There are different types of grant funding, with varying levels of “restrictions” put on the award. The following list of grant types isn’t meant to be comprehensive—for example, it doesn’t include research grants, fellowships, and scholarships—but it does include the most common categories of grants for nonprofits, schools, faith-based organizations, and grassroots organizations.
1. GENERAL OPERATING GRANTS
General operating grants provide maximum flexibility. You can use these unrestricted funds to cover overhead expenses and administrative costs, or to support for the project or program of your choice. Unfortunately, operating support grants are relatively rare (I’ve heard that only 10% of grantmakers make this kind of award), and so you will likely have to be more specific in your ask.
2. PROGRAM AND PROJECT GRANTS
Program and project grants are the most common type of grant award. They are more restrictive, since grant funds can only be used to create, support, or grow the programs or projects described in your grant. One sub-category worth mentioning here is seed funding, which can be used to support a new agency or to help launch a pilot project.
3. CAPACITY BUILDING GRANTS
Capacity building grants help an organization expand its overall potential—by establishing or improving internal systems, hiring or training staff, evaluating your overall effectiveness, etc. I’ve written capacity building grants that helped nonprofits create development plans, train board members in fundraising, and upgrade wireless connectivity. I even got a grant to pay for more hours for the grant writer!
4. CAPITAL GRANTS
Capital grants are aimed at constructing new facilities, renovating an existing space, or purchasing costly equipment. For large capital projects, grant writing is usually just one component of a multifaceted “capital campaign”.
5. ENDOWMENT GRANTS
Endowment grants help establish or grow an endowment, which consists of a reserve of money (usually substantial in size) that has been set aside for perpetual use. The principal is invested. Your organization gets to draw funds from a percentage of the interest earned on that investment.
6. MATCHING GRANTS
Matching grants (or challenge grants, as they are sometimes called) come in different forms. Imagine a major donor says she will contribute $10,000 to your nonprofit if you can raise that same amount from other sources: members, trustees, appeal letter, etc. In this scenario, a grantmaker is approached to help match someone else’s gift. In a second scenario, the grantmaker is asked (via a grant application) to provide the initial seed funding. Both scenarios can stimulate fundraising because they give other donors a chance to “double their impact.” Pursue the second option only with care, however. Even after you receive a grant award notification, you will still have a lot of fundraising left to do. And if you can’t raise the match, you likely won’t receive the grant funds at all.
Question: Which grant types have you pursued for your organization?
The Grant Writing Process: 11 Basic Steps (PDF & Checklist)
Writing grants for your organization is an adventure.
You wouldn't set out on an epic hike without at least a general understanding of the terrain ahead. So why would you set out on your grantseeking journey without an overview of what lies in store?
This eight-page PDF and checklist are the perfect place to start.