Federal or Foundation Grants- What’s The Difference Between Grant Opportunities?
A universal truth for nonprofit organizations: you can’t run your organization without grant funding! Depending on the nonprofit, according to industry-standard estimates, between 10-30%- or more- of your funding might come from grants.
But even from your very first look at the grants process, you can see how vast your options are in applying for grant opportunities.
For a lot of folks, the very first thing you think of when you hear the word “grant” is large, federal grant opportunities. With a little more digging, you start to see the private granting universe, which includes areas like family foundations and Donor Advised Funds (DAFs).
For someone new to the grants research process, the first and best place to start is right here. In this article, we will explore a high-level overview of what federal grants and foundation grants are, and how you can select the best option for your nonprofit.
What are federal grants?
A federal grant is a way the United States federal government funds concepts and projects to provide services that benefit the public. For a full list of federal grant-making agencies, you can check out this list, and to see some federal grant opportunities, you can go here.
What are foundation grants?
Foundation grants, in essence and when thinking about how they relate to your nonprofit, are private, charitable donations to nonprofit organizations. Foundation grants differ from regular private donations in that they most often require a business plan and reporting. To check out an example of what foundation grants are, you can check out this free search tool.
So how do you choose? Here are a few questions to ask yourself about choosing between a federal and foundation opportunity:
Keep in mind that these rules are not hard and fast, but will help you as you’re starting out in getting a handle on what your grant calendar should look like.
1. What type of project do I want funded?
In considering your project, what stage are you in? Are you looking to have a small pilot funded, or scale up a large program with a history of success?
If you are working on a small pilot project, a foundation grant is your best bet. If you are looking to scale up your work on a very broad level, a federal grant opportunity would be the one for you.
2. What amount of funding am I looking for?
Your first inclination might be- as much as I can get!
BUT: with great grant funding comes great reporting responsibility. Grants are not a typical donation- they are more like an investment the grant funder expects a rate of return on, in the form of social good.
Also, grant reviewers can tell when your budget is inflated. It is highly important that your program budget is carefully tied to the actual expenses associated with the activities of your program.
3. What is my current staff/organizational capacity?
To maximize your time, and to be competitive for grants, you will want to do an audit of what your current staff bandwidth looks like. Both federal and foundation opportunities will require some research and some dedicated attention. However, typically, a federal grant opportunity takes a much longer time, and is a much more involved process than a foundation grant.
Key differences between federal grants, public charities, and private foundations to help with your strategic planning:
|Federal (Public)||Public Charities & Private Foundations|
|When should I start preparing?||3-6 months in advance.||1-3 months in advance.|
|How many hours will it take to write the proposal?||Writing a federal grant application takes a nonprofit an average of between 80 and 200 hours.
|When can I apply for the grant?||On a “rolling” basis- but you will want to pay attention to deadlines as you are prospecting.||On a “rolling” basis- but you will want to pay attention to deadlines as you are prospecting.|
|How much funding, on average, is available?
|$500,000 to multi-million||$11,000-$1.5 million (depending on the size of the foundation’s assets)|
Which is the grant for me?
It is always great to be prepared with knowledge when you start a new endeavor like grant prospecting. And when you go to write grants, it is critical to understand the difference between federal and foundation grants to ensure you have the capacity to apply. For even more information about the wide world of grants, you can check out this awesome glossary compilation, which explains what other grant categories you can also look into pursuing.
A solid framework to start with: if you are a new, smaller nonprofit, you will want to be careful with time and planning when it comes to federal grants, ensuring you have all the paperwork in line and the capacity to apply. Smaller, private grants might be the best place to start. If you are medium- to large-sized nonprofit looking to scale up an established, evidence-informed program, a federal grant might be a better fit.
However, there are no hard and fast rules when it comes to which opportunities you want to pursue as the decision is typically made by looking at risk vs. reward. If you have a project that is fulfilling your organizational mission and you and your team believe in, that is all that you need when you start looking for funding- and the folks at The Woolf Group can do the rest!
The TWG Social Impact team is here for you, to help create comprehensive grant prospecting, writing and management plans. Feel free to contact us for a complimentary consultation to discuss the scope of your organization and ways to effectively bring your mission to fruition.
By Catherine Ruff, TWG Social Impact Specialist and Strategy Consultant