Types of grants for nonprofits

1. Government (federal, state, and local) grants

   Public funding from agencies at the federal, state, county, or city level. Federal grants are listed on Grants.gov and can carry detailed reporting and compliance rules. State and local grants are tied to one state, county or city, or to a local issue.

2. Foundation grants

   Money from private foundations set up specifically to give money away. They publish focus areas and give to matching causes, and may ask for a letter of inquiry before a full application.

3. Corporate grants

   Grants from a company or its corporate foundation, through a giving or community-relations program. They may favor issues near the company's offices or industry, sometimes bundled with employee matching.

4. Community foundation grants

   Grants from a public foundation that pools donations to fund needs in one geographic area. Because they focus locally, they're one of the more approachable sources for a small, place-based nonprofit.

5. Unrestricted and general operating grants

   Money with no limits from the donor, so it can pay rent, salaries, utilities or insurance. Learn who gives unrestricted grants and how to ask for them.

6. Program or project grants

   Restricted funding tied to one specific program or initiative. You can only spend it on the work described in the proposal, and you'll report on how that effort performed.

7. Capacity-building grants

   Funding to make your organization stronger over time rather than deliver a service today: staff training, technology, strategic planning, or a key hire.

8. Capital grants

   Larger grants for physical assets and one-time investments: buying or renovating a building, major equipment, or construction. They may be paid in stages tied to milestones.

9. Matching or challenge grants

   A pledge to give only if you raise a set amount from other sources, sometimes dollar-for-dollar. Used to motivate other donors, since a matched gift feels like it goes further.

10. In-kind grants

    Support given as goods or services instead of cash: donated tools and technology, office space, or professional services. It doesn't hit your bank account, but it lowers costs.

Which grants can pay nonprofit employees?

Unrestricted operating grants can pay any salary. Program grants can pay the staff who deliver that program, as a line item in the grant budget, sometimes with a share of admin time as indirect cost. Capacity-building grants sometimes fund a specific hire for a year or two. Federal grants pay salaries too, but only with time records that show the work was actually done (see 2 CFR 200.430). What no grant will do is pay staff for work outside its own scope, so read the budget rules before you count on it.