For nonprofit organizations, grants can be an important source of revenue. However, the process of finding and applying for grants can be daunting. In this post, we’ll provide a comprehensive guide to the different types of nonprofit grants. We’ll explain what each type of grant is and how to apply for it. So, whether you’re a newcomer to the world of grants or you’re looking to apply for a specific type of grant, you’ll find what you need here.
General Operating Grants
There are a variety of different grant programs available to nonprofit organizations, and each one offers different benefits and opportunities. One of the most common types of grants is the general operating grant, which provides funded organizations with a sum of money that can be used for any purpose deemed necessary. This type of grant can be a great way to help your nonprofit get on its feet and maintain day-to-day operations. The funded organization can utilize the funds for operating expenses, programs, projects, planning, or to meet any other need they may have. This type of grant application should include an overview of the entire organization, impact stories of how the agency has supported clients, and the current unmet needs.
Capital Grants are a form of financial assistance used to help organizations build and maintain the facilities necessary to provide programs and services, which may include renovating property, expanding services, or purchasing equipment. The purpose of a Capital Grant is to help organizations maintain their long-term stability and improve their effectiveness. For example, these grants may cover all or part of the expenses for constructing a new building or purchase equipment to outfit a computer lab for an after school program.
There are a few things to keep in mind when applying for a Capital Grant:
- Capital Grants are typically awarded to larger organizations with a proven track record of success.
- The application process is typically more rigorous than for other types of grants.
- The grant amount is usually higher than for other types of grants.
- The grant period is usually longer, sometimes up to five years.
Some things to include in a capital grant are the need (based on real numbers), previous success, goals to be accomplished with the new facility, relationship to anyone on the board, and support of other funders.
Training and Technical Assistance Grants (TTA)
If you’re looking for funding to help with your organization’s training and technical assistance needs, a Training and Technical Assistance Grant (TTA) may be the perfect option for you.
These grants provide grant money to support the administrative functions of a nonprofit organization. These grants may help with expenses associated with upgrading equipment, operations, travel, salaries for staff who are training, or the cost of training itself.
In this type of application, the organization should include a detailed plan on training including timelines, goals, collection of data ect.; sustainability of program and training; expertise of organization to implement training; and partnerships to accomplish goals.
Project/Program Support Grants
Another common type of nonprofit grants is the project/program support grant. As the name suggests, this type of grant provides funding for specific projects or programs that the nonprofit is undertaking. This could include, for example, a new project that the nonprofit is launching, or additional funds to support an existing program. This funding is earmarked to cover expenses associated with specific activities carried out by a charitable entity.
So what is the difference between a project and program? A project is an initiative by an organization that has a limited time frame, while a program is ongoing. It will be important to distinguish this before writing the grant proposal.
Project/program support grants are a great way for nonprofits to get funding for new initiatives, and they can be a valuable tool for expanding the work that the organization does. It’s important to remember, though, that these grants are usually very competitive, so make sure you put together a well-thought-out proposal detailing why your project or program is worth funding. In this application, it is important to highlight the program’s past success and include the goals for future, measurable outcomes, and how the program connects to the mission of the founder.
Challenge and matching grants are usually also grants project/program, but they can also be general or capital grants as well. What makes these grants different is the way they are funded versus what they fund. Additionally, while challenge and matching grants are similar, there are key differences between the two:
A challenge grant is paid if and when an organization is able to raise sufficient additional funds from other sources, which may be used to stimulate giving from other donors.This can be a great way to get your community involved in your work and help you raise money to continue your good work.
A matching fund is a gift made to your organization by a matching donor (e.g., a foundation) under the provision that another donor (e.g., an individual) first makes a gift toward that organization. This can be difficult for organizations that are short on cash, but it’s still worth applying for as the match requirement is often lower than the total grant amount. For example, a grant with a 1:2 (one to two) match would mean the organization would need to provide the amount you request. Similarly, a 2:1 (two to one) match would mean the organization would need to provide twice the amount of the amount requested.
Matching donors usually like to see that the organization has a diverse stream of revenue, while a challenge grant’s purpose is to motivate the organization to raise more funding through other sources. It is important to write these grants with the entire amount of funding (not just their portion of the match) in mind.
Emergency loans are just what they sound like: short-term loans intended to help nonprofit organizations address unexpected or urgent financial crises. Loan funding is intended primarily to assist the nonprofit with timing issues surrounding pledge receivables, payment of an approved government or foundation contract, or some other verifiable form of repayment. In these types of proposals, the organization should highlight previous success and impact on the community and include financial viability, why the loan is needed, how the loan will be paid back, and risk assessment information.
The key thing to remember about emergency loans is that they should only be used as a last resort. They typically come with high interest rates and shorter repayment terms, so it’s important to carefully consider all of your other options before taking out a loan.
There are many different types of nonprofit grants available, and it can be overwhelming to try to figure out which one is right for your organization. If your nonprofit organization would like help finding funding opportunities or writing grant proposals, Arula is a small consulting firm in Fort Collins, Colorado that helps nonprofit organizations raise money to help them continue their good work. We specialize in grant writing and can help your nonprofit apply for the right type of grant to meet its needs. Contact us today to learn more!