How to Get Grants & Sponsorships for Nonprofit Organizations

Nonprofits use grants and sponsorships to remain operational.

A grant is financial assistance given to nonprofits by grantors who do not expect any monetary benefit in return. Sponsorships are commercial agreements between the nonprofit and sponsor, where the nonprofit provides a benefit (i.e. promotion, advertising) to the sponsor for the financial assistance that was given. Many individuals actively engage in fund-raising for their nonprofit organizations. Nonprofits depend upon funding from individual donors, federal grants, and corporate sponsorships to operate and fulfill the nonprofit organization's missions. Applying for and receiving grants and seeking sponsorships require nonprofit organizations to follow specific rules and instructions given by the organizations that are supplying the funding. Submitting proposals for grants and sponsorships is a lengthy process, but knowing what information funding organizations expect from you will give your nonprofit the best chance to receive funding.

Things You'll Need

• Nonprofit budget
• Copies of 501(c)(3) determination letter

Instructions

Getting Grants

1. Review your budget to look at fund-raising needs. Your budget should list the funds that you already have in place, and how much money you will need to carry out the mission of your nonprofit. Gather your IRS 990 forms from the past three years. Calculate the total amount of funding that is needed.

2. Gather a list of potential grant sources. Search the United States grant database and the Foundation Center grant database to find organizations that give grants to the type of nonprofit you operate. Grants are given by the federal, state, and local governments and private donors.

3. Visit the website of each potential organization that gives grants to get the specific requirements for submitting a grant proposal. Each organization may require different information, and not including required information in your grant proposal may disqualify your nonprofit organization from receiving funding. Insure that the grant you are seeking is a good match for your organization, and that your nonprofit is a good match for the grantor. Your nonprofit should meet the requirements and needs that are important to the grantor

4. Develop a grant proposal for your nonprofit. Your grant proposal should have a strong cover letter that introduces your nonprofit organization and fully explains your mission. Include in your grant proposal an executive summary, statement of need, your goals and objectives, program design, evaluation, project sustainability, information about your organization, and your budget.

5. Apply for grants that are available to your nonprofit. Send your grant proposal and any other required information to organizations offering grants that your nonprofit qualifies for. The process and time to receive grant funding varies per organization.

Getting Sponsorship

1. Search for sponsors in your community. Look for businesses in your community that share your vision and would like to financially stand behind your organization. For example, organizations that teach computer skills to needy individuals should seek sponsorship from computer and electronics stores, while a group feeding the hungry should contact grocery stores. Sponsors receive the benefit of free publicity when they give funding to worthy nonprofit organizations. This is known as "cause-related marketing."

2. Create sponsorship levels. Sponsorship levels allow sponsors to receive certain incentives based on the amount of funds they contributed to your nonprofit. Include sponsorship levels in your pitch. For example, a platinum sponsorship level could offer placement of the sponsor's logo on your website, provide advertisement in your newsletters, place five of the sponsor's items in your gift bags, and give 10 complimentary passes to your event. A gold sponsorship level could offer placement of the sponsor's logo on your website, provide advertisement in your newsletters, place three of the sponsor's items in your gift bags, and give six complimentary passes to your event.

3. Create a fund-raising pitch for your nonprofit to present to sponsors. Outline the mission of your nonprofit in your pitch. Inform potential sponsors of your exact purpose for the funds.

4. Send thank-you letters to all potential sponsors with whom you met. A thank you letter will display a level of professionalism that will go a long way towards your goal of receiving sponsorship.

Tips & Warnings

• In most cases, nonprofits are required to have 501(c)(3) status to receive grants and sponsorship. Prepare copies of your IRS determination letters to prove your tax-exempt status.

• Follow the grant guidelines exactly how they are listed by the giving organization. Individuals and organizations look for specific information when deciding which nonprofits to choose.

• Make sure that you provide accurate information on your grant proposal, and that you are honest about your purpose for the funding. Neglecting to do so will compromise your credibility as a nonprofit organization.

References

• Free Management Library; All About Nonprofit
• Foundation Center: How can I find corporate sponsorship?

Resources

• US Government Made Easy; USA.gov for Nonprofits
• Grants.Gov; Find Grant Opportunities
• Foundation Center; Identifying Funding Sources: Foundation Directory Online