Not all grants work the same way, and they’re often a misunderstood source of revenue. However they certainly do not have to be. If you don’t understand the difference between grant types, you risk wasting time by chasing funding that doesn’t fit your organization.

While grant money is free, most grants come with strings attached.

Here’s a quick breakdown of grant types and what they mean for your organization:

General Operating (aka “GO grants”):

• • Sometimes referred to as “unicorn grants” (as Arula likes to call them) since they’re both difficult to find and highly competitive when you do.
  • Offer flexible funding that supports an organization’s operating expenses.
  • Highly flexible and can be used for:
    • Paying staff, utilities, or just about anything that supports an organization’s mission.
  • Often requires a year-end report demonstrating how the funds were used.

Program or Project:

• • The most popular and common type of grant.
  • Funds a specific program or initiative (e.g., after-school youth programs or setting up a community garden).
  • Clear guidelines, strict spending, and detailed reporting.
    • Detailed reporting likely to consist of mid and/or year-end reports detailing whether goals were achieved, receipts, etc.

Capital:

• • Generally awarded for large equipment or brick and mortar projects (e.g., if an organization is building a new facility or ADA-accessible ramp).
  • Highly competitive.
  • Often requires strong relationships and proof of readiness.
  • Almost always requires a mid and/or year-end report outlining details on how grant funds were spent, receipts, pictures of finished projects, etc.

Matching:

• • An organization raises a certain portion, the funder matches it.
    
  • Often aligns with one-time projects, fundraising campaigns, and capital projects to build momentum.
    
    • For example, a nonprofit organization is raising $10,000 to install a new ADA-accessible ramp at their facility; a grantor may agree to award $5,000 if the nonprofit can successfully raise the other $5,000.
      

The Bottom Line

Don’t let these grant types confuse you, and don’t chase after every grant. 

Assess what your organization actually needs, then pursue the funding that aligns best with your mission and goals.