The 4 Types of Grants for Nonprofits

You know that securing grants will be a great way to fund your nonprofit’s programs and diversify your revenue streams. But if you’ve never dipped your toe in the grants pool before, figuring out where to start can be a challenge—with even something as basic as learning the four types of grants for nonprofits threatening to leave you high and dry. 

That’s why we’re here to help. In this guide, we’ll walk you through those four main types of grants available to nonprofits and break down everything you need to know!

Understanding Grants

Grants are non-repayable funds awarded for a specific purpose. They are most often disbursed by governments, foundations, corporations, or individuals, and they are one of the primary revenue sources for nonprofits.

Grants come in many forms, from large federal funds aimed at helping national organizations push for systemic change to smaller local grants focused on community projects. They can cover a wide range of needs, too, from the nuts and bolts of daily operations to the bold initiatives that could redefine your organization’s future.

The primary benefits of grants can be slotted into a few main categories:

1. Growth Opportunities: With the right grant, your nonprofit can pilot new programs, expand existing ones, or enter new areas of service. This ability to grow and adapt is essential in a world where the needs of the communities you serve are constantly evolving.
2. Credibility and Trust: Securing a grant, particularly from a well-known foundation or government agency, can significantly enhance your nonprofit’s credibility. It signals to other potential funders, donors, and stakeholders that your organization is trustworthy, capable, and aligned with larger goals. 
3. Diversification of Income: Grants allow nonprofits to diversify their income streams, reducing dependence on any single source of revenue. This diversification safeguards against the uncertainties that come with relying too heavily on donations, events, or a single large donor. 

Now, despite all those very real benefits, we don’t want to paint this picture of grants as just free money falling from the sky. They often come with specific conditions, reporting requirements, and a clear expectation of impact. This means that, while grants can be a lifeline, they also require accountability, transparency, and strategic planning. 

Securing a grant is only step one. Step two through step infinite is delivering on the promises you made in your proposal. In essence, when you receive a grant, you’re entering into a partnership with the grantor, one that’s built on mutual trust and a shared vision for change.

The 4 Types of Grants

Before you start researching and applying for grants, understanding the landscape of grant providers is crucial. Let’s break down the types of grants into 4 main categories: Government, Foundations, Corporations, and Specialized. Each offers distinct opportunities that could be the key to fueling your nonprofit’s mission.

1. Government Grants

Government grants come from, you guessed it, government entities at the national, state, and local levels. In keeping with the size of those entities, federal grants are typically the biggest (and typically the hardest to come by), while local grants are the smallest, with state grants falling somewhere in the middle. 

Here’s some more information on each type: 

Federal Grants

These are the big leagues. Federal grants are typically designed to support large-scale projects with far-reaching impacts, often aimed at addressing national issues like public health, education, or infrastructure.

The application process is not for the faint of heart—it involves extensive research, meticulous documentation, and often, a deep understanding of the political and social landscape. But for nonprofits with the capacity to manage such complexity, federal grants can be a game-changer.

To find federal grants that fit your mission, start by exploring Grants.gov, the primary portal for finding and applying for federal grants. Remember, the competition is intense—your application needs to stand out in terms of both innovation and feasibility.

State Grants

State grants, while less massive than federal ones, are more accessible and often more closely aligned with regional needs. They offer nonprofits the opportunity to make a tangible impact on their communities. 

For example, State Arts Councils provide funding to support local artists and cultural projects, helping to preserve and promote regional heritage. 

Because these grants are managed at the state level, they tend to be more flexible and may be easier to obtain than federal grants, especially for organizations with strong local ties.

To find these opportunities, explore your state’s official government website or connect with relevant state agencies. Building relationships with state officials and attending local workshops can provide invaluable insider knowledge. 

Local Grants

Local government grants are often the most accessible but also the most specific. These grants are typically smaller in scale but are tailored to the unique needs of local communities. They often focus on community development, public safety, and local arts and culture.

Securing a local grant can be a great way to build credibility and visibility within your community, laying the groundwork for future funding opportunities.

When applying for local grants, it’s crucial to demonstrate how your project addresses the specific needs and priorities of your community. Engage with local government offices early in the process to understand the funding landscape and build relationships that could support your efforts.

2. Foundation Grants

Foundations sit at the heart of the philanthropic sector, offering substantial grants to support causes that align with their missions. They can be private or community-based and are often funded by individuals, families, or corporations.

Private Foundation Grants

Foundations like the Gates Foundation, which focuses on global health, education, and poverty alleviation, or the Ford Foundation, which supports social justice initiatives, are examples of private foundations that offer substantial grants to nonprofits worldwide.

Private foundation grants often come with fewer bureaucratic hurdles compared to government grants, allowing for more innovative and creative projects. They are a major source of funding for nonprofits with strong missions that resonate with the foundation’s values.

Securing a foundation grant often starts with building a relationship. Research the foundation’s mission and priorities thoroughly. Attend events, engage with their staff, and reach out personally to demonstrate how your nonprofit’s goals align with the foundation’s mission. 

Community Foundation Grants

Community foundations focus on funding initiatives that benefit their local areas. While these grants may be smaller than those from private foundations, they are often more accessible, especially for projects with a clear community impact.

Community foundations are deeply invested in the well-being of their regions, making them particularly valuable for nonprofits that operate on a local level and need funding to address specific community challenges.

When applying for a community foundation grant, leverage your local knowledge and community ties to strengthen your proposals. Highlight how your project will directly benefit the local community and consider partnering with other local organizations to make a bigger impact.

3. Corporate Grants

In the corporate world, giving back isn’t just a nice gesture—it’s a strategic business move. Many companies use Corporate Social Responsibility (CSR) programs to fund social initiatives that align with their business values. 

Corporate Social Responsibility programs are designed to improve a company’s public image while contributing to social causes. For instance, Google Ad Grants provides in-kind advertising to help nonprofits promote their missions online, while Microsoft Tech for Social Impact offers software and technology resources to help nonprofits increase their operational efficiency.

One of the best things about these grants is how they open the door for a possible long-term partnership. A successful collaboration can lead to recurring support, volunteer opportunities, and even co-branded initiatives that elevate both the nonprofit and the corporation’s public profile.

If you’re looking to secure a corporate grant, start by identifying companies (Whether they’re local or national) whose CSR goals align with your nonprofit’s mission. Research the company’s values and past CSR initiatives, then tailor your proposal to highlight mutual benefits. 

We mentioned Google Ad Grants in this section, and they are a really fantastic way to boost your nonprofit’s digital presence for the low, low price of free. To learn more about Google Ad Grants, check out this article!

4. Specialized Grants

This last category is a grab bag of several specialized types of grants that serve specific purposes. Here’s a quick breakdown of the different types: 

• Operating Fund Grants: These grants provide unrestricted funds to cover your nonprofit’s general operating expenses. They allow your organization to keep the lights on, pay staff, and cover other essential costs without the restrictions that often come with project-specific funding. When applying for operating funds, make a strong case for why these funds are essential for your nonprofit’s sustainability. 
• Project Grants: Project grants are awarded to fund specific initiatives or programs with defined goals and outcomes. They provide the resources needed to achieve clear, measurable outcomes that can be showcased to other potential funders. Your proposal should include a detailed project plan, clear objectives, and a method for evaluating success.
• Capacity Building Grants: These grants are designed to help nonprofits improve their organizational effectiveness and sustainability. They fund activities like staff training, strategic planning, and technology upgrades. When applying for a capacity-building grant, demonstrate how this grant will make your organization more effective and better able to achieve its long-term goals. 
• Research Grants: Targeted at nonprofits engaged in academic or scientific research, these grants fund studies that contribute new knowledge to a field. They allow organizations to explore uncharted territories, solve complex problems, and contribute to the broader understanding of key issues. A successful research grant proposal includes a strong research question, a detailed methodology, and an explanation of the expected impact.
• Capital Grants: These grants provide funding for large-scale physical projects, such as building renovations or equipment purchases. They are essential for nonprofits planning significant expansions or upgrades that require substantial investment. Before applying for a capital grant, ensure you have detailed plans in place, including architectural designs, cost estimates, and a long-term maintenance plan.
• Endowment Grants: These grants contribute to a nonprofit’s endowment, providing a reliable funding stream to support operations, programs, or specific initiatives.
  To secure an endowment grant, highlight your organization’s history, stability, and potential for sustained impact. 
• Technical Assistance Grants: These grants fund the hiring of experts or consultants to address specific organizational needs. When applying for a technical assistance grant, make sure your proposal clearly articulates the need for external expertise and how it will benefit your organization. 

So, which grants are going to be right for your nonprofit? Well, unfortunately, we can’t tell you that. It’s going to depend on your nonprofit’s needs, capabilities, mission, and a dozen other factors. 

But one thing we can tell you is that writing a knockout grant proposal will really help you clinch the deal. 

How to Write a Winning Grant Proposal

Once you’ve found a grant (or two, or ten) that fits your nonprofit, it’s time to start writing a proposal. Easy right?

Not really! 

A well-crafted proposal is your opportunity to make a compelling case for why your nonprofit deserves funding, but a grant proposal isn’t just something you can whip up in an afternoon. Grant writing truly is an art, a craft, and a science—with a little bit of sorcery thrown in for good measure. 

You’re going to need some help, trust. So, for a deeper dive into the basics of writing a truly awesome proposal, we highly recommend you check out this article from grant writing extraordinaire Sheleia Phillips, MPH, CHES: