In this short video, GlobalGiving’s Senior Business Partnerships Manager Nicole Morrissey explains how grants differ from donations.
Q: What is special about a grant?
A: Typically, a grant is tied to a specific project or activity. Grants usually have a budget and timeline that are outlined in a signed grant agreement. A grant agreement may require reporting throughout the grant period and/or at the conclusion of the project or activity.
Q: How do grants differ from donations?
A: Grants differ from donations in that donations tend to be much more general and flexible than grants. A donation can be used to support a nonprofit’s programs, services, or operating expenses. It is less common for a donation to have restrictions as to how the funds can be used. You can often learn about how a nonprofit uses its donations in ongoing donor communications or in an annual report made available to all donors.
Q: What do grants and donations have in common?
A: Both are tax deductible and can be made by either individuals or corporate funders. And both can be used to support meaningful causes.
Q: Why do some companies make grants while others make donations?
A: The decision to make a grant rather than a donation depends on many factors. When done well, a grant encourages more collaboration between the funder and the recipient organization. A grant gives some control to the funder as to how funds are used and sets conditions for future funding.
Q. How do I get started with making grants?
A. We recommend partnering with an experienced grantmaking intermediary. Intermediaries can support your grantmaking in numerous ways including helping you follow best practices and stay compliant, scale your grantmaking with efficiency, measure your impact, build relationships with the community, and give in more places around the world. Some companies and foundations have open Requests for Proposals where they invite any eligible nonprofit organization to apply for grants. Others have specific organizations in mind, and may reach out to propose a project or activity. A good grantmaking intermediary can suggest organizations that are doing impactful work in the region or cause area you’d like to fund, and provide vetting services.
Is your company interested in making a grant to a nonprofit? GlobalGiving can help.
Featured Photo: Give a Vietnamese Child a Helmet; Save a Life by Ford grantee AIP Foundation