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Funding plays a critical role in successfully getting your nonprofit organization off the ground. Initially, you have to cover many expenses, including setup fees, running costs, and outreach, which are crucial for launching your organization effectively.
Startup grants can help bridge this financial gap, transforming your vision into a reality by providing the necessary funding to establish a strong foundation.
In this article, we will explore some of the best startup grants available for nonprofits and will guide you through the process of selecting the most suitable options for your organization.
What are startup grants for nonprofit organizations?
Startup grants provide financial support to nonprofits, helping cover specific aspects of establishing a new organization without incurring debt. Similar to seed money businesses receive from investors, these grants can fund early costs like incorporation, marketing, basic equipment, or initial program development.
Most grant providers have guidelines on how you can use the funds, and it's important to understand these rules to maintain compliance with the funding organization. Failure to do so can result in the termination of the funding or a request to return unused grant money.
Private foundations are one of the best sources of grants for new organizations, as most of these foundations exist solely to better society by supporting nonprofits. These can be family-run, individual, or community foundations.
You can check for potential foundations through local resources like your city council or local Chamber of Commerce. Search online grant databases that let you filter by state, region, and town.
2. Corporations
Many companies aim to make a positive impact in the world by supporting nonprofits that align with their values, such as sustainability or community development. Notable examples include Amazon, Google, State Farm, The Home Depot, and more.
Corporate grants can come in the form of funds, tools, or acceleration programs. New nonprofits should check the corporate responsibility section on the company website to find details on grant programs.
3. Federal grants
The government awards federal grants to support specific projects or startup costs. While applying for these grants requires a lot of time and paperwork, they do offer significant amounts and add to your credibility.
To search for federal grants, register at Grants.gov, where you can browse grants issued by over 24 agencies. The platform allows you to filter grants relevant to your industry.
Additionally, check the two largest federal grant-giving bodies, which are national endowments:
National Endowment for the Arts (NEA): For nonprofit projects that create new American art or expand access to art-based activities for communities.
National Endowment for the Humanities (NEH): For organizations that focus on social, historical, literary, and educational topics.
4. State or local grants
You will find state and local governments more inclined to fund the growth of smaller and new organizations in their areas. To discover these targeted grant opportunities, explore the following resources:
Your state or city government website
NEH state councils
Searchable databases of philanthropic foundations (filtered by state and region)
State government agencies and endowments
Regional and municipal commissions
6 key startup grants for new nonprofit organizations
1. The Draper Richards Kaplan Foundation (DRK)
The DRK Foundation offers early-stage funding focused on solving pressing social and environmental issues. It supports organizations operating in Africa, Europe, Latin America, India, and the US. Independent and 501(c)(3) nonprofits and fiscally sponsored organizations in select cases can apply.
Their aim is to find social entrepreneurs with dynamic ideas and provide them with three years of unrestricted capital. DRK also offers ongoing support by joining the board of directors and partnering with the organization's leadership to help build capacity and scale impact.
Applications can be submitted online and are accepted year-round. DRK distributes funds twice a year over a three-year term, totaling $300,000.
Ben & Jerry's Foundation supports community-based, grassroots organizations that tackle environmental and social injustice. Its National Grassroots Organizing Program (NGO) provides two-year grants for constituent-led, small grassroots organizations in the United States and its territories.
These grants offer unrestricted, general operating support. Organizations can receive up to $30,000 per year, with an average grant size of $20,000 per year.
To be considered for funding, each applicant organization must:
Have an annual operating budget under $350,000
Be a nonprofit with 501(c)(3) or have a fiscal agent with this status
Be US-focused or US-based
Use grassroots-level organizing campaigns as the main strategy to create social change
Applications for the grants are accepted year-round through their website.
3. Bank of America Charitable Foundation Grants
The Bank of America Foundation supports organizations focusing on issues fundamental to economic mobility in moderate and low-income communities. They offer two different grant options:
Economic Mobility Focused on Needs of Individuals and Families: Focused on organizations serving individuals and families in the community in certain areas. These include health, employment, workforce education, and more.
Economic Mobility Focused on the Needs of the Community: Focused on organizations offering affordable housing, small business resiliency, and neighborhood revitalization.
To apply, nonprofits must pass the eligibility quiz. Submit a grant proposal with their requested amount.
4. State Farm Community Development grants
State Farm gives grants to groups that help communities, with a focus on improving safety, education, and growth. State Farm Community Development grants target organizations that invest in and develop stronger neighborhoods by offering:
Affordable housing - including home repair and construction
Job training programs
Small business and commercial development initiatives
Financial literacy education
Sustainable housing and transportation solutions
Programs addressing food insecurity
Neighborhood revitalization projects
These grants aim to support nonprofits that are actively working to improve community infrastructure, economic opportunities, and overall quality of life in underserved areas.
5. The New York Foundation Grant Program
The New York Foundation grant program supports newly formed or emerging organizations, particularly those with limited access to institutional funding. It offers $47,500 per year, up to five years, to emerging nonprofit groups.
Beyond funding, they offer access to capacity-building resources, including workshops, one-on-one sessions, pro-bono legal services, and more.
To be eligible for grant funding from the NY Foundation, your organization must:
Use grassroots advocacy and community organizing as primary strategies to address the root cause of oppression
Address poverty, inequality, or other social issues
6. The Pollination Project (TPP) Grants
TPP supports grassroots and community-level changemakers who work towards creating a more compassionate world. It awards up to $1000 in seed funding to early-stage nonprofits with less than $50,000 in annual budgets. The TPP also offers capacity-building support and connections with other changemakers within its global network.
Applications are reviewed by volunteer grant advisors who have previously secured funds from TPP.
7 steps to secure nonprofit startup grants
1. Research similar nonprofit organizations
Begin your grant search by researching nonprofits with similar missions to yours. Visit their websites and look for dedicated grant pages or links to their tax forms.
You can also use websites like Charity Navigator and GuideStar, which provide financial and program information for nonprofit organizations worldwide. These sites can help you find tax forms and a list of government and foundation grant sources these organizations have received. Additionally, connect with other nonprofits in your area to learn about potential startup funding strategies.
Once you have a list of relevant startup grants, deepen your research and check out their official website or online grant databases for detailed guidelines.
2. Start small with nonprofit grant opportunities
While it may be tempting to apply for grants with larger rewards, it’s important to focus your time where it will have the greatest impact. Some larger foundations, particularly national ones, can be more cautious about supporting new nonprofits, although individual policies vary.
Focus on grant programs where your organization meets all the eligibility requirements, increasing your chances of success. Start by applying for local and smaller grants within your city or town, and then move on to bigger opportunities.
3. Pay attention to grant guidelines
Grant guidelines vary drastically across federal, state, private, and corporate foundations. Each grant program also has its specific criteria.
It's better to take the time upfront to ensure you meet the requirements rather than to work hard on applications that will ultimately fail.
Familiarizing yourself with guidelines also includes understanding post-award requirements. Grant-giving institutions typically require reports on how funds are used and the progress achieved through the awarded grant.
4. Get your paperwork in order
Prepare the following documents in advance to streamline your grant application process:
A statement highlighting how your programs are unique
5. Build relationships
You have a higher chance of winning the nonprofit startup grant with personal connections. Do your board members or stakeholders have connections to foundations or corporations?
They can connect you to the right people and arrange casual introductory meetings to present your nonprofit vision. You can also enquire from your staff, volunteers, and other supporters if they have any ties with grant-giving institutions.
It may also be beneficial to network yourself. Find ways to build relationships with local businesses and foundations through community groups or the local Chamber of Commerce.
Speak with other nonprofits to seek advice, introductions, and networking opportunities related to grant funders.
6. Take feedback into account
As you apply to various grant-giving foundations, it’s likely you won’t hear back from all of them. However, this doesn't mean that those rejected applications were a waste of time.
Instead, contact the funders and see if they can provide any suggestions. Any feedback you receive from grant funders should be recorded and applied to other applications. If they can't provide any information, share the application with your professional network and ask for feedback.
You can also contact a professional grant service or a grant writer and ask them to review your application and help you with the proposal.
Don't depend solely on startup grants for your nonprofit; instead, incorporate a variety of funding sources into your financial strategy. While grants can be valuable, they often come with restrictions on how you can use the funds, potentially limiting your organization's flexibility.
By diversifying your funding streams, you'll give your nonprofit more freedom to operate and adapt to changing needs, ensuring greater long-term sustainability and impact.
Here are some key funding options to consider:
Individual Donations: Create an online donation page. Ask your immediate network to share it with their peers and secure donations.
Social Media Fundraising: Set up a profile on social media channels like Facebook or Instagram. Use their platform-specific donation feature, like Donate Now stickers, to raise funds.
Fundraising events: Host a launch event, either virtual or in-person. It will allow you to raise money while spreading awareness about your nonprofit’s mission.
Fiscal Sponsorship: Partnering with an established nonprofit that acts as a fiscal sponsor allows you to raise funds under their umbrella before getting your 501(c)(3) status. This can simplify the process of securing early funding.
In-Kind Donations: Instead of cash, seek in-kind donations. These include office space, equipment, or professional services (legal, accounting, etc.) from local businesses or individuals.
Final words on startup grants
Securing startup funding is a critical step in bringing your nonprofit's vision to life. While grants can provide essential initial support, they're just one piece of a comprehensive funding strategy. As you explore various grant opportunities, remember that diversification is key to long-term sustainability.
By combining your grant-seeking efforts with other fundraising methods, you not only increase your chances of securing funds but also build a strong community around your cause.
As you navigate the challenges of nonprofit funding, consider using modern tools and platforms to streamline your efforts. Zeffy offers a 100% free fundraising platform for nonprofits. By using such resources, you can focus more of your energy on pursuing your mission and creating meaningful impact.
Yes, new nonprofit organizations can receive grants, but it will be difficult for them to get larger grants. Community foundations are the best grant options for them as they also offer training and professional development.
Another path is fiscal sponsorship. This lets new nonprofits apply for grants through established groups. Both methods give new nonprofits a chance to get funding and support early on.
The time it takes to get a grant depends on the funding source and the type of grant.
Government grants take at least nine months to complete. This timeline encompasses several stages: research, preparing the application, and the review process.
For corporate grants, the application process typically takes six weeks, followed by a waiting period of at least six months for approval. After approval, the timeframe for fund transfer can vary from one to three months.
Federal and state governments, along with corporations, list grant processing times on their websites.
Applying for grants is an effective way for organizations to secure funding. There are certain pitfalls that applicants fall into, reducing their chances of success. Here are certain common yet critical mistakes to avoid with grant applications:
Lack of research: Many nonprofits don't do enough research on potential funders. They miss key details on their requirements and their past funding history. As a result, they end up applying to organizations with little chance of securing the grant.
Not following guidelines: Failing to adhere to the grant instructions on format, deadlines, or required documents. Missing key information, such as budgets or organizational details.
Weak grant proposal: Writing a long, generic, or vague narrative that does not reflect your vision. Grant proposals need a compelling and clear story, focusing on your mission, goals, and impact.
Unrealistic budget: Present a practical budget matching your project's scope. Don't ask for too much or too little funding. Include only allowed expenses and explain each item clearly. Justify all costs and income sources in your proposal.
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Get your guide to securing grants for nonprofits. Learn how to find grants, how to choose the best options, and a list of the top 2024 grants for nonprofits.
