How to Find Grants for Your Nonprofit Organization
This online guide is intended for nonprofit organizations in the United States. For the purposes of this guide, a nonprofit organization is a
specific type of corporation that is:
- Registered with the state government to do business within its state
- Recognized by the Internal Revenue Service as exempt from federal income tax
- Does charitable work in the community.
Many people think that finding money is the first step in starting a nonprofit. But there’s a lot more to raising money than just having a good idea. Since nonprofits and foundations exist in order to benefit the public, there must be a need for your organization and its work in the community. After you’ve established that there is a need for your project, you also have to convince donors and funders that your organization has the ability to carry out what it says it wants to do! Here are some of the most important things to consider:
- Clear mission and vision, goals, and objectives
- Committed board members
- Capable management, staff, and volunteers
- Legal standing to do business in your community
- Appropriate tax status
- Accounting systems
- Programs that are vital to the well-being of the community
- Fundraising plan, which seeks support from many different sources
- Facilities, equipment, and maintenance.
What Is 501(c)(3) Status, and Why Is It So Important?
When you are researching grant opportunities, you’ll see that many foundations are also nonprofits that give to:
- “501(c)(3)” organizations
- Fiscally-sponsored groups or individuals
- Nonprofits than to individuals.
501(c)(3)s are defined by the Internal Revenue Code:
- See section 170 (c)(2)(B) of the Internal Revenue Code (also known as Title 26 of the United States Code).
- Section 170 (c)(2)(B) will in turn refer you to section 501(c)(3) of the Internal Revenue Code, which lists types of charitable organizations to which foundations can safely make contributions to.
- In order to be officially recognized as a tax-exempt, public charity, nonprofit organizations must take numerous steps, including filing paperwork with the IRS. Learn how to apply for tax-exempt status at StayExempt.
By law, a foundation can only give funds for charitable purposes – to support:
- Religious, charitable, scientific, literary, education, and amateur sports organizations
- Government entities and agencies
- Operating foundations that provide charitable services to the community.
To ensure that a foundation is giving donations to qualified public charities, it usually requests a copy of each public charity’s 501(c)(3), IRS determination letter for the foundation’s files before it will give a grant to that organization. This is because foundations must report their gifts and activities to the IRS each year.
If you think your organization might be missing one of the pieces to this puzzle
, take a look at The Enoch Pratt Free Library/SLRC's Grants Collection's How to Start a Nonprofit in Maryland research guide.
Using the words of the Association of Fundraising Professionals, a grant is “a financial donation given to support a person, organization, project, or program.” It is typically awarded to a nonprofit organization from a foundation, corporation, or governmental agency.
Grants are typically awarded to a nonprofit organization for a distinct program or purpose. A grantmaker generally focuses its giving on:
- A specific population (such as children or organizations in Maryland)
- Certain types of nonprofits (such as churches or environmental groups)
- Particular types of support (such as program development or funding for equipment).
Many people think that grants are an easy way of getting funded, because grant money is free. In reality, even though you do not have to pay a grant back, you do have to invest a considerable amount of thought, effort, time, and money. In addition to “doing what you do really well,” you need:
- An in-depth understanding of the needs of your community in order to develop an effective solution (program) to meet the problem
- Knowledge of the available resources of your organization, so that you can ask for the right type and amount of assistance
- The ability to match your program and needs to another organization’s priorities and criteria for giving
- Language skills for writing an effective proposal
- Enough cash flow to run your organization and its programs until the grant funding comes in
- After winning a grant, you will have to monitor income and expenses, measure the successes and failures of your program, and report back to the funder.
So, before you look for grant funding, you need to get your house in order. Make sure that you have the capability (knowledge and expertise) to carry out a program, before you ask for support for it.
How To Learn About the Grantseeking Process
Going to workshops and professional meetings is a useful way of learning about grantseeking and fundraising. The Pratt Library's Grants Collection offers free workshops in the Fall and Spring. If you contact us, be sure to ask us to put you on our mailing list. Other organizations in the Baltimore-Washington region offer free or low-cost training for nonprofits, including:
How To Find Grant Opportunities for Your Nonprofit
Once you’ve established your nonprofit organization, you’ve figured out your project’s goals and funding needs, and you’ve read up on the world of philanthropy, you may feel ready to look for grant opportunities.
There are two major grant sectors to research:
A foundation is a type of nonprofit organization that exists in order to give money away for charitable purposes. There are several types of foundations and related types of funders, including ones that are run by family members, members of the community, and corporations.
By law, tax-exempt foundations must file a yearly information return with the IRS (IRS Form 990 or 990-PF)
If you know the name of a particular foundation (i.e. independent, corporate, community, operating, or grantmaking public charities), you can use:
"Corporate giving programs” rather than “corporate foundations” are not:
- Separate organizations from the business that funds it –
instead, it may be run by the company’s advertising, marketing, or
public affairs department
- Required to make contributions to nonprofits, or report their activities to the IRS through a 990 or 990-PF form.
If you want to find the foundation and corporate funders:
- Baltimore's Enoch Pratt Free Library’s Central Library/State Library Resource Center (400 Cathedral Street, Baltimore) gives free access to the Foundation Center’s Foundation Directory Online Professional.
- Foundation Directory Online Professional
- Covers approximately 120,000 foundations and corporate giving programs in the United States.
- Allows you to search
- grantmaker’s name and location
- geographic focus (where the foundation gives its money)
- type of support (the kind of help the grantmaker provides,
such as seed money or funding for buildings and equipment)
than 470 locations throughout the United States offer free public access, assistance, and
training about the Foundation Directory Online Professional and related Foundation
Center services. Use the Foundation Center’s Funding Information
Network partners directory search to find a location near you.
- Grantmakers’ association, an association for nonprofit organizations, or a governmental agency may also provide grantmaker information.
- To find out the latest funding opportunities, click on:
When you are looking at the funder's record in these sources, compare your organization and its programs to the funder’s priorities. While you are researching, you might want to keep track of your prospects with worksheets.
Pay special attention to the funder's:
- Purpose and activities
- Limitations (which types of nonprofits or projects the foundation DOES NOT fund)
- Application information (including deadlines and preferred method of contacting the funder).
Once you have identified some funders that might help, it’s important to see if they really give to organizations or programs like yours. Do they have a history of giving to your cause and to organizations like yours? To find out more details:
- Visit the funder's Web site. If the foundation has a site, it will often include application forms, news, reports, and other information
- Read the funder’s annual reports, newsletters, and publications
- Contact the funder.
Since funders’ interests and priorities can change, it’s a good idea to keep tabs on grantmakers in your regions. You may also want to follow the news, to find out about new foundations and corporate funding programs.
U.S. Government Funding
If you are looking for government funding for your organization or project, you need to research opportunities on three governmental levels:
- Federal (U.S.)
- State (e.g., Maryland)
- Local (e.g., Baltimore).
Some federal agencies award funding directly to nonprofits – these are sometimes called “discretionary grants” – most federal money is distributed to state, county, or city governments, who then decide which local charities get funding.
Some parts of the process are similar, there are some key differences between foundations and government funders:
- Tracking a new federal funding opportunity can be a long journey. Typically, once the legislation has been signed into law by the President, the agency implementing the program publicizes a “notice of funding availability” (NOFA), which offers nonprofits a chance to compete for funding to provide the services Congress has mandated. To get to the point – you will probably hear about a new government grant program long before you can actually apply for it!
- How well your program addresses the legislative intent of the law is very important and is often one of the criteria that your proposal will be evaluated upon. It also goes without saying that your program will need to comply with all federal laws and regulations, too. You can research relevant U.S. bills, laws, and regulations on the Internet, or at a federal depository library near you
- If you are a faith-based organization, the U.S. government can offer funding, but there are numerous guidelines they must follow because of the separation of church and state
- Some federal programs require cost sharing or matching. This means that your organization may be required to put up cash, in-kind donations, or staff time needed for the project without being reimbursed with federal funds
- The U.S. government requires financial reports and recordkeeping on a regular basis and has the right to audit federally-funded operations at any time. Programs that receive more than $300,000 in federal funding must be audited.
Another key difference between foundation and government grantseeking: it’s usually much easier to find information about federal grants for free on the Internet. Here are three websites that notify the public about funding opportunities:
- Catalog of Federal Domestic Assistance. This is a listing of all the U.S. Government’s grants, loans, and benefits programs, including opportunities for nonprofits, businesses, state and local governments, individuals, and families
- Grants.gov is a one-stop shopping center for grantees. Two helpful features are its list of grants that have been posted in the last 7 days, and the ability to sign up to receive funding notices through e-mail
- USA.gov for Nonprofits, by the U.S. General Services Administration. This provides links to relevant information for nonprofits from the IRS, U.S. Postal Service, and many other federal departments and agencies.
If your nonprofit operates in Maryland, you may be able to get a grant from the Maryland state government using these resources:
When you find funders that match your organization's mission, programming areas, and funding needs, learn more about how to approach them. Methods of approaching funders are known as "initial contact."
Examples of initial contact include by:
- Telephone (the most common and suggested approach)
- Email or mail (if a phone number is not available)
- Letter of intent (LOI), which is most frequently done after the phone call.
Sometimes after the initial contact, a funder may request the full proposal. Our best suggestion on writing the grant: give the funders what they ask for from their guidelines.
Learn more about the writing letters of inquiry (LOIs), filling out applications, and following the proposal writing process in low-cost training and free online tutorials. Other online resources are:
If you want to see examples of proposals for specific projects or types of nonprofits, check out The Foundation Center’s GrantSpace website. One way to find examples is to select a subject, then scroll down to the bottom of the webpage for the "Sample Documents" section.
Remember that grants are only part of your fundraising strategy. There are many other tactics you can use to acquire funding:
- Asking for donations from the general public through direct mail, telemarketing, and the Internet
- Membership programs
- Major gift campaigns
- Marketing partnerships with corporations
- Partnering or getting sponsorship from a larger nonprofit organization
- Planned giving/bequests
- Special events
- Selling products and services.
Pratt’s Grants Collection has a growing assortment of information resources that can help. Feel free to contact us for printed and online resources!
Questions? Feel free to contact us by phone (410-396-5320), or email at email@example.com.
Social Science and History Department
Enoch Pratt Free Library
Central Library/State Library Resource Center
400 Cathedral St.
Baltimore, MD 21201