The Best Types of Grants For Nonprofits and How to Win Them: 7 Grant Professionals Weigh In

While there are thousands of grants out there, they all really fall into four different categories. 

Competitive Grants Showcase Innovation and Impact

Competitive grants are the most common type of grant. Nonprofits apply for funding, and the funders review all applications before selecting who will receive the grants based on various criteria, including the project, impact, mission fit, and more. 

Here’s what Jacob B Chase, CEO at Chase Consulting Solutions, had to say about when you should pursue competitive grants: 

“Competitive grants should be prioritized for nonprofits seeking funding for specific projects or initiatives that align with a grantmaker's priorities. These grants often involve a competitive application process, and successful proposals demonstrate a clear and innovative approach to addressing an issue.” — Jacob B Chase, CEO at Chase Consulting Solutions

Innovative approaches are just the start of what will differentiate you from the pack. According to Arnold King, Senior Grant Writer at Black Women in Blockchain, you also need to focus on personalization and tailoring your approach to meet the funder’s needs: 

“Nonprofits can connect their proposal [to the funder’s mission] and compete better.” — Arnold King, Senior Grant Writer at bwinb.org

Because they’re so competitive, successfully securing these types of grants can provide significant funding and prestige, helping your organization stand out.

Pass-Through Grants Build Relationships and Collaboration

Another common type of grant is a pass-through grant, and Chase offers more insight into these kinds of funding opportunities: 

“Pass-through grants involve receiving funds from one entity and distributing them to subrecipients for specific activities. Pass-through grants should be prioritized for nonprofits collaborating with other organizations or acting as intermediaries for project implementation.” — Jacob B Chase, CEO at Chase Consulting Solutions

These types of grants are fairly common when it comes to government entities. The government may provide an organization with a certain amount of funds, and it’s up to that organization to distribute them accordingly. 

And while pass-through grants may seem complex, they don’t have to be. Matt Hugg, President and Founder of Nonprofit.Courses, shares more about how you can approach them: 

“If the pass-through entity is simply a distribution service, then build a relationship with the funding originator to get the money sent your way. If the pass-through entity has influence, chances are it's closer to your situation, and you'll have a better chance to make your case.” — Matt Hugg, President and Founder at Nonprofit.Courses

Pass-through grants can be particularly beneficial for nonprofits engaged in partnerships or collaborative projects. 

Formula Grants Leverage Predetermined Criteria

Formula grants are non-competitive grants. As long as you apply and you meet the criteria, you will receive the funding. Sample criteria could include:

• Population
• Demographics
• Census Data
• Community Needs
• Poverty Rates
• Crime Rates

Because they are often centered around advancing the public interest, formula grants are typically administered by the government, as Rachel Gusin, Project Coordinator for the Legal Aid Society of San Diego, explains:

“Formula grants, on the other hand, are non-competitive grants distributed based on predetermined criteria, such as population size. They’re often allocated for specific purposes like education or healthcare. Non-profits that offer services aligned with these predetermined criteria and who serve large or specific populations may find these grants suitable.” —Rachel Grusin, Project Coordinator for the Legal Aid Society of San Diego. 

If your nonprofit meets the criteria, formula grants can be a reliable source of funding that supports specific activities or target populations. Hugg puts it best: 

“Formula Grants. If you meet the criteria, then go for it.” — Matt Hugg, President and Founder at Nonprofit.Courses

You really have nothing to lose when pursuing these grants. 

Continuation Grants Sustain Your Success

Once you land the initial grant, many funders will renew funding to see the project through. They want to be involved with the good work when it’s being realized, not just when it’s being implemented.

That’s why Hugg suggests prioritizing continuation grants as they provide ongoing support for successful projects. These grants are ideal for nonprofits that have already proven their program’s effectiveness and need sustained funding to maintain or expand their initiatives:

“Continuation Grants. You did the hard work with the initial funding. You kept the right records (right?). Don't walk away from keeping it unless there is an important reason why it no longer works for you.” — Matt Hugg, President and Founder at Nonprofit.Courses

As long as you continue to meet the grant’s criteria, you should qualify for renewal. Stay in close contact with funders and nurture strong relationships to maximize your odds of success.

Now that you know the common types of grants, here are some expert tips to help you get started. 

Assess Your Capacity and Needs

Before you can really dig into finding grants, you need a clear plan of what you would like to accomplish and how it aligns with your strategic priorities.

Rachel Grusin, Project Coordinator for the Legal Aid Society of San Diego, highlights the importance of assessing your organization’s capacity and needs when deciding which grants to prioritize: 

“You may wonder which grants you should prioritize if you’re running a non-profit organization. It all depends on your organization’s size, capacity, experience, and project needs.” — Rachel Grusin, Project Coordinator for the Legal Aid Society of San Diego

Understanding your team’s capacity and organization’s specific needs will help you target the most appropriate funding opportunities. You need to make sure you’re not biting off more than you can chew to avoid burnout. 

Align Grants With Your Mission

You should only ever pursue grants that align with your mission. Avoid chasing what’s trendy or losing sight of your goals.

Elizabeth Morgan Burrows, Principal at Burrows Consulting, emphasizes this importance:

“Non-profits should prioritize any grants that align with their organization's mission, vision, and strategic plan.” — Elizabeth Morgan Burrows, JD, Principal at Burrows Consulting

This alignment ensures that the funding will support your organization’s core activities and strategic objectives, increasing the likelihood of sustainable growth and impactful outcomes.

Start Locally and Expand

You don’t always have to start with massive national funders either. Sometimes, it’s easier to start closer to home, which is just what Sarah Lange, CEO and Founder of Sarahblange.com, advises nonprofits to do:

“Start locally! Banks often have fairly easy applications, and area foundations are there to support local initiatives! Once you've conquered the local funding scene, you can reach out to other funders in your area/region.” — Sarah Lange, CEO/Founder at sarahblange.com

Successfully securing local grants can build a strong foundation and reputation, making it easier to approach larger, regional, or national funders. As an added bonus, local funders often have a vested interest in supporting local initiatives to improve their own reputation in the community.  

Diversify Your Funding

Once you have a few smaller grants under your belt and you’re more familiar with how the process works, it’s time to level up your grant-seeking game.

Daphne Keys, Freelance Grants Manager, underscores the significance of pursuing a variety of grants, especially if you have the capacity to manage multiple funding streams. A diversified grant strategy can mitigate risks and ensure a steady flow of resources:

“If your team is small, seek pass-throughs as they behave much like individual significant donors. Then seek continuation - you don't want to lose funders. Once those are established well, seek competitive and formula grants. If you have a large team, break these up and spread them out amongst your team. All are important.” — Daphne Keys, Freelance Grants Manager

While it’s important to keep your team’s capacity in mind, you don’t want to put all your eggs in one basket and only pursue one type of grant. The more diversified your grant strategy, the more successful you will be.

Prioritizing the right types of grants is essential for effective nonprofit fundraising, and our experts shared insights on what they are, when you should pursue them, and tips on how to win them. 

These seasoned professionals know what it takes to win funding, and if you’d like to contribute to future Expert Council articles, create your Expert Council profile today! 

Remember, a diversified approach tailored to your organization’s unique needs and strengths will maximize your chances of success of landing that next grant, and if you’re ready to explore what Instrumentl can offer you, sign up for a free, 14-day trial today!