If your nonprofit has a special project in mind, you might be thinking about applying for a grant to fund it.
Grants can be a great resource for your nonprofit to expand its outreach or go into a new research area. But the process of writing your grant proposal might seem overwhelming.
A successful grant proposal must be persuasive, concise, and thorough. You will also need it to be compelling, so your reader keeps reading your proposal to the end.
Grants, unlike loans, do not need to be paid back, and many of them are awarded every year. But they can be difficult to get because there are so many nonprofit applicants.
You should also be aware that if you need a cash infusion quickly, you will probably need to find another funding source. Grants can take some time, and they are not a sure thing.
Seeking grants should be part of your overall fundraising plan, but you will probably not be able to sustain your nonprofit on grants alone.
Some organizations hire grant writers, but startup nonprofits may not be able to. If this is your first time writing a grant proposal, the following guide outlines the basics to help you write a successful one.
Grant Writing Tips
- Follow the funder's instructions. Stay below word count limits if the funder gave any.
- Include any required information, like your nonprofit's 501(c)(3) letter. Some funders will also require you to name your nonprofit's board members and their affiliations.
- Address your cover letter to the correct person. If you do not know who that person is, make a quick phone call to the organization's office to find out.
- Your nonprofit's executive director should sign the grant proposal.
- If you have a personal connection to the funder, make sure to mention this. It is always a good idea to establish a human touch between your nonprofit and a potential funder. This can help them to better understand your passion about serving the public good.
Sources of Grants
Grants can be available from private foundations, corporations, the federal government, and local governments. Federal grants are usually only available for nonprofit organizations.
A good resource for nonprofit grants is Grants.gov. This government website offers a searchable database of available government grants. It is also available as a mobile app.
You can also try the United States Small Business Administration (SBA). The SBA is a government agency that distributes a limited amount of grants to nonprofit organizations.
These highly coveted SBA grants can be some of the most difficult to get. The eligibility requirements on these grants can also be very specific. The SBA often provides FAQs and checklists with their grant application instructions to help you.
Grant Proposal Sections
You will need a persuasive and concise grant proposal to convince funders that you are the right candidate for the award.
The grant proposal writing process is hard work, but securing a private or government grant can make it worthwhile. Although the funder will usually have specific requirements on what to include in your proposal, certain information is usually required by most funders.
Cover Letter Basics
The cover letter in a grant proposal is sometimes called the letter of inquiry. You usually do not need to write a cover letter for a government grant, but they are recommended for private grants.
For non-government grants, the cover letter is a key portion of your grant proposal. It forms the funder's first impression of your request. To improve your chances of securing grant funding, your cover letter should be engrossing and easy to read so that the funder wants to read on to the next section.
The cover letter should contain:
- An introduction to your organization along with the dollar amount of your funding request. Make sure to include information about how the money will be used.
- A statement about how the funding can further your organization's mission statement.
- Your contact information in case the donor has questions.
- A concluding statement summarizing what this funding would mean to your organization and the community you serve.
You should limit your cover letter to a few paragraphs. It should not be longer than about a page in length.
The executive summary of a grant proposal is sometimes called the abstract. It should be a general outline of the entire proposal that is both concise and compelling. It should also contain:
- An introduction: Explain who you are, what your nonprofit does, and what its mission is.
- A description of the program: Make sure to include details about why your nonprofit is well-suited to start the program you seek to fund. Highlight any past successes and describe how you will build on your successful track record.
- An evaluation section: In this section, you should describe how your organization will evaluate the success of the program.
- Long-term plans: Explain whether you will need more funding to accomplish your goals. This section is similar to a business plan. It outlines how your nonprofit will balance its revenue and costs to financially sustain its mission.
Statement of Need
As the name suggests, the statement of need is your chance to convince the funder that there is a need in the community or the world for your project. You should collect data, expert opinions, and any other supporting information you may have about the need for your project.
The statement of need should hold your reader's attention through stories, statistics, news stories, and more. These facts should be woven into the statement of need to convince the funder that your project is essential for the public good.
If you win a grant, you should make sure to follow the applicable tax laws. Depending on your organization's tax-exempt status and other factors, grant funds might be taxable income. Make sure to keep a good record of these funds for tax purposes.
How an Attorney Can Help
If your nonprofit seeks grants, you may have concerns about the application process or the tax implications.
A business attorney can help answer your questions and help with small business loans if you need additional funding.