Read This Before You Apply for Foundation Funding

Foundation Funding Homework

If your nonprofit board has been considering applying for a foundation funding, that’s great, but there are a few reality checks you should definitely go through before writing those applications. Let’s check in, shall we?

nonprofits need to cover these basics before applying for foundation founding

Reality Check #1: Finances

Foundation grants will NOT help you start a nonprofit, bail a nonprofit out of trouble, or help you pay the bills.

The reality is that your nonprofit organization needs several revenue streams. Foundation funding is important but comprises only one of the revenue streams of an established 501c3 organization. While many nonprofit founders use their own money or money from private funders to get started, a foundation grant is a nice way to grow your mission once your organization becomes more established.

Funding from foundations represents less than 20 percent of overall nonprofit money. Most nonprofits’ main funding comes from individual donor charitable gifts as well as self-generated revenue in the form of earned income. If you think about this in terms of the food pyramid, foundation funding is at the narrow top, not the bottom.

Grants do fit a particular niche – they provide short-term cash infusions that meet a particular purpose within your organization.

RELATED: Grants for Nonprofits: Using Free Resources to Find Foundations

Reality Check #2: Know Your Stuff

Before you apply for a foundation grant, it is important to know the types of efforts these organizations fund, and more importantly, what they don’t fund. Typically, there are several main types of funding efforts.

  • Project grants to fund specific programs for a specific time period
  • Grants to build capacity to help your organization expand in a particular area. (Examples: building your fundraising capacity, counseling services, career services, etc.)
  • Research grants for research-oriented nonprofits are usually attached to a particular researcher or research topic
  • In-kind grants are non-monetary provisions of equipment or pro bono personnel
  • Operating fund grants, while hard to find, can provide money for operating expenses

Reality Check #3 Have A Plan

If your organization needs quick cash, you are likely barking up the wrong tree by pursuing foundation funding. These grants are not funded instantly. Instead, they take time. First, you must find the appropriate foundations for your organization. The proposals are usually not quick applications, but rather in-depth proposals that typically ask you how you will use the short-term foundation funding to sustain the project over the long term. The foundation’s review process will often take several months.

Planning ahead on your part may make the difference in you receiving the grant. For example, your organization has an advantage if you can show that you have already raised some of the project funds or if you have matching funds from partners. In fact, these days, many foundation grants require matching funds. Be aware that most of these grants come with restrictions; funds are strictly for use on a particular project, and all grants come with reporting requirements.

RELATED: How to Write a Grant Proposal

Foundation Funding Groundwork

In closing, foundation grants are definitely worth pursuing, but remember the niche they fill within that pyramid. Go forth and conquer those applications!

RELATED: The Right Mindset for Nonprofit Grants

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