What Are the Different Types of Grants for Nonprofits? 

The Different Types Of Grants Available For Nonprofits

Nonprofit grants can be categorized in three main ways: by funding source, by what the grant pays for and by how the funding can be used. 

That is why you see terms like foundation grants, government grants, operating grants, capital grants, restricted grants and unrestricted grants all used when discussing different types of nonprofit funding. 

They describe different characteristics of a grant. And understanding those differences can make your funding search considerably more focused. 

If your nonprofit needs money for salaries, for example, you may be looking for general operating support. If you are renovating a facility, you may need a capital grant. If you are launching a specific new service, program funding may be more appropriate. 

Knowing what you need makes it much easier to start looking in the right places.  

If you are looking for information about grants for the first time – you should definitely check our complete guide on what is grant funding. In this article, we take a closer look at the different types of grants that exist for nonprofits and charities. 

What Types of Grants for Nonprofits Exist? 

The most popular types of grants for nonprofits are: 

• Program or project grants
• General operating support grants 
• Capital grants 
• Capacity-building grants 
• Technology and equipment grants 
• Research grants 
• Seed or startup grants 
• Matching and challenge grants 
• Emergency grants 
• Restricted grants 
• Unrestricted grants 
• Multi-year and continuation grants 

There are other classification criteria for grants as well – for instance, nonprofit grants can be classified by the funding sources. These grants can be from the following funders: private foundations, family foundations, community foundations, corporations and government grants. 

A single grant may belong to several of these categories at once. 

For example, a private family foundation can grant your nonprofit a restricted one-year program grant for expanding youth literacy initiatives. At the same time, another foundation may provide an unrestricted multi-year general operating grant that can be used on several different things. 

That is why it is important to know these types of grants when you start grant research. 

Grant Types by the Purpose of Funding 

The easiest way to classify grant types is the funding purpose. 

1. Program and Project Grants 

Program grants, which are sometimes called project grants, provide funding for a certain program, project or initiative of a nonprofit. 

Thus, the organization can receive program grants for the following activities: 

• Launching an after-school tutoring program 
• Expanding a food security initiative 
• Providing mental health services 
• Running an animal rescue program 
• Offering employment training 
• Running an arts or cultural project 
• Launching a research initiative 

These grants usually have a certain purpose, and a nonprofit has to show the budget, expected results, time period and population served. 

Say a foundation provides your nonprofit with $50,000 for running a summer youth employment program – you cannot spend it on building renovation six months later. The grant conditions restrict the usage of the funding. 

Best for: Nonprofits with a clearly defined program, project, population and funding need. 

Before applying: Check if the funder has supported similar projects earlier. Historical data of a funder can tell you whether your project is aligned with the interests of the funder. 

Check our guide on how to qualify foundations for nonprofit grants to understand the research you should conduct before application. 

2. General Operating Support Grants 

If the program grants fund a particular initiative, then the general operating support grants provide funding for the organization itself. 

You may hear these grants being called: 

• Operating grants for nonprofits 
• Operational grants for nonprofits 
• General operating grants 
• Core support grants 
• General support funding 
• General operating support helps to cover costs like: 
• Salaries of staff 
• Rent 
• Utilities 
• Insurance 
• Administrative expenses 
• Communication 
• Technology 
• Funding infrastructure 
• Financial management 
• And any other costs of daily activities. 

The Council on Foundations distinguishes the general support from project-specific funding, and grant agreements can specifically designate funding for the overall work and mission of an organization and not a particular project. Check out more information about general operating support at the Council on Foundations. 

For nonprofits, this flexibility is extremely valuable. Programs do not work independently of each other, and staff need to be paid. Buildings need heating. Software subscriptions need renewal. Financial reports have to be created. 

These expenses may not sound as attractive as launching a new initiative; however, the organization cannot implement its mission without them. 

Best for: Organizations seeking support for operating rather than for a single defined project. 

Research tip: Check the historical grants of a funder to find such terms as general support, general operating support, operating support or unrestricted support. Wording of grant purposes can help you identify if the funder has provided this type of support earlier. 

3. Capital Grants 

Capital grants for nonprofits fund the big physical assets, facilities or improvements. 

This funding can be used for: 

• Building construction 
• Facility renovations 
• Property acquisition 
• Accessibility upgrades 
• Purchasing of major equipment 
• Vehicles 
• Structural improvements 
• Existing facility expansion 

For example, if an animal shelter needs $300,000 to renovate their veterinary clinic – that request differs greatly from a request for $30,000 to run an adoption program. 

Some funders regularly provide funds for programs and may not have any interest in capital projects while some other foundations may prefer building, equipment or infrastructure support. 

That is why the types of funding a foundation provided in the past can be as important as the causes they support. 

Best for: Nonprofits with a clearly defined need for the facility, property, construction or major equipment. 

Before applying: Research whether the funder has provided capital grants earlier, whether the funder requires matching funds and whether the size of typical grants of a funder allows making your request realistic. 

4. Capacity-Building Grants 

Capacity-building grants help an organization to become stronger, more efficient and better equipped to carry out its mission. 

Instead of funding service delivery directly, capacity-building funding can be used for improving: 

• Strategic planning 
• Staff training 
• Leadership development 
• Board development 
• Evaluation systems 
• Financial systems 
• Fundraising infrastructure 
• Communication 
• Data management 
• Technology upgrades 
• Organizational restructuring 
• Succession planning 

Think about the small nonprofit that has doubled the number of served people during the last three years. 

The programs of that nonprofit may be flourishing but what if the infrastructure of that organization still operates using spreadsheets, outdated technologies and a small staff? 

In this situation, the capacity-building grant can solve the infrastructure problem and not fund another round of programs. 

Best for: Nonprofits which need to improve their internal systems, leadership, infrastructure or organizational efficiency. 

Capacity-building is a good search term to use if your need does not correspond to any traditional program grant. 

5. Technology Grants for Nonprofits 

Technology grants for nonprofits are another type of grants people actively search for and this type of grant may overlap with capital, capacity-building or program grants depending on the funder. 

Technology funding can cover: 

• Computers and hardware 
• Software 
• Cybersecurity 
• Cloud services 
• Data management 
• CRM systems 
• Websites 
• Digital accessibility 
• Communication technology 
• And any other technology funding you may need. 

Technology assistance does not always come in the form of cash. Some companies donate their products, services, or discounts to eligible nonprofits. For example, Microsoft currently offers technology grants and discounts to nonprofits through its nonprofit program. Check out the Microsoft nonprofit technology program. 

Best for: Nonprofits with a clearly defined need for technology and a plan on how this technology will improve operations or program delivery. 

When searching for private foundations, do not assume that the grant needs to be labelled as a “technology grant”. You should review historical grant descriptions to find equipment, infrastructure, capacity building, digital transformation, and related terms. 

6. Equipment Grants for Nonprofits 

The equipment grants cover the physical items which are necessary for carrying out the work of an organization. 

Depending on a nonprofit, the list of equipment can include: 

• Medical equipment 
• Kitchen equipment 
• Computers 
• Tools 
• Classroom equipment 
• Accessibility equipment 
• Recreation equipment 
• Vehicles 
• And any specialized program supplies. 

Equipment funding may be granted as a standalone grant, as a part of capital grant or within the bigger program request. 

Best for: Organizations with a clearly defined need for the equipment and a clear connection between its purchase and impact of a nonprofit. 

A vague request for “equipment” is not as useful as explaining exactly what you need, why you need it, who will use it and what will happen when you obtain it. 

7. Research Grants 

Research grants are meant to fund research, studies, testing, evaluation or the development of new knowledge. 

Research grants are common with universities and research institutions, but there may be occasions where research grants are relevant to nonprofits working within the following industries:

• Healthcare 
• Public policy 
• Environmental conservation 
• Education 
• Social services 
• Community development 
• Science 
• Public health 

Research grants may come from governments, foundations and specialized grant making organizations. 

The Canada Institute of Health Research, for instance, distinguishes several types of research grants, which include project, operating, team, catalyst and planning grants. Click here for a CIHR description of research grants 

Best for: Organizations conducting research with specific questions and methodology. 

8. Seed Grants and Pilot Project Grants 

A seed grant is an early grant that will help you develop, test and launch an idea. 

Also, you may come across the following terms in relation to these grants: 

• Pilot grant 
• Startup grant 
• Innovation grant 
• Catalyst grant 
• Planning grant 

This type of grant will enable an organization to test an idea prior to moving ahead with a larger project: 

Does this idea work? 

A nonprofit organization may want to try out a new employment program that targets 30 people before launching the project throughout the entire region. 

The seed funding may cover the initial pilot phase of the project, evaluation and improvement. 

Best for: Early stage projects, experimental projects and organizations testing a model before expanding. 

When applying for seed funding, be ready to explain not only the results that you expect to achieve but also what you expect to learn. 

9. Emergency Grants 

Emergency grants for nonprofits are designed to provide funding in case of emergency situations. 

This includes the following situations: 

• Natural disaster 
• Damaged facilities 
• Unprecedented demand for services 
• Public health emergency 
• Unexpected organizational crisis 
• Unexpected community need 

Emergency grants tend to differ from the regular funding process due to the time element. 

Best for: Urgent and unexpected needs that cannot wait until the regular grant process is complete. 

Emergency grants should not be confused with general operating funding. An ongoing budget problem is not the same as a particular situation that created an urgent need for funds. 

Restricted vs. Unrestricted Grants 

Another key category in which nonprofit grants are divided is the level of control the nonprofit organization will have over the use of the funds. 

What Is a Restricted Grant? 

A restricted grant must be spent in accordance with the agreement made with the funder. 

For example, if a foundation provides a grant of $25,000 specifically to be used for the literacy program, then these funds are restricted according to the grant agreement. 

Restrictions may relate to the following aspects: 

• A certain project 
• A certain program 
• Certain population 
• Equipment 
• Personnel related to the program 
• Certain geographic area 
• Certain time period 

Specific restrictions depend on the particular grant agreement. 

What Is an Unrestricted Grant? 

An unrestricted grant gives the nonprofit organization a certain flexibility as for how to use the grant. 

Also, you may see the term flexible funding. 

Depending on the agreement, unrestricted grants will enable nonprofits to cover various expenses, and not necessarily the expenses of one predetermined project. 

That is why many searches for unrestricted grants for nonprofits or general operating grants will return the same results. 

The key point, however, is to always check the grant agreement. Do not just assume that it is unrestricted just because the funding was called operating support on the website. 

What Are Matching Grants? 

A matching grant requires the organization to obtain a certain amount of funding from other sources to get the grant. 

For example: 

The foundation offers a nonprofit a $50,000 matching grant with a 1:1 match ratio. 

The nonprofit may need to raise another $50,000 from eligible sources. 

Matching requirements differ greatly. Depending on the funder, a matching grant may cover cash, certain in-kind contribution or other eligible sources, depending on the terms of the agreement. 

Some government grants may also have a matching or cost sharing component. Make sure you check carefully before applying to such an opportunity. Grants.gov will include all necessary details regarding matching and cost sharing. 

Best for: Organizations that are capable of raising other necessary funds to meet the match. 

It would be a mistake to consider the matching as an unimportant technical requirement. Always clarify exactly what counts for the matching, when it should be obtained, and what proof you will need to provide. 

What Are Challenge Grants? 

A challenge grant will motivate the nonprofit organization to achieve a certain fundraising goal by offering the grant as an incentive. 

For example, a foundation commits to provide $100,000 if the organization raises another $100,000 from other sources. 

Challenge and matching grants are often used interchangeably; however, individual grant programs may be quite different. Always refer to the specific requirements set by the funder. 

For nonprofits, a challenge grant may bring more benefits than only the funding from the foundation. The grant will help create momentum for the fundraising campaign. 

What Are Multi-Year Grants? 

A multi-year grant is a grant that is intended to last for more than one year. 

For example, the foundation may offer a multi-year grant of: 

$150,000 over 3 years – $50,000 per year. 

Multi-year funding may be used for programs, capacity building, operating costs, and anything else, as long as it is in accordance with the terms of the funder. 

The obvious benefit of the multi-year grant is predictability. Instead of starting from zero every year, the organization already has some future funding guaranteed. 

At the same time, multi-year awards may also have such elements as: 

• Annual reports 
• Milestones to be reached 
• Budget updates 
• Continuing eligibility 
• Requirements for renewal 

Make sure that you read carefully the terms of the grant agreement to see whether future installments are guaranteed or conditional. 

What Are Continuation Grants? 

A continuation grant provides the additional funds to continue the work started and funded earlier. 

In the terminology of federal funding, continuation is one of the opportunity types that may be used for grant programs. Grants.gov distinguishes continuation opportunities from discretionary and mandatory grant opportunities, for example. Click here to see the Grant Opportunities Categories on Grants.gov 

Continuation funding does not automatically mean that every existing grant recipient receives another grant. This is determined individually by each grant program. 

Types of Grants Based on Who Provides the Funding 

So far, we have been considering different types of grants based on what the grant supports and how it works. 

However, nonprofits also use different types of grants based on who provides the funding. 

The main sources of grants for nonprofits are the following: 

Private Foundation Grants 

Private foundation grants are offered by private foundations, which are usually funded by one or few sources, such as an individual, family or a corporation. 

The Council on Foundations says that private foundations are charitable organizations funded and governed by one or few sources and focused mostly on grantmaking. More on Private Foundations 

Private foundations may give: 

• Program grants 
• Operating support 
• Capital funding 
• Capacity building grants 
• Research grants 
• Equipment grants 
• Multi-year grants 

For U.S. nonprofits, private foundation grants are especially interesting since private foundations leave a trace of their giving history in public documents. 

According to the IRS, private foundations may provide grants to qualifying charitable organizations according to the tax laws. More information from the IRS on private foundation grants to organizations 

This means that you may research what the foundation has funded in the past, and not just rely on the mission statement or what you see on the website. 

If private foundations are in your strategy, begin with our guide on how to find foundations for grants. 

Family Foundation Grants 

A family foundation is a private foundation established, funded or governed by family members. 

They may support everything from local community programs to international charities. 

Some family foundations have their websites and formal application portals. 

Others do not. 

This makes the research on past grant recipients, grant purposes, geographic area and average grant size essential. 

The family foundation that has previously funded many similar organizations should be researched even if you cannot easily find an application on its website. 

Community Foundation Grants 

Community foundations are foundations that usually collect and manage funding from many donors and focus their funding activities on a certain geographic community. 

The grants from community foundations may cover: 

• Local programs 
• Community development 
• Arts and culture 
• Youth 
• Education 
• Healthcare 
• Social services 
• Capacity building 
• Operating support 

Since geography plays such an important role in community foundation funding, the eligibility criteria are often tied to the nonprofit geographic location or the service area. 

Corporate Grants 

Corporate grants for nonprofits are offered by corporations or corporate foundations. 

The funding may be related to: 

• Locations where the company operates 
• Workforce development 
• Education 
• Technology 
• Health 
• Environment 
• Interests of the employees 
• Community investment priorities 

Corporate funding may take different forms: grants, sponsorships, donated goods or in-kind assistance. 

Do not assume that the funding priorities of the philanthropy division of a company will correspond with the interests of its consumer brand. 

Government Grants 

Government grants for nonprofits may be offered by federal, state, provincial, territorial, municipal or local governments. 

Grants.gov separates federal programs from non-federal grant programs and provides a search feature for the federal opportunities. 

Federal programs may have different structures: discretionary grants, formula grants and continuation funding. The discretionary grants provide the government agency the ability to choose between applicants based on their applications and the requirements of the program, while formula grants distribute funding according to predefined statutory and regulatory formulas. 

Government programs in Canada may also distinguish between grants and contributions. According to the Employment and Social Development Canada, grants are normally based on predefined criteria for eligibility, while contributions may cover eligible expenses. More on grants and contributions 

Government grants may be very helpful for nonprofit organizations, but you need to be careful regarding the following issues: 

• Eligibility 
• Allowable expenses 
• Reporting requirements 
• Registration requirements 
• Deadlines 

The National Council of Nonprofits provides more information about government grants. 

Quick Comparison: Different Types of Grants for Nonprofits 

Type of Grant	What It Typically Funds	Best For
Program or Project Grants	A specific program, project or initiative	Nonprofits with a clearly defined program, population and funding need
General Operating Support Grants	Salaries, rent, utilities, administration and other operating costs	Organizations needing flexible support for ongoing operations
Capital Grants	Construction, renovations, property, facilities and major equipment	Nonprofits planning major physical improvements or purchases
Capacity-Building Grants	Staff training, strategic planning, leadership, systems and organizational infrastructure	Organizations strengthening their internal capacity
Technology Grants	Hardware, software, cybersecurity, CRM systems, websites and other technology	Nonprofits upgrading technology or digital infrastructure
Equipment Grants	Medical equipment, computers, vehicles, tools and specialized equipment	Organizations with a clearly defined equipment need
Research Grants	Research, studies, testing, evaluation and development of new knowledge	Organizations conducting structured research
Seed or Pilot Grants	Testing, developing or launching a new idea or program	Early-stage or experimental projects
Emergency Grants	Unexpected crises, disasters or urgent community needs	Organizations facing immediate and unforeseen funding needs
Restricted Grants	Specific programs, projects, populations, expenses or purposes	Nonprofits seeking funding for a defined use
Unrestricted Grants	A range of organizational expenses	Organizations needing flexibility in how funding is spent
Matching Grants	Funding provided when the nonprofit raises a required amount from other sources	Organizations able to secure additional matching funds
Challenge Grants	Funding tied to reaching a specific fundraising goal	Nonprofits running fundraising campaigns
Multi-Year Grants	Programs, operations or other needs funded over multiple years	Organizations looking for greater funding stability
Continuation Grants	Continued funding for previously supported work	Organizations seeking to continue an existing funded program

Which Type of Grant Is Best for Your Nonprofit? 

There is no perfect type of grant for any nonprofit organization. 

The key question is: 

What do we need to fund, and what funders have funded it before? 

Start with five questions: 

1. What exactly needs to be funded? 

Be specific. 

Do you need funding for a program? 

Personnel? 

Technology? 

Facilities renovation? 

Equipment? 

General operating expenses? 

The more specific you are about your funding need, the easier it will be for you to find the right grant. 

2. How much do you need? 

A $7,500 equipment grant and a $750,000 capital project are two different things. 

Check the typical amounts of grants before estimating how much money you should ask. 

3. Who has funded this kind of work before? 

Past grants are the most reliable data to find funders interested in your type of grant. 

Look at: 

Past grant recipients 

Grant purposes 

Geography of grants 

Average grant size 

Repeat funding 

Recent grants 

Grant Advance’s search engine for grants will allow you to research the past foundation grants and their giving patterns without searching advertised grant opportunities. 

4. Is the grant restricted? 

Know what the grant may and may not cover. 

Sometimes the grant may seem perfect, but it has restrictions incompatible with the expenses you have. 

5. Does the funder align with your organization? 

This is the step that nonprofit organizations cannot neglect. 

Even a $500,000 opportunity is not better than a $25,000 opportunity if this $500,000 funder never funded your cause, never funded organizations from your location and normally funds organizations that have nothing to do with yours. 

Research alignment first. 

Grant Advance’s foundation profiles may help you in evaluating the funding organization. 

How Do Nonprofits Find the Right Types of Grants? 

Start with the funding need, not the list of grant opportunities. 

If you need funding for technology, define the technology project and its cost. 

If you need funding for operating expenses, look for funders who gave grants to operating and unrestricted expenses. 

If you need a capital grant, find the foundations that funded the construction projects, renovations, facilities and equipment. 

Next, narrow down the list based on: 

• Alignment with the cause 
• Alignment with the geographic location 
• Past grant recipients 
• Average grant size 
• Type of support 
• Recent grants 
• Eligibility 
• Application process 

This will provide you a stronger list of prospects than applying to all opportunities that contain the word “nonprofit”. 

Our guide on finding better-aligned funders will show you how to use the funder’s giving history to prioritize grant opportunities. 

Once you find an aligned foundation, the next step may be either an application, proposal or Letter of Inquiry. If a Letter of Inquiry is required, read our step-by-step guide on how to write a Letter of Inquiry for grant funding. 

The Right Grant Starts With the Right Funding Need 

Knowing the different types of grants for nonprofits makes searching for funding much easier. 

Instead of opening a grant database and typing a broad phrase like “grants for nonprofits,” start with what you actually need. 

Maybe it is a program grant. 

Maybe it is operating support. 

Maybe your organization needs new technology, a larger facility or help strengthening its internal capacity. 

Once that need is clear, you can begin looking for funders whose actual giving history shows that they support that kind of work. 

If you are still learning the basics, continue with our guide to what grant funding is, how grants work and where nonprofit funding comes from. 

And when you are ready to start researching private foundations, book a free consultation with Grant Advance. We can show you how to research foundation giving history, identify better-aligned prospects and build a more focused foundation funding strategy. 

Frequently Asked Questions About Types of Grants for Nonprofits