Combining Federal, State and Private Grants in Your Search Strategy

Why Diversification Matters

Nonprofits that rely on only one type of funding source face enormous risk. If your sole foundation donor changes priorities, or a federal grant program gets defunded, your organization could lose 40-60% of revenue overnight.

The Danger of Over-Reliance:

Real Example: A youth mentoring nonprofit in Ohio had 75% of its funding from one federal Department of Education grant. When that program was eliminated in 2023, they had to lay off 80% of staff within 60 days.

The 40-40-20 Rule: Best practice is to keep no single funding source above 40% of your total revenue. Ideally: 40% government grants, 40% private foundations, 20% individual/corporate donors.

A diversified grant strategy across federal, state, local, and private sources creates stability, maximizes opportunities, and positions you for sustainable growth.

Understanding Each Funding Source

Federal Grants

Source: U.S. government agencies (HHS, DOE, NSF, DOJ, etc.)

✓ Advantages:

• Largest grant amounts ($100K-$5M+)
• Multi-year funding (3-5 years common)
• Prestigious and credible
• Can include indirect cost recovery (15-30%)

✗ Challenges:

• Extremely competitive (5-15% success rates)
• Complex application requirements (50-100 pages)
• Strict compliance and reporting
• Long decision timelines (6-12 months)

Best for: Established nonprofits with proven track records, dedicated grant staff, and capacity to manage complex compliance requirements.

State & Local Government Grants

Source: State agencies, county governments, city councils

✓ Advantages:

• Less competitive than federal
• Geographic alignment (prefer local orgs)
• Faster decisions (2-4 months)
• Relationship opportunities with local officials

✗ Challenges:

• Smaller award amounts ($5K-$100K)
• Often annual (not multi-year)
• Subject to state budget fluctuations
• Requires local presence/service area

Best for: Community-based organizations serving local populations, especially those addressing state/city priorities (homelessness, workforce development, public health).

Private Foundations

Source: Family foundations, corporate foundations, community foundations

✓ Advantages:

• Flexible funding (general operating support possible)
• Relationship-based (board connections matter)
• Faster decisions (1-3 months typical)
• Less bureaucratic reporting
• Wide range of sizes ($1K-$1M+)

✗ Challenges:

• Finding right-fit foundations takes research
• Geographic and mission restrictions
• Often single-year awards
• Smaller than federal grants typically
• No indirect cost recovery

Best for: Organizations of all sizes. Small foundations ($5K-$50K) are perfect for emerging nonprofits; large foundations ($100K-$1M+) support scaling organizations.

Building a Diversified Grant Portfolio

Here's how to strategically combine funding sources based on your organization's size and stage:

Emerging Organizations ($100K-$500K Annual Budget)

60%

Private Foundations

Focus on local community foundations and small family foundations ($5K-$25K grants). Build relationships and demonstrate impact.

30%

State/Local Government

Apply for city/county grants and state programs aligned with your mission. Geographic preference works in your favor.

10%

Federal Grants

Explore smaller federal programs ($25K-$75K) or serve as a sub-grantee to larger organizations. Build capacity for future direct applications.

Growing Organizations ($500K-$3M Annual Budget)

40%

Private Foundations

Pursue medium-to-large foundations ($50K-$250K). Secure multi-year commitments where possible.

40%

Federal Grants

Submit 3-5 federal applications per year. Target programs with proven track records in your field.

20%

State/Local Government

Maintain relationships with state agencies. Participate in RFPs for service contracts.

Established Organizations ($3M-$10M+ Annual Budget)

45%

Federal Grants

Lead multi-million dollar federal grants. Position as national leader in your issue area.

35%

Private Foundations

Maintain diverse foundation portfolio (20-30 active foundation relationships). Focus on sustaining donors and major gifts.

20%

State/Local Government

Secure large state contracts for service delivery. Influence policy development.

How to Find Grants Across All Sources

Federal Grants: Grants.gov

Free • Official source for all federal grant opportunities • Search by agency, keyword, eligibility

💡 Tip: Subscribe to email alerts for your issue area. Check daily—many federal grants have 30-45 day application windows.

State/Local Grants: State Government Websites

Free • Visit your state's grant portal (e.g., "Ohio Grants Partnership") • Check county and city websites

💡 Tip: Build relationships with state agency program officers. Attend informational webinars before applying.

Private Foundations: Grant Management Software

Expirely ($49/month) or Candid ($149-329/month) • Searchable databases of 40,000+ foundations with IRS 990 data

💡 Tip: Expirely combines federal (Grants.gov) + 41,000 private foundations in one platform for 1/3 the cost of Candid alone.

Strategic Application Timing

Stagger Applications to Maintain Cash Flow:

Don't submit all grants in January and then have nothing in the pipeline for Q2-Q4. Plan a year-round application calendar:

Q1 (Jan-Mar)

• 2 federal grants
• 3 private foundations
• 1 state program

Q2 (Apr-Jun)

• 1 federal grant
• 4 private foundations
• 2 local grants

Q3 (Jul-Sep)

• 3 federal grants
• 2 private foundations
• 1 state program

Q4 (Oct-Dec)

• 1 federal grant
• 5 private foundations (calendar year-end)
• Corporate giving season

Success Metrics by Source Type

Metric	Federal	State/Local	Private Foundations
Typical Success Rate	5-15%	20-30%	25-35%
Average Application Time	80-120 hours	20-40 hours	10-25 hours
Decision Timeline	6-12 months	2-4 months	1-3 months
Typical Award Size	$100K-$5M+	$10K-$150K	$5K-$500K
ROI (Award/Time Invested)	$10K-50K/hour	$300-$3K/hour	$200-$20K/hour

Final Recommendation

Don't put all your eggs in one basket. The most financially stable nonprofits maintain diversified grant portfolios:

Apply to 3-5 federal grants per year (even if success rate is low—one win = transformational funding)

Maintain 10-15 active private foundation relationships (higher success rate, more predictable)

Pursue 2-4 state/local grants annually (geographic advantage, faster decisions)

Supplement with individual donors and earned revenue (20%+ of total budget)

Search Federal + Private Grants in One Platform

Expirely combines Grants.gov federal opportunities + 41,000 private foundations + AI writing tools for just $49/month.