlyn’s Kloset was on the verge of closing. A lack of resources and bare shelves were preventing them from providing life-changing support for families in need when the community rallied behind them.

They called on their partners, and soon, they received donations to restock the shelves. That was quickly followed by an $18,000 grant. 

In partnership with IFC National Marketing, Kaitlyn’s Kloset was able to not only meet their current needs, but also expand their programming—all because they asked for help and were able to leverage their nonprofit funder relationships to transform their mission and expand their outreach.

This is just a small example of what can happen when you have strong relationships with your funders and supporters. In the following article, we will explain how establishing relationships with grant funders can lead to sustainable growth, enhanced credibility, and greater mission impact and what you can do to start cultivating them today. 

Let’s dig in!

Strong nonprofit funder relationships can lead to consistent, long-term financial support, which promotes the overall health of your organization. 

When you have an established partnership, you can anticipate and plan for the funding each year. 

For example, Macy’s has been a corporate partner at Girls Inc. for more than 20 years and currently donates more than $1 million annually. After such a longstanding partnership, Girls Inc. can plan for how best to allocate those funds—but you don’t get to this level of partnership without cultivating a relationship first. 

Sustainable funding promotes stability in your organization. Of course, nothing is guaranteed, but if these funding opportunities are no longer available, you’ll often receive advance notice from the partner to help you prepare.

Positive nonprofit funder relationships can open doors to additional grants, increasing your funding opportunities in a few different ways. 

When you have a strong relationship with a funder, they may prioritize your nonprofit when it comes to new or expanded funding opportunities. They already trust you and see the great work you’re doing. When there are new funds available, your organization will be top of mind. 

In other cases, they may put your name forward when they hear about funding opportunities available from other funders, or they might even serve as a fantastic reference when you’re applying for new grants. They may simply share about your organization through word of mouth, and new funders can discover your organization organically.

You could also snag applications to invite-only grants based on your relationships and networks, which are exclusive opportunities that are only open to those invited to apply.

Having strong relationships can yield dividends and open the door for new funding possibilities, so make sure to invest the time in fostering them.

You can tell a lot about an organization based on who they associate themselves with, and that includes nonprofits. 

Your organization could benefit from enhanced credibility based on the strength of its funder relationships. These partnerships can provide a level of legitimacy within the community because you’re partnering with people they trust. 

For example, the Coca-Cola Foundation invests in nonprofits throughout the world, including Synergies Work, which is a 501(c)3 that helps empower entrepreneurs with disabilities in the United States. Now that this Atlanta-based start-up has the backing of a powerhouse brand, other organizations may be willing to donate and work with them, helping expand their reach. 

Ultimately, these mutually beneficial relationships can boost your reputation and strengthen your credibility in the community.

Many funders can provide more than just money. They can also lend their deep functional expertise, offering strategic input that can help take your nonprofit to the next level. 

Additionally, they may have resources and connections that you wouldn’t otherwise have access to. Some examples of what this collaborative partnership could look like is:

• Guidance after your first reporting cycle of efficiencies you could capture.
• Connecting you with community partners so you can share resources.
• Giving you access to proprietary resources (like software) that can help streamline your efforts.

Whatever they look like, these collaborative partnerships can help you increase your impact and further your mission. 

For example, the IBM Foundation partners with nonprofits to offer free training for communities in need, which is a great way to demonstrate their impact in real-time. 

Nonprofit funder relationships can also lead to involvement in your organization in new ways. Perhaps in the future, they could serve on the board of directors, volunteer, or become a personal donor. If they believe in what you’re doing, they’ll want to stay involved regardless of where they work.

People like to talk, especially when they’re passionate about something. When you have strong nonprofit funder relationships, your organization can be a topic of conversation, which can help give you access to an entirely new group of people.

These could be potential supporters, including:

• Individual donors
• Corporate sponsors
• Community partners
• Volunteers

The possibilities are limitless when it comes to expanding your network, and leveraging your nonprofit funder relationships is a great way to get your mission and message out there.

When you have limited resources, you need to get creative with development opportunities, including capacity building. 

Strong nonprofit funder relationships can lead to opportunities for organizational growth, training, and resource access.

For example: 

• If you’re looking to upskill your team, explore if there’s a qualified individual at the funder’s organization who can host a training.
• If you’re looking to restructure your workflow, consult a chief of staff or human resources professional for guidance.
• If you’re looking for specific resources that they have available, check if there’s someone who can help you.

Sometimes funders will offer resources in addition to grant funding. For example, Amazon’s Go Further, Faster Award includes up to $150,000 in unrestricted support as well as access to AWS training and support, AWS marketing promotion, and more!  

It’s in the funder’s best interest to see you succeed, and they will help you to the best of their ability to do so.

Open and honest communication is critical when it comes to building relationships with grant funders. Not only do you want to share your progress in formal reporting, you also want to be open to feedback and leverage their guidance. 

Nonprofits can benefit greatly from funder feedback in multiple ways: 

• You’ll learn and grow based on their deep functional expertise, providing new insights and opportunities for innovation.
• You’ll foster collaboration in new ways, showing you’re open to new opinions to make the biggest impact.
• You’ll build trust and respect when you put their suggestions into practice because it shows you value their input. 

You’ll never know what you can learn if you ask for feedback, so don’t skip this step when you’re looking to build relationships with grant funders.

In some ways, your organization is only as strong as its supporters, and when you have people who truly believe in your organization, they are often willing to speak out on your behalf. When you have strong funder relationships, they could become advocates for your cause. 

That includes helping you advance your nonprofit’s policy and advocacy objectives. Your supporters can potentially lobby to help change policies on a local and national level. With the support of funders and donors, your nonprofit can make a real difference, but only if there’s trust and belief in your organization.

Your funders become your best advocates when they see you’re able to do what you say you will.

Not building relationships with grant funders can have some serious and long-lasting consequences:  

• Limited funding: You will likely only get the grants you apply for and not be considered for additional opportunities or future funding.
• Financial instability: It’s not sustainable funding because you treated your grant like a one-off funding opportunity. You can’t plan for future support. 
• Reduced credibility: Your nonprofit credibility may take a hit because you’re unable to capture year-over-year funding from the same organizations.
• Lack of support: The funder may not be willing to lend their support outside of what was committed to in the grant terms.
• Difficulty in capacity building: You can’t take advantage of the organization’s expertise or resources to upskill and enhance your nonprofit.

Ultimately, you can miss a lot of great opportunities when you don’t prioritize relationship-building with your funders. It’s up to you to create and maintain those connections.

At the end of the day, the health of your organization depends on the strength of your nonprofit funder relationships. They provide the necessary resources and financial support that will fuel your operations, so it’s critical that you learn how to effectively build these relationships.

Be proactive with your current funders and make connections with potential funders that you can steward over the years. Instrumentl can help you locate new grant opportunities and good-fit funders to kickstart the process, so sign up today for your free, 14-day trial.