Nonprofit Grants: How to Find and Win Them

Grants feel like the obvious answer to a funding problem: large sums, no individual asking, an application you can write at a desk. That framing is why most small organizations over-invest in them.

Foundations gave $117.15 billion in 2025, 19.0% of all US charitable giving. Individuals gave $394.20 billion, 63.9%, and adding bequests takes individual giving close to three quarters of the total. Effort should follow that ratio more closely than it usually does.

Where grants come from

Start local. A community foundation in your county knows your area, funds organizations your size, and will often talk to you before you apply, which is worth more than any application advice.

Finding them without paying for a database

Three free methods that outperform most subscription searching.

Read your peers’ Form 990s. Every foundation’s 990-PF lists its grants, with recipients and amounts. Every operating charity’s 990 shows its revenue. Find three organizations doing similar work at a similar size, pull their returns from ProPublica Nonprofit Explorer, and you have a list of funders who demonstrably fund work like yours in places like yours. This is the single most useful grant research technique available and it costs nothing.

Your community foundation’s website. They publish their grantees, their priorities and usually their deadlines. Many also maintain lists of other local funders.

Ask your board. Foundation trustees are people, and small family foundations in particular are frequently reached through a personal connection rather than an open call. A board member who knows a trustee is worth more than a database subscription.

Reading a funder before you write

Most rejected applications were unwinnable before they were written, because the organization was not what the funder funds.

That last row eliminates more prospects than any other. Many foundations, particularly family ones, give only to organizations they already know. An application to them is not a long shot, it is a wasted afternoon.

What a strong application contains

Applications are read quickly by someone with a stack of them, looking for reasons to set yours aside.

A problem stated with evidence. Sourced figures with years attached, plus what you know locally that national data does not show.

A solution described concretely. What happens, to how many people, delivered by whom, over what period. Specificity reads as competence.

A budget that matches the narrative. The commonest technical failure is a budget that does not add up to the amount requested, or that includes costs the narrative never mentioned. Check the arithmetic twice.

Outcomes you can actually measure. With the staff you will have. Promising an evaluation framework you cannot resource is a problem deferred to the reporting stage.

Honest capacity. Say who will do the work. A funder would rather read that you will hire a part-time coordinator than discover it later.

The full cost problem

Many funders will pay for a project and not for the organization that delivers it. That produces the pattern where an organization wins grant after grant and cannot pay its bookkeeper.

Two things help. Ask for the true full cost of the project, including the share of rent, insurance, accounting and management the project actually consumes, rather than the direct costs alone. And be direct when a funder asks what you need: general operating support is what most small organizations need most and request least.

The pressure to minimise overhead is widely recognised as damaging and is often called the nonprofit starvation cycle. Increasing numbers of funders know this and will fund operations if asked. The ones that will not are telling you something useful about themselves.

Reporting, which decides whether you are funded again

The report is not an administrative afterthought. It is the application for the next grant, read by the same person, and organizations that treat it as a formality lose renewals they never learn they were close to.

Three habits carry most of it. Diary the reporting dates the day the agreement is signed, because a late report is remembered longer than a good one. Report against what you promised, using the same measures in the same wording, so the reader can see at a glance whether it happened. And say plainly where something did not work, with what you learned and what you changed.

That last one is counterintuitive and it is the difference between a grantee and a partner. Experienced programme officers know that projects deviate, and a report claiming everything went exactly to plan reads as either unobservant or untrue. A report that names a problem and shows the organization noticed and adapted is evidence of the competence they are actually assessing.

If you will miss a target materially, tell them before the report, not in it. Funders can almost always accommodate a change discussed in advance and almost never one discovered afterwards.

Government funding is a different thing

Federal and state money is often described as a grant and behaves more like a contract, and organizations that treat the two the same get hurt.

You usually spend first and claim afterwards. Reimbursement in arrears means you fund the work from your own cash for weeks or months. An organization without reserves cannot safely take a large reimbursement-based award, and this is the most common way a growth opportunity becomes a crisis.

The compliance obligations are substantial. Allowable cost rules, procurement requirements, record retention, and detailed reporting. Above a threshold of federal spending in a year you must also have a Single Audit, which is more demanding and more expensive than an ordinary audit.

Indirect costs need an agreed rate. Federal awards recognise indirect costs, and there is a de minimis rate available to organizations without a negotiated one. Claiming nothing because nobody explained this is a real and common loss.

None of that makes government funding a bad idea. It makes it a decision for an organization with cash reserves, capable accounting and the capacity to administer it, rather than a solution to a shortfall.

After the decision

If you win, read the agreement before spending anything. Note the reporting dates, what the money may and may not be spent on, and whether payment arrives in advance or in arrears, because arrears means you fund the work first.

Restricted grant money must be tracked separately in your accounts, and the release from restriction as you spend is a journal entry someone has to remember to make.

If you lose, ask why. Many programme officers will tell you, and the answer is frequently that the fit was wrong rather than the application was weak, which saves you applying again. A courteous reply to a rejection is also how a relationship starts, and next year’s decision may be made by the same person.

Questions people ask

How do small nonprofits find grants?

Start with three free methods before paying for anything.

Read the Form 990s of organizations doing similar work at a similar size, available free on ProPublica Nonprofit Explorer. Their funders are demonstrably funding work like yours. Foundations' own 990-PF returns list every grant they made, with recipients and amounts.

Then your community foundation, which publishes its grantees and priorities and often lists other local funders.

Then your board, because small family foundations are frequently reached through a personal connection rather than an open application.

Paid databases are useful once you have exhausted those and have the capacity to apply at volume. They are rarely the constraint for an organization writing four applications a year.

What percentage of nonprofit funding comes from grants?

Foundations gave $117.15 billion in 2025, 19.0% of total US charitable giving. Individuals gave $394.20 billion, 63.9%, and bequests a further $62.19 billion, which is also individuals.

So roughly three quarters of charitable giving comes from people rather than institutions, which is the opposite of how most small organizations allocate their fundraising effort.

Your own mix will differ by subsector. Some fields are heavily foundation-funded and some are almost entirely individual. The sector average is a starting point for a conversation, not a target.

How long does it take to get a grant?

From identifying a funder to money arriving, commonly six to twelve months, and sometimes longer.

Foundations often review on a quarterly or annual cycle. A deadline in March may be decided in June and paid in August. Federal grants are slower still.

The practical consequence is that grants cannot solve a cash flow problem you have this month, and organizations that plan around them as though they can get into trouble. Grants fund the year after next. Individual giving funds now.

Can a new nonprofit get grants?

Yes, though the field is narrower, and it usually starts locally.

Many funders require your determination letter, and some require one or two years of financial statements or a completed Form 990, which a first-year organization does not have. That is not a judgement about you, it is a due diligence policy.

What is realistically available in year one: community foundations, small family foundations, local corporate giving, and funders with an explicit interest in new or emerging organizations. A fiscal sponsor also opens doors, because you apply under their track record rather than your absence of one.

Meanwhile, build individual giving. It has no eligibility criteria and it is the money that proves to a funder that other people believe in you.

What is the difference between restricted and unrestricted funding?

Restricted funding must be spent on what the donor or funder specified. Unrestricted funding can be spent on anything within your mission, including rent, salaries and the bookkeeper.

Most grants are restricted to a project. That creates the familiar problem of an organization with a healthy bank balance that cannot make payroll, because most of the balance is committed elsewhere.

Restricted funds must be tracked separately in your accounts, and the release from restriction as you spend is a manual journal entry in most accounting systems.

General operating support is the most valuable money a small organization can receive and the least often requested. When a funder asks what you need, say so.

Should we hire a grant writer?

Only once you have a pipeline of genuinely well-matched prospects, because a grant writer cannot fix a fit problem.

Most rejections are about fit rather than prose. A skilled writer applying to funders who do not fund your geography, your field or your size will produce well-written rejections.

Do the research first. If you have five funders who demonstrably fund organizations like yours and nobody with time to write five applications properly, that is when a writer earns their fee.

Avoid arrangements paying a percentage of grants won. Professional fundraising bodies consider commission-based compensation unethical, and many funders will not accept applications prepared on that basis.

Do we need to be a 501(c)(3) to get grants?

For most private foundation grants in practice, yes or the equivalent through a fiscal sponsor.

Foundations can technically grant to non-charities using expenditure responsibility, which involves additional oversight and reporting on their side. Most simply decline rather than take that on.

The standard route for an organization without its own determination letter is fiscal sponsorship. You apply through a sponsoring 501(c)(3) that receives and administers the grant, and many funders are entirely comfortable with this.

Some government and local funding is open to unincorporated community groups. Check the specific programme, because the rules differ from private foundation practice.

Why do grant applications get rejected?

The most common reason is fit, not quality. Wrong geography, wrong field, wrong size of organization, wrong size of request, or a funder that does not accept unsolicited applications at all.

After that: budgets that do not add up or do not match the narrative, activities described too vaguely to picture, outcomes the organization plainly cannot measure, and requests for support types the funder never gives, such as operations or capital.

And sometimes the application was strong and the money ran out. Foundations routinely fund a fraction of good applications they receive.

Ask. Many programme officers will tell you which of these it was, and that answer is worth more than the application was.

This is reference information, not legal or tax advice. Rules vary by state and change over time. For a decision that carries real consequences, check the current text at irs.gov or your state registry, and talk to a nonprofit attorney or CPA.