You just know it: there is grant funding out there for your nonprofit. The question is how to find it? The answer is by taking a strategic approach to identifying grant opportunities. We offer you these tips to efficiently and effectively find grant makers that match to your mission and are more likely to fund your nonprofit.
Make grants research a habit
Like most things, your skill at researching grant opportunities and identifying strong potential matches for your nonprofit will get stronger with practice. If you don’t have the opportunity to hire a dedicated prospect researcher, you must build time for grant research into your own schedule—we recommend at least a half or full day every month. This regularity will keep your prospect pipeline fresh and your prospecting skills sharp. You’ll need the right tools to conduct research. Subscribe to the Foundation Directory Online (FDO) grant research database or visit your regional Foundation Center or other public locations nationwide where you can use FDO for free.
Leverage your relationships
Mine your inner circle for connections to potential funders. Have open conversations with donors and volunteers about their affiliations to family funds or local foundations. Ask your board members to review board lists of the funders you wish to pursue. Having an “insider” with influence at a foundation certainly doesn’t guarantee funding will follow, but it can help establish a level of trust which can be a great first step.
Revisit past and current funders
Don’t overlook past and existing funders—your best prospects are funders who’ve funded you before. Make a list of all grant funders in your organization’s history and assess what happened in each relationship. Create a plan of action to repair trust wherever expectations of a grant were not met and to restore any relationships that have gone cold.
Ask yourself these questions about each funder that is funding you now or who has funded you recently:
- How much are they giving elsewhere? If you’re receiving $20,000 a year from a funder but you see they are making grants of $50,000 to similar groups, it might be time to refresh your strategy.
- What has changed since the last time you applied? Be sure to check for changes to a funder’s guidelines, criteria, and deadlines each time you re-apply so that you can remain compliant and competitive.
- Can you get face-time with the funder? Through an in-person or phone discussion you can build helpful rapport with program officers, keep current on the foundation’s interests and priorities, and even learn about new funding programs or an additional portfolio that could become a source of additional funds.
- Will they help connect you to other funding opportunities? Ask your current funders which other grant makers they believe might be interested in learning more about your nonprofit. They may even be able to help make a personal connection to a new potential funding source.
Think broad, then narrow about new potential funders
Think of your grants research process like a funnel. Start at the top, where you will cast a wide net, then gradually narrow down to a tighter pool. When you first set up search terms in the grant research database, start with broad terms—so if you are an orchestra, start with “Arts and culture” (which yields 27,690 results) instead of “Music ensembles and groups” (which yields only 186 results). From here, begin to gradually omit funders through process of elimination by layering on additional search terms and criteria. For example, you might next eliminate funders who don’t match to your geography if you only benefit people in a defined region; then eliminate funders who give only to pre-determined organizations; then eliminate funders who don’t make capital grants if what you need are funds for a new building.
Look for clues in the Form 990
Review the funder’s website and guidelines to understand their funding priorities, but don’t stop there. A funder’s past grants are the best indicators of what the funder will fund and for how much. Examine the funder’s IRS Form 990 for clues that can guide your request:
- Does this funder fund organizations similar to yours? If your organization is a community-based after-school program, and the funder’s past grants have gone mostly to high schools and colleges, this is likely not a strong match.
- If the majority of a funder’s grants are for $10,000, and only a few are for amounts much greater, it’s likely you should not request more than $10,000. “Outlier” grants may be for multi-year initiatives and are likely going to long-time grantees, and are generally not an indicator of what to expect as a first-time grantee.
- The 990 might also describe the purpose of each grant (for example, “Seed funding” or “Capital”) or a specific project (for example, “Hoop houses for urban farm”). Trust that you are not an exception—if, for example, the funder seems only to give project-specific grants, don’t request general operating funds.
- Look at several years’ worth of 990s, not just the most recent one, to discern trends and patterns. If the same grantees appear on a funder’s grants list year after year, you’ll likely have a hard time “getting in.” You may have a better chance with a funder who seems to change up their grant making frequently and welcome new grantees into their fold.
Prioritize the best prospects for your organization
Every grant opportunity has an opportunity cost—what else would you have done with the time, money, and other resources that were required to complete this application? So concentrate your efforts on the funders with whom you think you are most likely to gain traction:
- Low-hanging fruit: Your best bets include past funders you are approaching again, funders with whom you have a personal connection, and funders whose guidelines, priorities, and past grants make them an unmistakable match.
- Funders with a lower barrier to entry: Especially if you are just getting started in grant seeking, you might experience more declines than wins. Be smart about how you meter out your energy. Favor opportunities that require a letter-of-intent or simple application, and be cautious about jumping into a complex application with multiple attachments or steps in the process as a first approach.
- Accessible funders: Prioritize funders who are receptive to communication from grantees. Having a conversation with the funder before you work on the grant application can prove invaluable. On one hand, you may gain insights that help you prepare a stronger proposal or recruit an ally who will advocate on your behalf. On the other hand, you may save yourself from wasting time and energy on the application if you learn that you just aren’t a great fit and shouldn’t apply. Unless the funder’s guidelines explicitly prohibit contact from grantees, pick up the phone to initiate a personal contact and try to begin a relationship.
The process of vetting and prioritizing grant funding prospects is time-consuming and can be long. But there’s no doubt that a thorough approach to research is well worth it. By following these tips, you can be confident you spend your precious time and energy on the funders who are more likely to fund your nonprofit.
