Foundation Grants (Goal: 2-5% of Revenue)

While many websites and YouTube videos explain the only requirement to receive grant funding is 501c3 status, the truth is that grants are much more challenging to acquire. Nonprofits should not rush into foundation grant applications until they have a proven track record. There is one notable exception. Some foundations provide seed money grants to new nonprofits, though these are typically around $1,000 or less.

Most grant foundations or the federal, state, and local governments want to see proof of an effective operation. They will often look for an active and updated website, request verifiable success stories, and audited financial records covering multiple years. Foundations also require organizations to have diverse and established fundraising not reliant on grant funding. Without these things, most grant foundations will not consider the organization’s application, which can take hours to prepare.