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Getting Startup Grants for a Nonprofit

Guide to Nonprofit Startup Grants
Lauren Ward
Lauren WardUpdated February 3, 2023
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Building a nonprofit organization from the ground up takes time, hard work, and dedication. It also typically takes money, which may be hard to come by if you don’t yet have a track record of successful programs under your belt. The good news is there are grants available that can help a newly formed nonprofit organization get up and running. Finding — and getting — a startup nonprofit grant isn’t always easy, though. Here’s what you need to know.

Why Are Grants Important for Nonprofit Startups?

For nonprofits at any stage, grants often serve as a significant and reliable source of income. If you’re launching a new nonprofit, a startup grant can give the funds you need to rent office space, hire employees, initiate programs, and spread the word about your organization and mission through marketing. You can think of a startup grant as akin to the seed funding a for-profit business startup might get from an angel investor or venture capitalist. In this case, however, the funding comes from grant-giving foundations, government agencies, and corporations. 

4 Steps to Getting Nonprofit Grant Funding

If you’re looking for a grant to help fund a new nonprofit, here are four steps to follow.

1. Get Your Documentation Together

Grantmakers want to be sure that their money is going to a good purpose. So you’ll want to offer as much evidence as you can that your organization can and will do what it says it will. It’s a good idea to gather (or prepare) documentation that shows:
  • Your legal status
  • Your mission, goals, and objectives
  • Your target population and their needs
  • Background information on your board members, staff, and volunteers
  • Major accomplishments to date (if any)
  • Fundraising plans
  • A budget showing how you plan to use the grant funds

2. Finding the Right Grants

You can find grant opportunities using online databases and government resources (for more on that, see below). Also, consider tapping your network — ask your board, staff, and volunteers if they have any connections with grantmakers who might consider funding your organization. It can also be helpful to research existing nonprofits that are similar to yours to see where they get their funding.To come up with a list of viable grant options for your startup nonprofit, you’ll want to consider:
  • Does this grantmaker generally fund nonprofits like yours?
  • Do you meet the grantmaker’s geographical restrictions?
  • Does the grantmaker typically fund startups or only well-established nonprofits?
  • Does the grantmaker typically offer funding for the kind of project or operational expenses you need funding for?
  • Do the grantmaker’s interests and mission mesh well with yours?

3. Follow Guidelines and Apply 

Grant applications typically take a substantial amount of time and effort, so before you start an application, it’s a good idea to carefully review the qualification criteria. It won’t take much time to re-read the grant’s eligibility requirements, and it could potentially save you hours and hours of work if you discover a reason why your nonprofit might not qualify. Also, be sure to follow the application directions to the letter. Otherwise, your application might get automatically rejected.

4. Listen to Feedback

If your application is denied for any reason, and you receive feedback, it’s a good idea to carefully read through it. You may be able to glean useful information that you can use when applying for other grants or for a grant from that organization in the future. You may also consider soliciting the feedback of a grant specialist if you’re not sure why your application was denied. 

Nonprofit Grant Sources

Here are some potential sources of nonprofit startup grants.

Federal Grants

There are a number of agencies funded by the federal government that offer grants to nonprofits, from startups to fully established organizations. These grants might be targeted to certain programs or available to help cover operational expenses. A good place to start your search for federal grants is Grants.gov.

State and Local Grants

State and local governments also offer grants for nonprofits. You can often find information about these grants through state, city, and town websites. To further suss out municipal and local grants, consider reaching out to local councils and commissions; they may be able to connect you with someone who has direct knowledge about grants in your area. 

Corporations

Many corporations offer financial support to nonprofits. Sometimes they readily advertise their nonprofit startup grants, and sometimes they don’t. Therefore, even if a corporation doesn’t state that it partners with nonprofits, that doesn’t mean they don’t or wouldn’t be willing to. It might be worthwhile to set up meetings to pitch your nonprofit’s mission and needs to nearby corporations you think might be sympathetic to your cause. 

Private Foundations 

Many privately funded foundations offer grants to nonprofits. In fact, many are formed exactly for that purpose. To find a foundation that might be willing to offer startup funding to your organization, you might want to start local. With a little research, you may be able to find grant-giving foundations located in your area. To expand your search, consider using a database like Candid.org.Recommended: Small Business Grants: Free Money for Your Business 

Other Ways for Nonprofits to Receive Funding

Grants are only one potential source of nonprofit funding. As a nonprofit founder, you’ll, ideally, want to have several funding strategies. The more diverse your revenue streams, generally, the more likely your nonprofit is to succeed. Here are some other options to consider.

Crowdfunding

There are many different types of crowdfunding, but the one most used by nonprofits is donation-based crowdfunding. This works by asking large amounts of people to donate small amounts of money, typically via an online crowdfunding platform. You can launch a crowdfunding campaign to raise startup funds for your nonprofit or to fund a specific program within your organization.

Fundraising

Many nonprofits raise significant funds through donations, so if you don’t have one already, you’ll want to create an online donation page. Some ways to encourage donations include: promoting your organization and cause on social media, asking for donations at community events, and hosting charity events (such as a walk-a-thon, gala dinner, concert, or auction).

Loans

While you might associate loans strictly with for-profit businesses, nonprofits can sometimes qualify for different small business loans. If you have strong personal credit and your startup nonprofit is already generating revenue, it may be worth applying for a loan through your local bank or credit union (if they lend to nonprofits).You might also want to look into online business loans. Online (also known as alternative) lenders tend to have more relaxed requirements and are typically faster to fund. However, these loans often come with higher interest rates.Recommended: Apply for & Getting Small Business Loans   

Small Business Loans

If you’re looking to start or expand a nonprofit organization, keep in mind that you may be able to qualify for a nonprofit business loan. Since it can take some time and effort to find the right lender, consider using an online loan search tool. With Lantern by Sofi’s online lending platform, for example, you can quickly get access to multiple loan options matched to your organization’s needs and qualifications with just one application.

Frequently Asked Questions

Can nonprofits be startups?
How do you start a nonprofit with no money?
How do nonprofits get seed funding?
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About the Author

Lauren Ward

Lauren Ward

Lauren Ward is a personal finance expert with nearly a decade of experience writing online content. Her work has appeared on websites such as MSN, Time, and Bankrate. Lauren writes on a variety of personal finance topics for SoFi, including credit and banking.
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