Demystifying Grants: A Beginner’s Guide to Grant Proposals

Welcome to the fascinating world of grants! If you’re new to this, let’s demystify it. In today’s blog, we’re diving into the art of crafting grant proposals, starting with Grants 101 to review key grant terms and foundational concepts.

Grants 101: The Basics

What is a grant? Well, let’s start with what it is not—free money! Grants are transformational investment awards funders give to achieve specific purposes in partnership with nonprofit organizations.

Who gives out grants? Grantmakers, also known as funders, include private foundations, family foundations, corporate businesses, state and federal governments, community foundations, and other public charities.

Who can receive grants? Eligible recipients include nonprofit organizations with a 501(c)3 designation, nonprofits without 501(c)3 status (with a fiscal sponsor), small businesses, for-profit businesses, government organizations, educational institutions, and individuals. Note: Most grant opportunities are for organizations, not individuals.

Types of Grants

Various types of grants cover different needs. Some common types include:

• Program and project grants: Restricted funding for specific programs or projects.
• General operating grants: Unrestricted funding for an organization’s mission and daily activities.
• Capital grants: Funding for building construction, upgrades, and equipment purchases.
• Capacity building grants: Funding to help organizations develop competencies and grow effectively.
• Seed grants: Modest funding for startup nonprofits’ operations or new programs.

Does this leave you wondering how much grant money is available for nonprofits? Well, according to the 2023 Giving USA Report, foundations gave $105.21 billion in grants, while corporations gave $21.08 billion. And, get this, foundations must distribute 5% of their total assets as grants, as per the 5% Rule.

That’s a lot of potential funding!

Grant Readiness

Organizations must operate with a firm, well-prepared foundation to turn grant funding into a reliable source of revenue.

Grant readiness—which, at its most basic level, measures a nonprofit’s capacity to secure and manage grant funds—is what lays that foundation.

Conducting a grant readiness “check” may involve activities such as establishing strong financial management systems, identifying organizational needs, and securing and updating critical documents like financial statements, logic models, and project plans.

In addition to collecting these essential documents, here are a few readiness questions that you can ponder before you apply for your next grant:

• Has my organization set strategic priorities for our programs and fundraising efforts this year?
• Do we have proof or evidence of community need?⁠
• Do we have realistic, clearly articulated, and “fundable” solutions to meet those needs?⁠
• Is our approach relevant and impactful to the current climate?
• Have we taken the time to cultivate relationships with prospective funders?⁠
• Do we have at least 2-3 years of documented financial history?⁠
• Do we have the capacity to manage, evaluate, and report the impact of awarded funds back to our funding partners?⁠

There are so many opportunities for your organization to get grants, but you have to be prepared. ⁠Once all these pieces are put together, you will be more “ready” to submit a quality proposal and find the right funding opportunities.

Defining Your Search

Now, it’s time to find the right funding partners and grant opportunities for your nonprofit.

That means lots (and lots) of meticulous research to identify potential funding opportunities—specifically, opportunities that align with your project’s goals, your organizational values, and your operational needs. Here’s my step-by-step strategy:

Identify Your Funding Needs: Begin by clearly outlining your organization’s objectives and financial requirements to determine the grants that align with your goals. Consider how each grant can enhance your mission beyond just financial support. This broader view can help you utilize grant funding as a catalyst for meaningful change.

Thorough Research: Delve into various grant databases, government portals, and foundation directories to identify funding sources that align with your nonprofit’s key focus areas. Comprehensive research is essential for pinpointing opportunities that resonate with your organization’s fundamental needs.

Nurture Relationships: Organizations can thrive and progress toward sustainability by nurturing relationships with funders. Prioritize authenticity and mutual respect in building these connections. Establish meaningful relationships through activities like funder briefings, networking events, informational sessions, and personalized outreach efforts.

Monitor Deadlines: Develop a calendar to keep track of grant deadlines and submission criteria to ensure you seize all potential funding avenues. This tool can also help you monitor interactions with your funding partners effectively.

Following these tips can increase your chances of finding the best grants to support your organization’s impactful work.

The Anatomy of a Grant Proposal

Crafting a grant proposal can be a daunting task for many nonprofit organizations. From outlining your organizational summary to detailing a program plan and budget, each component is crucial in securing funding for your projects. Let’s explore the anatomy of a grant proposal:

Organizational Summary: The first section of your grant proposal should include a concise overview of your nonprofit organization. This should encompass your mission and vision statements and a brief history of your organization and its impact on the community.

Statement of Need: The needs statement is the motivation behind why you’re seeking support. It is where you convince a funder that the issue you want to tackle is important, needs investment, and shows that your organization has expertise. Providing compelling data and evidence to support your claims is vital to convincing funders of the relevance and urgency of your work.

Program Plan: Detailing your program plan involves outlining the specific activities and strategies you will implement to achieve your project goals. This section should be comprehensive yet concise, highlighting your project’s timeline, milestones, and anticipated outcomes.

Budget and Budget Narrative: Creating a detailed budget and budget narrative is crucial for demonstrating financial accountability and transparency. This section should outline the costs associated with your project, including personnel, supplies, and other expenses.

Evaluation Plan: This section should outline how you will measure your project’s success, including the outputs, outcomes/objectives, and goals you aim to achieve. Your outcomes should be SMART (Specific, Measurable, Achievable, Realistic, and Time-bound) to help you set clear benchmarks for success and track your progress effectively.

Remember, a well-crafted grant proposal is not just a document—it’s a powerful tool that showcases your organization’s vision and potential to create lasting change.

Submitting Your Proposal

Writing a grant is no small feat, so here’s a detailed guide to help you navigate the proposal development process.

Assemble Your Proposal Development Team: The first step in developing a grant proposal is to appoint or determine your proposal development team. This team will be responsible for various tasks, from gathering necessary information to drafting and reviewing the proposal. A dedicated team ensures that every detail is noticed and that the proposal is cohesive and comprehensive.

Gather Essential Information and Documents: Next, request all required information, documents, and attachments for the proposal’s completion. This might include organizational details, financial statements, letters of support, and any other documentation specified by the funder. Having all these materials at hand from the start will streamline the proposal writing process.

Create a Collaborative Application Document: Use collaborative tools like Google Docs to create a shared application document. This allows team members to work simultaneously on different sections, provide feedback in real time, and keep track of changes efficiently.

Develop a Proposal Work Plan: A well-structured work plan is crucial for successfully developing your proposal. Create a detailed plan that includes the following elements:

• Task: Clearly define each task required to complete the proposal.
• Responsible Party: Assign each task to a specific team member to ensure accountability.
• Measurement of Success: Determine how you will measure the completion and quality of each task.
• Timeline of Completion: Establish deadlines for each task to keep the project on track.

Draft and Review the Proposal: Begin by drafting the proposal narrative and budget. These are the heart of your proposal and must be meticulously crafted to align with the funder’s guidelines and priorities. Once the draft is complete, review and edit it thoroughly. Submit the draft to your internal team for additional feedback and incorporate their suggestions to refine the proposal further.

Final Review and Submission: After incorporating all necessary changes, conduct a final review by your organization’s leadership to ensure that the proposal meets all requirements and is compelling. Once approved, the designated staff member should submit the grant proposal package on behalf of the institution. You may also want to secure confirmation of receipt from the funder to ensure that your proposal has been received and is being considered.

Update Grant Calendar and Maintain Password Vault: Finally, update your Grants Calendar with the submission details and any follow-up dates. Also, maintain a password vault in a separate Excel sheet or your Grant Application Calendar for easy access. This will help keep your team organized and prepared for future grant opportunities.

By following these steps, your organization can develop a well-organized, persuasive grant proposal that stands out to funders.

Common Mistakes Nonprofits Make (And How To Fix Them)

Navigating the world of grant writing can be challenging, even for seasoned professionals. Here are three common mistakes to avoid to make sure your grant proposals stand out and attract the necessary support.

Mistake #1: Vision for Change is Underdeveloped, Unclear, or Nonexistent

A well-defined vision for change is one of the most crucial elements of a successful grant proposal. Funders need to understand precisely who you are, who you serve, and what specific barriers you aim to alleviate. Your messaging should be specific and clear, painting a vivid picture that resonates with the funders’ goals and interests. Without a compelling and detailed vision, your proposal may fall flat, leaving funders unsure of your objectives and impact.

Mistake #2: Using Industry-Specific Language or Jargon

While it may be tempting to demonstrate your expertise through industry-specific language, this approach can alienate funders unfamiliar with the terminology. The best grant proposals are both client-centric and funder-aware. To achieve this balance, consider the following questions:

• Client-centric: Are you using people-first language? Are you incorporating experience/perspective-first language highlighting the real-life impact on those you serve?
• Funder-aware: If the funders are generalists, is your proposal easily readable? Can you clearly articulate an impact that aligns with what they want to invest in?

By ensuring your language is accessible and aligns with the funders’ interests, you increase the likelihood of your proposal being understood and appreciated.

Mistake #3: Not Paying Attention to the Grant RFP

The Request for Proposal (RFP) is a crucial document that outlines the funding priorities, eligibility terms, and application guidelines set by the funder. Failing to review and adhere to the RFP thoroughly can result in an incomplete or non-compliant application, significantly reducing your chances of success.

The RFP includes detailed instructions and key information about the funder and the specific opportunity, including application sections, questions, and formatting requirements. To avoid this mistake, read the RFP at least twice before drafting your grant proposal.

Enhance the effectiveness of your grant proposals by developing a clear and compelling vision for change, using accessible language, and meticulously following the RFP guidelines.

Expert Strategies That Only The Pros Know

1. Understand the funder’s priorities. Before you start writing your proposal, research the funder’s mission and goals. This will help you enhance your application and increase your chances of success.
2. Read the guidelines carefully. Next, read the guidelines carefully. Make sure you understand the requirements and follow them closely. Failure to do so can potentially result in your application being rejected.
3. Demonstrate your organization’s capability and capacity to deliver the project. This is where you can share your receipts! Tell funders how your organization, in partnership with your community, is well-positioned to do this work. 

Grants are vital in funding various projects and initiatives. By grasping the basics of grants, knowing the types available, and understanding grant money availability, you can navigate the world of grants more confidently. 

Sheleia Phillips, MPH, CHES, is the driving force behind SMP Nonprofit Consulting, where she serves as Founder and CEO. For almost a decade, Sheleia has been dedicated to helping nonprofits achieve their goals by securing millions of dollars in grant funding. Sheleia is an active member of the Grant Professionals Association (GPA) board. Beyond grant writing, Sheleia’s expertise has made her a popular speaker and educator. She is a Goldman Sachs Black in Business Scholar, and firmly believes that nonprofits play an essential role in creating positive change.

Want to receive more free grant coaching and advice from Sheleia? Sign up for free training here.