Understanding Federal, State, and Local Grants: A Guide to Grants for Nonprofits

The big picture: What government grants have in common

Whether the funds come from Washington, your state capital, or city hall—most government grants for nonprofits follow similar patterns. Knowing these shared elements can help you build a strong foundation for your grant applications.

• Public funding: All government grants are funded by taxpayers and are designed to support public good—whether that’s education, health, the arts, or community development.
• Application process: You’ll typically need to submit a formal proposal or application, often including budgets, impact metrics, and organizational details
• Eligibility rules: Grants usually have clear criteria around which organizations qualify, often based on nonprofit status, location, or focus area.
• Reporting requirements: Grantees are expected to track and report how funds are used, often with detailed documentation.

Never miss a grant deadline with DonorPerfect’s contact reminders and scheduled reports that land right in your inbox with a frequency you set.

Laying the groundwork: Capacity building for grant readiness

Before you even start searching for grants for nonprofits, it’s essential to assess whether your nonprofit is grant-ready. From financial systems to staffing, this section helps you prepare your internal operations so you can compete with confidence.

Government grants—especially at the state and federal level—often come with complex requirements, both before and after the funding is awarded. Here’s how to build your internal capacity to succeed:

• Financial systems: Do you have clean, auditable financial records? Many grants require detailed budgets and reporting.
• Documentation toolkit: Create a centralized folder with your IRS determination letter, organizational budget, board list, bios, audited financials, and past reports.
• Staffing: Consider who will manage the grant. Do you have someone dedicated to compliance, reporting, and communication?
• Track record: If you’re newer, start small. Applying for local grants can help build your portfolio before pursuing larger awards.

With DonorPerfect, you can centralize your documentation, track grant deadlines, and stay on top of reporting—all in one place.

Now, let’s break down how each level of government approaches grantmaking.

Federal grants

Overview: Federal grants for nonprofits are issued by U.S. government agencies such as the Department of Health and Human Services, the Department of Education, and the National Endowment for the Arts. These grants tend to be large, competitive, and require detailed proposals.

Best for nonprofits that…

• Operate at a national or multi-state level
• Have experience with compliance and reporting
• Have the infrastructure to manage larger funding amounts

Where to find them:

• Grants.gov is the central hub for all federal grant opportunities. You can search by agency, eligibility, or topic.

Tips for applying:

• Start early: Applications are often complex and take time to prepare.
• Register in advance: You’ll need a DUNS number (a unique nine-digit identifier issued by Dun & Bradstreet to track federal funding) and be registered with the System for Award Management (SAM.gov).
• Track your progress: Use a CRM to manage deadlines and organize documentation.

Dun & Bradstreet help organizations manage risk, drive growth, and secure funding opportunities. For nonprofits, having a DUNS number is a critical step in applying for federal grants, enabling greater access to public funding streams.

State grants

Overview: State governments also offer grants for nonprofits, often to support programs within their own borders. These might be funded by state budgets or passed down from federal programs. State-level grants are designed to support programs with regional impact. These opportunities are often tied to community needs and come from state agencies. Learn how to find them and how to build relationships that can strengthen your proposals.

Best for nonprofits that…

• Serve a specific state or regional population
• Focus on education, health, or community services
• Can demonstrate measurable local impact

Where to find them:

• Check your state’s official government or grants portal. Search “YourState.gov grants” to get started.
• Look at state agency websites (e.g., departments of education, human services, or cultural affairs).

Tips for applying:

• Network with program officers: reach out with questions and to introduce your organization. Building relationships can help you better understand funding priorities and strengthen future applications.
• Many states run annual grant programs with similar timelines and requirements each year. Research last year’s deadlines and application materials to anticipate what’s coming. This gives your team time to gather documents, refine your proposal, and be ready to apply as soon as the new cycle opens.

Make sure your CRM works for you. DonorPerfect can help you track key relationships, so you can build a strong rapport with the connections that will drive your fundraising success.

Developing a strategic grant-seeking approach

Rather than chasing every opportunity that appears in your inbox, it’s more effective to develop a grant strategy that aligns with your nonprofit’s mission and capacity.

Here’s how:

• Know your goals: Define clear program outcomes and funding priorities before you start looking for grants.
• Target your search: Use filters and alerts on grant databases to identify the best-fit opportunities at each government level.
• Diversify your pipeline: Aim for a mix of federal, state, local, and private funding to avoid reliance on a single source.
• Create a grant calendar: Track deadlines, renewal cycles, and reporting periods with a centralized calendar—DonorPerfect makes this easy.
• Plan ahead: Assign roles early, collect necessary documents in advance, and draft reusable language for proposals.

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Looking to strengthen your grant strategy and make the most of your DonorPerfect tools? The DonorPerfect Community Conference is a free, virtual event happening June 3–4, designed to help fundraising professionals like you build stronger donor relationships, streamline systems, and drive real impact.

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A strong strategy ensures your team isn’t just reacting to opportunities but actively pursuing funding that supports your long-term mission.

Choosing the right grant for your organization

Not every grant is the right fit. Use this checklist to evaluate whether a grant matches your capacity, mission, and goals—so you invest your time where it counts. Before diving into an application, ask:

• Does this grant align with our mission and programs?
• Do we meet all eligibility requirements?
• Can we fulfill the reporting and compliance expectations?
• Is the amount of funding worth the time and effort to apply?

Final thought: A strategic approach to grant-seeking

Successful grant-seeking isn’t just about finding money—it’s about building sustainable partnerships with funders at every level. Whether you’re applying for a major federal award or a small local grant, DonorPerfect can help you organize your efforts, track communications, and measure outcomes so you’re always ready for your next opportunity.

Let your mission lead the way, and let the right grants power your path forward.

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