Types of Grants

Types of Grants

When your organization is looking for a grant, you aren’t only looking for a funder who might be interested in funding your organization. You have to find a funder who will fund the types of grants that you are looking for.

Here are the types of grants that your organization might be in need of:

  1. Project or Program Grants: fund the cost of a specific activity. Project or program grants are the most common grant applications that you will come across. A program grant funds the cost of starting a new organizational program or project.  For example, perhaps your an organization that currently employs women in Kenya. They currently are hired to make clothes that are sold here in the United States to provide them with income, schooling for their children, healthcare, etc. Now you want to start a new program where you employ more women at a local smoothie stand. You could apply for a program grant to help get that started.
  2. Operating: supports the cost of doing business such as salaries, advertising, office expenses, rent, etc. Another type of grant is an operating grant, which is when you are seeking money for your general operating expenses such as salaries, advertising, office space, office supplies, etc.
  3. Capacity building: Capacity building grants help your organization expand a program, function more effectively, or become more self-sustaining. For example, your organization currently helps 150 students with the homework after school Monday and Wednesday. You decide that it is time to take it up a notch and you want to start helping 200 students three times a week instead of 150 students two times a week. This is a case where you would be seeking a capacity building grant.
  4. Matching Grants: they will contribute up to a certain amount if you can match that amount through fundraising. Matching Grants are grants where the funder will match your fundraising efforts for a purpose up to a certain amount. For instance, say you are building a school. You need $50,000 and decide with the funder that they will match your fundraising efforts dollar for dollar up to $30,000. So, if your organization fundraises $20,000, you will receive $20,000 from the funder.
  5. Capital Contributions: funding for land, buildings, remodeling, or purchasing equipment Another type of grant is a capital contribution, which is sought to fund the purchasing of land, buildings, or equipment.
  6. Endowment: The sixth type of grant is an endowment grant, which is money your organization seeks to put away into restricted, conservative investments. Your organization then uses the interest earned on the principal investment year after year to support your operating budget.
  7. Start-up Grants: Lastly, there are start-up grants that fund the startup costs of a nonprofit organization, but to be honest, these are few and far between.

Okay, as a summary, there are 7 main types of grants: project grants, operating grants, capacity grants, matching grants, capital contributions, endowment grants, and start-up grants. You can’t just assume that a grantor/funder is going to approve of funding any kind of grant. Many will tell you exactly what kind of grant they will fund. The most common type of grant is a program grant, and we are starting to see more overhead grants (YAY!). Before you complete a proposal, you will need to make sure that the funder grants the kind of funds you are looking for.

Source: Types of Grants By ERSFORNONPROFITSADMIN. OCTOBER 31, 2016


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