Start with small grants
If you are just starting work with your brand-new NGO, starting with very small grants is a good idea. Small grants generally do not exceed 5000 to 25000 USD and are also called seed-funding. While many of the big donors expect their grantees to have a lot of experience and to be in the position to fulfill all requirements without problems, mall-grants-donors are typically much more understanding. They know that a new NGO will not have references or the perfect management system in place, so it is a very good way to start with a small project and build on this in the future. You thereby get access to funding – albeit a small amount in the beginning – and have the opportunity to learn and grow with your organization.
These two ways are great entries in the fundraising world. It allows for the collection of experiences on the one hand, and to show your reliability as a partner further down the road. If you keep trying and working hard, bigger donors will eventually be willing to support your work too.
Many smaller NGOs, often grass-roots, with small budgets, have difficulty finding funds for their projects. Their capacity to research donors is limited. They also feel that most donors prefer giving large grants to well-known NGOs. At the same time, thousands of small NGOs around the world are successfully attracting small grants from interested donors. How do they manage this? This short guide provides answers on funding and successfully applying for small grants.
Why would funders give to brand new NGOs?
Many new NGOs feel that they are at a great disadvantage when it comes to fundraising compared to large high-capacity NGOs and that few donors give out small grants. Our research indicates that this is not necessarily the case and that donors around the world are providing small grants to NGOs.
What could be some of their reasons?
- The donor has limited resources and only gives away small amounts
- The donor is interested in helping new NGOs that work at the grassroots level
- The donor feels small organizations are more nimble and can work more effectively
- The donor feels they will be more influential funding a new and smaller NGO
- New NGO works in the specific area the donor is interested in
- The donor wants to spread its wealth (give small amounts to many NGOs) and many more…
Where do I start?
What do I need funding for?
Make sure that you clearly develop the program that requires funding. In order to identify a good donor and submit a successful application, you need to be very clear about what it is you are going to implement and what results (impact) the program is going to achieve.
How much do we need?
Also, budget out the program and identify the total resources needed. Can one small grant cover the entire program or do we need several donors to do this? Before we can ask a donor for funding, we need to know for what and how much we are asking.
While it is difficult to find accurate statistics on the number of small versus large grants, a review of US Foundation grants to Tanzanian NGOs is instructive. From some 490 grants given to Tanzanian NGOs since 2003, almost 60% were small grants (8% were under $5,000; 19% under $10,000; 41% under $15,000; and 58% under $25,000). Though only one example, this shows that many donors are in fact effectively providing small grants to NGOs.
So now we know that donors do give small grants, but how do we find them?
- Check websites and annual reports of NGOs that are of a similar size and scope to your NGO to check who funds them
- Check databases of funders (e.g. the Foundation Center Directory of Foundations in the US)
- Check donor websites for guidelines and funding criteria
- Ask peers and colleagues for suggestions
- Sign up for newsletters that provide funding information on small grants
How do I contact these donors?
Once you have identified a list of potential donors, reach out to them. Email or phone them and request a meeting in person (if they are located in the country/city where you work) or by phone/Skype (if they are located elsewhere). Once you make contact, be sure to ask more about their goals and strategies – what is it they want from an NGO? Next, provide information on your NGO and project, and then propose to send to them a short concept note that outlines a program in which they could be interested.
What shall we send them?
Send the donor a concept note that summarizes the program and budget. Do not send them a big proposal with annexes unless they have asked for this specifically. Set a date to follow-up with this donor. Answer any questions they might have, and ask for feedback.
Getting to a “yes.”
If the donor is not interested, thank them for reviewing your proposal and indicate you will get back to them in the future. Try again with a revised or different proposal six months or so later. “No” often means – not now – so don’t give up too quickly. If the donor is interested, they will often ask you for a more detailed proposal. Keep your fingers crossed for them to say yes!