Grants for Non-Profits

Nonprofit grants play an important role in enabling nonprofit organizations to fulfill their missions. Grants for nonprofits are categorized as either restricted, unrestricted, or in-kind. Grants comprise 11 percent to 30 percent of a nonprofit's revenues because the Internal Revenue Service (IRS) gives tax write-offs to those who donate to 501(c)(3) status nonprofits.

Definition

Nonprofit grants are forms of funding that don't require repayment. They can come from organizations or individuals and are given for charitable purposes. Nonprofit grants differ from investment capital. For businesses, investment capital is provided to enable you to make more money in the future. For nonprofits, money is provided to help you fulfill the social mission and objectives of the organization.

Significance

The nonprofit sector has grown exponentially from the 1980s through 2009. Rather than solely relying on the business or government sectors to solve societal problems, nonprofit organizations play an important role in addressing global poverty, education, hunger, human rights and more. Nonprofit organizations collectively improve the lives of millions of people, and therefore require financial support to be able to continue to serve those in need.

Restricted Grants

Restricted grants must be spent in the exact way the grant proposal describes. Restricted grants fund endowments like the money the Gates Foundation received from Warren Buffet in three installments during 2006 to 2008. The money could not be used for any purpose outside of the very specific arrangements Buffet outlined. Scholarship money is another kind of restricted grant. An example is the Catherine B. Reynolds Scholarship in Social Entrepreneurship, which provides tuition assistance to up to 10 undergraduate students at New York University. Reynolds scholars do not get the money; it is paid directly to the university. Grants can also be given to pay for one program, such as the $75,000 that Altman Foundation of New Jersey provided to fund Jazz at Lincoln Center in 2005.

Unrestricted Grants

Unrestricted grants can be used by nonprofits for any purpose. Nonprofit organizations collect general fund donations from individuals and foundations to continue to exist. An example of an unrestricted grant is the $1,000 that Youth Venture Foundation gave to Baby's First Home, a nonprofit that serves teenage mothers in New York City. Matching gifts can be restricted or unrestricted. They come through challenges to individuals who donate to nonprofit organizations. A foundation will provide a specified amount of matching grant money to an organization that has received a certain amount of money from other sources. Many employers participate in matching gift programs by donating equal amounts of money to nonprofits that their employees support.

In-Kind Grants

An in-kind grant is one that enables a nonprofit to receive equipment, supplies, tools or other materials other than money. Room to Read is an example of a nonprofit that utilizes in-kind grants. The organization receives free books, software and services that enable children in developing countries to learn and practice reading skills. You can find in-kind grants through the Foundation Center (see Resources below).

References

• Bill & Melinda Gates Foundation
• Government Grants
• Room to Read

Resources

• The Foundation Center