Emerging Grantmaking Trends: What You Need to Know

Trends in the grantmaking world have in recent years been focused on leveling the playing field, creating more access to funding and pushing for greater equity across the nonprofit sector.

Rather than blindly continuing an old power imbalance between grantor (grantmaker) and grantee (your organization), grantmakers of all sizes are actively trying to provide more equitable access to the funding that organizations need to pursue new projects and provide critical services. It’s an admirable and much-needed push, but big-picture trends like this always necessitate strategy updates.

While pursuing the goals of equity and inclusion, grantmakers have become increasingly aware that they need to empower nonprofits to diversify how they use (and not simply rely on) grant funds. Grantmakers are looking to fund fundraising and capacity-building.

This translates into a new emphasis on stability as a requisite for funding. An organization should strive for financial sustainability and not put the majority of its eggs in a grant basket, so to speak.

Let’s delve deeper into this overarching grantmaking trend. We’ll walk through what it means to fund fundraising and then cover the following actionable next steps for your nonprofit to consider:

• Set your organization up for fundraising success.
• Prioritize foundation funders.
• Strategize your grants.

You’re already well aware that grant writing is a time-consuming process, so let’s get to it! You’ll be starting your next proposal in no time.

Funding Fundraising: The Emerging Trend in Grantmaking

Before we can explore techniques your organization can begin implementing, it is important to fully understand the logic behind “funding fundraising.”

Grantmaking bodies have long relied on project-based challenge grants for a number of reasons. Chief among these is the fact that they help to protect the grantmaking bodies from undue risk, that is, losing money on incomplete or failed projects.

For many grantmaking bodies, this historical reliance on challenge grants is now at odds with a new emphasis on equitability, though. If a nonprofit fails to meet its challenge grant goal, it won’t receive the grant money, and it’s wasted time, effort and resources that could’ve gone to building a more stable, independent base for itself. Meanwhile, the grantor has avoided losing money by never actually committing to the nonprofit’s mission.

That’s an ethical problem for many grantmaking professionals. Grant challenges and stipulations can’t be treated as entirely separate from a nonprofit’s core operations when many organizations rely on grant funding to stay afloat.

The overall inability or unwillingness of grantmaking bodies to supply more general fundraising assistance creates a vicious cycle of dependence without any meaningful investment in capacity-building. If an organization does rise to the challenge and receives matched funding, it’s likely not being reinvested in ways that sustainably increase capacity.

What does this mean for your organization?

The instability of grant funding is not conducive to the stability of your nonprofit. While applying for grants can be a component of your fundraising strategy, it should not be the crucial component. Unfortunately, many community- and service-based organizations rely on regular grant funding in this way and end up trapped in vicious funding cycles.

However, the overarching movement to reconcile inequities between well-funded organizations and those that are scraping by each season is attempting to address this issue. There are plenty of new initiatives and efforts being launched to help provide struggling organizations with the tools they need to build more sustainable fundraising infrastructures.

A major new priority among many grantors, then, is fostering financial sustainability. They more actively want their nonprofit partners to succeed beyond the initial grant instead of passively allowing them to fail.

This push for nonprofit sustainability is a push for nonprofit equitability. When an organization can achieve the fundraising capacity necessary to truly make the most of grant funds, they, in essence, no longer need the grant money. That’s the ultimate goal — to foster nonprofit sustainability by setting more organizations up for fundraising success.

Set Your Organization Up for Fundraising Success

If your nonprofit is planning to undertake a major fundraising project, like a capital campaign, in order to grow your fundraising capacity, it is vital that you set your organization up for success.

As grantmakers are looking to provide funding to nonprofits in more equitable and inclusive ways, it is up to your organization to show the grantors that you are prepared for the fundraising challenge and dedicated to making a measurable impact in your community.

After all, an organization that appears complacent in its fundraising strategies is not likely to attract new opportunities for meaningful and sustainable growth. That’s what grants are — opportunities to revitalize your organization and reach new fundraising potentials.

Grantors are increasingly aware of the need to provide technical fundraising assistance to potential nonprofit partners, but you still need to meet them halfway. That is, your organization needs to demonstrate its commitment to growing sustainably with one or more of these strategies.

Building your fundraising capacity.

Your organization must prove that it has the fundraising capacity necessary to sustain grant funds and continue to develop. Only relying on a few key equitable grantmakers for the majority of your general operating funds can easily lead your organization to become unstable and unproductive.

Analyze your nonprofit’s current fundraising capacity by answering the following questions:

• Are we reaching our fundraising goals every year? With how much difficulty?
• Do we have fundraising tools that align with our goals?
• Do we rely on grants to achieve solvency?
• Are we beholden to grantmakers? Do they have all the power?
• Do we use our resources to their fullest extent?

By assessing the state of your current fundraising capacity, your organization can begin to take the necessary steps toward maximizing the impact of any new funding you may receive.

In order to conduct the most accurate analysis of your fundraising capacity, it’s usually a good idea to seek the objectivity of a third party. A fundraising consultant can provide an unbiased and veritable assessment and then lay out realistic next steps for your team.

A nonprofit consultant whose style aligns with your organization’s mission and goals will be the best fit, so be sure that your nonprofit conducts a thorough search before hiring. Aly Sterling Philanthropy’s list of top nonprofit fundraising consultants is a great place to begin your search.

Diversifying your funds.

Relying solely on single-source revenue streams is not a fiscally-solvent fundraising strategy. This common-sense statement is surprisingly easy to forget once you’ve been backed into a corner and feel overly-dependent on grant funding!

An organization that has the capacity to acquire a thousand $100 donations is in a much more sustainable position to grow than an organization whose primary source of funding is a single $100,000 grant.

In order to attain those thousand individual donations and improve the diversification of your funds, your organization must deepen your donor relationships and build a broader, more engaged base of community support.

Building more community support.

To start building stronger community support, ensure that your donor communication tactics, online fundraising outlets and engagement metrics are exceeding your expectations. Consider whether improving your strategy for the following would result in stronger constituent engagement:

• Email marketing
• Social media outreach
• Types of fundraising
• Donor data

Now might be a good time to evaluate whether or not your CRM is pulling its weight. Check out this donor database buyer’s guide from Bloomerang for ways to get started. A fine-tuned database platform can really improve your ability to measure success and identify opportunities for improvement.

While prioritizing community support is certainly integral to increasing your fundraising capacity in sustainable ways, don’t neglect developing strategies for engaging with another crucial audience — philanthropic foundations and institutions.

Prioritize Foundation Funders

How can your organization encourage the success of your fundraising grants program? By prioritizing those who fund your grants!

While your organization may be doing exceptional work and be well-aligned with the goals of the grantmaking body, you can never be guaranteed a grant. There are plenty of nonprofits that do incredible work, so how can you make yours stand out from the crowd?

• Cultivate confidence in the grant officer. Ensure that your organization develops solid relationships with grantors whenever possible. Capitalize on every opportunity you have to form relationships with grantmakers, including inviting your organization’s board members to any meetings with them. Grantmakers’ decisions often come down to individuals, not necessarily to organizations, so having one or two board members there to strengthen your case can prove valuable.
• Conduct foundation research. The grant application process takes time to complete — a lot of time — so ensure that your organization is researching foundations prior to devoting  more of your time to a proposal. Look for organizations that align with your own mission and will likely be more inclined to be interested in your nonprofit’s programming.
• Compel your audience with a great story. Write your proposal to include compelling storytelling components that leave a memorable impact on readers. Your goal is to inspire your audience to want to fund your organization and help you achieve your mission with stories of hope, perseverance and commitment. Be sure to also include statistics, projections and other factual elements for a comprehensive approach. 
• Continue to persist. Persistence is key when it comes to grants. Don’t look at a declination as a form of discouragement, look at it as an opportunity to grow. Call the foundation and speak to the grant officer who reviewed your proposal. Thank them for their mindful review and see if they can offer any advice to make your next grant proposal a success.

It is undoubtedly difficult to find the time for grants, especially if your team doesn’t include a  dedicated grant writer or development officer. However, as the overarching trend toward equity through fostering sustainability continues, it’s still vitally important that your organization cultivates connections with funders whenever possible.

Strategize Your Grants

Whether you are looking to apply for a major grant, a smaller package of support for a specific project or even a Google Ad grant, your organization must develop a strategy. And while strategizing for grants may seem difficult, there are a few top techniques to simplify the process.

Finding a fitting grantmaking body.

Grants can be acquired through private corporations, foundations or government organizations, so choosing the right avenue is important prior to committing to the application process. You need to find a funder that will fit all of your nonprofit’s needs.

Moreover, you need to find a funder that will also find your nonprofit to be a fitting recipient of support. Understanding the specifications of what the funder is seeking in terms of a grantee is crucial to accurately determining your likelihood of receiving grant funds and moving forward with the application.

This is a symbiotic relationship, so the grantor is looking for the applicant who fulfills all of their needs and who would most benefit from their grant.

Using the best tools available.

This may seem like an obvious one, but it’s important that your organization is running as smoothly and as efficiently as it can. Implementing technology solutions can mitigate many potential headaches, disasters or disappointments that your organization might face.

Here’s a very accessible example. If your organization is looking to apply for a Google Ad grant, it may already be further along than you might think. The process for applying for a Google Grant can be completed in four steps:

1. Set up a TechSoup.org account to receive a token verifying to Google that your organization is a 501(c)(3).
2. Enroll in the Google for Nonprofits program with the token from TechSoup, and then create a new Google Ad Grant account.
3. Install Google Analytics in order to access your Google Ad Grant account.
4. Apply for a Google Ad Grant by submitting an eligible AdWords campaign for approval.

While all the different tech monikers may be confusing, the process itself is straightforward and easy to begin. In fact, 52% of nonprofits forgot that they already had a Google for Nonprofits account!

However, with the right tech infrastructure and knowledge in place, the entire process of receiving a Google Ad Grant can be completed in under a month. The result will be a reliable stream of $10,000 (per month!) of grant money for online advertising. To optimize your software and make the most of Google Ad Grants, learn more with these essential strategies.

As grantmakers are looking to revise the rules of the grantmaking game, take the time to optimize your organization to make the most of new opportunities as they come.

Understanding the ins and outs of emerging grantmaking trends will be essential, so keep researching and exploring!