Getting More Out of Your Grant Funding

by | Mar 29, 2024 | Development/Fundraising


When it comes to sustainability, some grants are better than others.

Usually, your first grant from a foundation will be a one-year project grant. These grants fund very specific activities and often have limited overhead rates. This means most of the funds go to direct project costs. If you have too many project grants and not enough unrestricted funding, you can end up in what’s called the “nonprofit starvation cycle.”

But you don’t have to be stuck in this cycle!

The most powerful thing you can do as a grantee is ask your program officer whether they are open to other types of funding, such as multi-year commitments, general support, or capacity-building grants. Even if they say no for this year, they might just be ready to commit in the future.

To help you think through your grant renewal strategies, here are different types of funding to consider requesting:


Multi-year grants

Multi-year grants provide funding for two or more consecutive years. The benefit of multi-year grants is that they provide an up-front commitment that’s documented in writing. With a multi-year grant, you can plan programming and spending several years into the future, all without having to prepare for an annual ask and grant proposal. Of course, multi-year grants still generally require grant reporting. You’ll also want to provide regular updates to your grantmaker as you would for any donor.


Unrestricted grants

Also called general support or core support grants, unrestricted grants are made to an organization as a whole, rather than for a specific project. When a foundation makes an unrestricted grant, it’s a vote of confidence in the grantee organization. Unlike project grants, unrestricted grants allow nonprofits to spend funds where they are most needed, including in less flashy areas like operations and infrastructure. Luckily, grants can be both unrestricted and multi-year, which is every nonprofit’s dream scenario.


Capacity-building grants

Some foundations are increasingly exploring how they can help grantees build capacity. Because donors want to hear about impact, not operations, too many nonprofits end up growing beyond their own infrastructure, whether that’s management training or human resources personnel. Dedicated support for capacity building enables organizations to make sure their internal capacity keeps up with their external impact. Perhaps the most well-known example of this is the Ford Foundation’s BUILD Program. BUILD provides grantees with significant multi-year grants that are split between unrestricted support and funding dedicated to capacity building, such as undertaking a strategic planning process.


Renewable grants

While multi-year grants are ideal, some foundations make it clear that annual grants are renewable. A foundation that renews a grant every year for ten years can become a pillar of your organization’s funding strategy. In this case, maintaining open communication with your program officer or other foundation staff—including frequent impact reports—is especially essential.


Seed funding for new projects

While the examples above are about longer-term investments, foundations can also be some of the best places to seek seed funding for new projects. If a foundation has been funding your organization for years, they might jump at the opportunity to help you pilot a new project, program, or strategy.

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