Definitions & Resources
Definitions & Resources
Plain-language definitions of grant writing terms and a curated list of free and low-cost resources for going deeper.
B
Budget narrative
A written explanation of every line in your grant budget
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Also called a budget justification. A written document that accompanies your project budget and explains why each expense is necessary, how costs were calculated, and how they relate to project activities. For example: "Program Coordinator, 0.5 FTE × $52,000 = $26,000. This position will manage participant enrollment, coordinate volunteers, and maintain program data." A strong budget narrative makes your numbers tell a story — it's one of the most closely read parts of any proposal.
See also: Direct costs, Indirect costs, Matching funds
501(c)(3)
501(c)(3) status
Federal tax-exempt status for charitable nonprofits
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A designation from the IRS that classifies an organization as a tax-exempt charitable nonprofit under Section 501(c)(3) of the Internal Revenue Code. It is required by most private foundations and many government funders before they will award a grant. To obtain it, an organization must apply to the IRS using Form 1023 or 1023-EZ and demonstrate that it operates for charitable, educational, religious, scientific, or other qualifying purposes. Donations to 501(c)(3) organizations are generally tax-deductible for the donor.
See also: Fiscal sponsor, NTEE code
C
Capacity building
Strengthening your org's ability to do its work
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Funding or activities aimed at improving an organization's infrastructure, systems, staff skills, or leadership rather than funding direct programs. Examples include technology upgrades, staff training, strategic planning, and board development. Some funders specifically offer capacity building grants. Applying for one usually requires demonstrating a specific gap and a plan to address it.
Community foundation
A local grantmaking foundation serving a specific region
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A type of public charity that pools donations from many local donors and distributes grants to nonprofits in a defined geographic area — typically a city, county, or region. Community foundations are often a strong starting point for small local nonprofits because they prioritize geographic fit. Most publish annual reports and grant guidelines on their websites.
Cost sharing
When your organization contributes funds toward a grant-funded project
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Also called cost participation or matching. Cost sharing occurs when a grantee contributes a portion of a project's total cost from non-federal or non-funder sources. Some grants require cost sharing; others prohibit it. When required, the funder specifies the percentage and what counts as an eligible contribution — which may include cash, in-kind contributions, or volunteer time at a documented rate.
See also: Matching funds
Cultivation
Building a relationship with a funder before asking for money
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The process of developing a relationship with a prospective funder over time — before submitting any application. Cultivation activities might include attending a funder's information sessions, sending brief updates about your work, requesting an introductory call with a program officer, or inviting funders to see your programs in action. Funders give to organizations they know and trust. Cultivation is how you get known.
See also: Stewardship, Program officer
D
De minimis indirect cost rate
A default 10% overhead rate for organizations without a negotiated rate
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Under the federal Uniform Guidance (2 CFR 200), any organization that has never had a federally negotiated indirect cost rate may elect to use a de minimis rate of 10% of modified total direct costs (MTDC). This provides a simple way to recover indirect costs on federal grants without going through the negotiation process. Some state and private funders also accept the de minimis rate. You must affirmatively elect to use it — it is not applied automatically.
See also: Indirect costs, Uniform Guidance
Direct costs
Expenses tied specifically to a funded project
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Costs that can be directly attributed to a specific grant-funded project — for example, program staff salaries, supplies, participant stipends, or contracted services. Funders generally expect direct costs to make up the majority of a grant budget. Contrast with indirect costs (overhead).
See also: Indirect costs
Dissemination plan
How you will share your project's findings or results
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A section of a grant proposal — common in federal and research-focused grants — describing how the project's results, lessons learned, or products will be shared beyond the funded organization. Funders want to know that the work will contribute to the broader field. A dissemination plan might include publications, presentations, toolkits, community events, or partnerships with other organizations serving similar populations.
E
Evaluation plan
How you will measure whether your project achieved its goals
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A section of a grant proposal describing how you will assess your project's progress and outcomes — what you will measure, how you will collect data, who will conduct the evaluation, and how findings will be used. Many funders require an evaluation plan, especially for multi-year grants. It signals that you take accountability seriously and are willing to learn from your results. A simple evaluation plan for a small nonprofit might include pre/post surveys, participant tracking, and a brief annual report.
See also: Outcomes vs. outputs, Logic model
Executive summary
A brief overview of your entire grant proposal
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The opening section of a grant proposal — typically one page or less — that summarizes the organization, the problem, the proposed solution, the amount requested, and the expected outcomes. Many program officers read the executive summary first to decide whether to continue. Write it last, after the rest of the proposal is complete. It should be compelling enough to stand alone.
F
Fiscal sponsor
A nonprofit that receives grants on behalf of a project without 501(c)(3) status
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A legally recognized 501(c)(3) organization that agrees to accept grant funds and provide administrative oversight on behalf of a project or organization that doesn't yet have its own tax-exempt status. The fiscal sponsor takes legal responsibility for the funds, usually in exchange for an administrative fee (typically 5–15% of the grant). Fiscal sponsorship is common for new organizations, grassroots projects, and community groups that want to pursue grant funding before incorporating.
FOA — Funding Opportunity Announcement
Federal government's term for a grant solicitation
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The official document published by a federal agency describing a grant competition — including eligibility requirements, program goals, application instructions, evaluation criteria, and deadlines. FOAs are posted on Grants.gov and are the primary source of truth for any federal grant application. Also referred to as a Notice of Funding Opportunity (NOFO) or Notice of Funding Availability (NOFA) depending on the agency.
See also: RFP, RFA
G
Grant period
The timeframe during which grant funds must be spent
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The specific dates during which you are authorized to spend grant funds and conduct funded activities — typically 12, 24, or 36 months. Spending outside the grant period is not allowed and must be returned to the funder. Some funders allow no-cost extensions, which extend the period without additional funding when circumstances warrant it. Always confirm your grant period start date, as some funders begin it on the award date while others begin it on a fixed program date.
General operating support (GOS)
Unrestricted funding for your organization's overall work
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A grant that supports the general operations of a nonprofit rather than a specific project. GOS is considered the most flexible and valuable type of grant because it can be used for salaries, overhead, and any organizational need. It is also among the hardest to obtain — many funders prefer to fund specific programs. When you find a funder that offers GOS, it is worth cultivating that relationship carefully.
See also: Restricted funds, Unrestricted funds
Go/no-go decision
A structured decision about whether to pursue a grant
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A formal or informal assessment of whether an organization should invest time in applying for a particular grant opportunity. A go/no-go process evaluates factors like mission fit, eligibility, deadline feasibility, organizational capacity, and funder relationship. Making this decision deliberately — before investing significant writing time — is one of the most important habits a small nonprofit can develop. This is what Section 2 of Groundwork helps you do.
I
Indirect costs (overhead)
Organizational expenses not tied to a specific project
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Costs that support an organization's overall operations but can't be directly attributed to a single program — rent, utilities, accounting, executive staff time, insurance. Also called overhead or administrative costs. Many funders cap how much of a grant can cover indirect costs (commonly 10–20%). Federal grants often use a negotiated indirect cost rate. Small nonprofits without a negotiated rate may use a de minimis rate of 10% under the federal Uniform Guidance.
See also: Direct costs
L
Letter of inquiry (LOI)
A short pre-proposal sent to gauge funder interest
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A brief document — typically 1–3 pages — that introduces your organization and project to a funder before submitting a full proposal. Many foundations require an LOI as the first step in their application process. A strong LOI describes your mission, the problem you're addressing, your proposed solution, the amount requested, and why your organization is the right fit. If the funder expresses interest, they'll invite a full proposal.
Logic model
A visual framework linking resources to outcomes
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A diagram or table that maps the relationships between a program's inputs (resources), activities, outputs (what you produce), and outcomes (what changes as a result). Logic models are commonly required in federal grant applications and increasingly common in foundation proposals. They force you to articulate your program's theory of change in a structured way. Think of it as the visual counterpart to your narrative.
See also: Theory of change, Outputs, Outcomes
M
Matching funds / match requirement
Funding you must raise to receive a grant
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Some grants require the applicant to provide a portion of the total project cost from other sources — this is called a match. Matches can be cash (actual dollars) or in-kind (volunteer time, donated goods, or services). For example, a grant requiring a 1:1 match on a $50,000 award means you must raise or contribute $50,000 from other sources. Match requirements are a common reason small nonprofits pass on grants — always check before investing in an application.
N
Needs statement
The section of a proposal that defines the problem you're solving
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Also called a problem statement or statement of need. This is the section of a grant proposal that makes the case for why your work is necessary — documenting the problem, the population affected, and the gap in existing services. A strong needs statement uses data to quantify the problem and connects it directly to the funder's priorities. It answers the question: "Why does this matter, and why does it matter here?"
NTEE code
A classification code for nonprofits by mission area
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National Taxonomy of Exempt Entities — a system used by the IRS and Candid to categorize nonprofits by their primary mission. NTEE codes are used by grant databases to help funders find nonprofits in relevant subject areas, and by researchers to analyze the sector. Your organization's NTEE code is assigned when you apply for 501(c)(3) status and can be found on your IRS determination letter.
O
Outcomes vs. outputs
The difference between what you do and what changes
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Outputs are the direct, countable products of your activities — the number of people served, meals provided, classes taught, or materials distributed. Outcomes are the changes that result — improved skills, increased income, better health. Funders care about outcomes far more than outputs. "We served 200 people" is an output. "85% of participants improved their reading scores by at least one grade level" is an outcome. Both matter, but outcomes demonstrate impact.
See also: Logic model, Theory of change
P
Program officer
The funder staff person who manages your grant relationship
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The person at a foundation or government agency who oversees a grant program — reviewing applications, making recommendations to decision-makers, and managing relationships with grantees. Building a relationship with a program officer before you apply is one of the most effective things you can do. Many foundations encourage prospective applicants to reach out before submitting. Program officers can tell you whether your project is a fit and what the funder is prioritizing this cycle.
P
Prospect research
The process of identifying funders most likely to support your work
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The systematic process of researching potential funders — foundations, government agencies, and corporations — to identify those whose priorities, geography, and giving history align with your organization's mission and programs. Good prospect research looks at a funder's past grants (available in their 990s via Candid or ProPublica), stated priorities, geographic focus, and typical award sizes. It saves time by helping you focus applications on opportunities where you have a genuine fit.
See also: Program officer, Go/no-go decision
R
Restricted vs. unrestricted funds
Whether grant money can only be used for specific purposes
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Restricted funds must be used for the specific purpose stated in the grant — a particular program, project, or budget line. Unrestricted funds can be used for any organizational purpose. Most grants are restricted. When a funder awards unrestricted general operating support, it signals a high level of trust in your organization. Restricted grants require careful tracking to ensure you spend funds only as specified, and to report accurately to the funder.
See also: General operating support
RFP / RFA
The document describing a grant opportunity and how to apply
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Request for Proposals (RFP) or Request for Applications (RFA) — the formal document a funder publishes when soliciting grant applications. An RFP describes the funder's priorities, what they will and won't fund, eligibility requirements, application instructions, evaluation criteria, budget limits, and deadlines. Reading the RFP thoroughly before writing a single word is non-negotiable. Proposals that don't follow RFP instructions are routinely disqualified.
See also: FOA
S
SAM.gov / UEI
Federal registration required for government grants
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The System for Award Management (SAM.gov) is the federal government's registration database for entities that want to do business with the federal government, including receiving grants. The Unique Entity Identifier (UEI) is a 12-character alphanumeric code assigned to each registered entity. Registration is free and required for all federal grant applications. It must be renewed annually. The UEI replaced the former DUNS number system in 2022.
Sustainability plan
How your program continues after the grant period ends
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Most funders expect grant-funded programs to continue beyond the grant period — and will ask how you plan to sustain the work. A sustainability plan addresses where future funding will come from (other grants, earned income, individual donors, government contracts), what the program looks like when scaled back if needed, and how you'll maintain outcomes. A vague or absent sustainability plan is a common reason proposals are declined.
Single Audit
A required annual audit for organizations spending $750,000+ in federal funds
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An organization-wide financial and compliance audit required by the Uniform Guidance for any entity that expends $750,000 or more in federal financial assistance in a fiscal year. The Single Audit goes beyond a standard financial audit — it also examines whether federal funds were used in accordance with program requirements. If your organization approaches this threshold through a combination of federal grants and subcontracts, you must plan for the cost and administrative burden of the audit itself.
See also: Uniform Guidance
Stewardship
Maintaining and deepening relationships with existing funders
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The ongoing work of nurturing relationships with funders who have already given to your organization — going beyond required reporting to keep funders informed, appreciated, and engaged. Good stewardship includes timely reports, personal thank-you notes, program updates between grant cycles, and invitations to see your work. Funders who feel well-stewarded are far more likely to renew grants and increase funding over time.
See also: Cultivation, Program officer
S
Subrecipient / subgrantee
An organization that receives grant funds through another organization
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A subrecipient is an organization that receives a portion of a grant from the primary grantee (the "pass-through entity") rather than directly from the funder. This is common in federal grants, where a state agency or large nonprofit receives funds and then passes them to community organizations to deliver services. Subrecipients are subject to the same federal compliance requirements as direct recipients, including the Uniform Guidance. If you receive federal funds through another nonprofit or government agency, you are likely a subrecipient.
See also: Uniform Guidance, Fiscal sponsor
T
Theory of change
The logic linking your activities to long-term outcomes
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An explanation of why you believe your activities will produce the outcomes you claim — the "if/then" logic behind your program. A theory of change answers: if we do X, then Y will happen, because Z. Funders use it to assess whether your approach is evidence-based and logically sound. It is distinct from a logic model (which is typically a visual diagram) but closely related. You don't need jargon — a clear, honest statement of your program's logic is enough.
See also: Logic model, Outcomes vs. outputs
U
Uniform Guidance (2 CFR 200)
The federal rulebook for grants management
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A set of federal regulations (found at 2 CFR Part 200) that establishes the rules for how federal grant funds must be managed, accounted for, and reported by recipients. If your organization receives federal grant funds — directly or as a subrecipient through a state or local government — you are subject to the Uniform Guidance. Key areas include allowable costs, procurement, financial management, and audit requirements. Organizations spending $750,000 or more in federal funds in a year must undergo a Single Audit.
Finding Funders
Candid Search
Free / Paid
The most comprehensive database of U.S. foundation funders and their grants. Free accounts can search basic profiles; paid tiers unlock full giving histories. Access the full database for free at many public libraries through Candid's Funding Information Network.
candid.org/candid-search
Grants.gov
Free
The official U.S. government portal for federal grant opportunities. Every discretionary federal grant must be posted here. Free to search and apply. Registration is required to submit applications.
grants.gov
Grant Research Tools Comparison — National Council of Nonprofits
Free
A side-by-side comparison of major grant research databases — what they include, what they cost, and who they're best suited for. A good starting point before committing to a paid tool.
councilofnonprofits.org
Writing & Craft
Crafting Compelling Grant Proposals — Candid Learning
Free
A free, self-paced online course that walks through each component of a grant proposal — executive summary, needs statement, program description, budget narrative, and evaluation plan. Includes activities and examples. Requires a free account.
learning.candid.org
Sample Grant Proposals & LOIs — Candid
Free
A collection of actual funded proposals, letters of inquiry, cover letters, and budget templates, each with commentary from the funder who awarded the grant. One of the most useful free resources available for first-time grant writers.
learning.candid.org/page/sample-documents
Grant Writing Classes — NonprofitReady
Free
Free online courses covering grant writing fundamentals, finding the right grants, and writing compelling proposals. NonprofitReady is a project of a coalition of foundations and offers professional-level training at no cost. Requires a free account.
nonprofitready.org/grant-writing-classes
How Do I Write a Grant Proposal? — Candid Knowledge Base
Free
A comprehensive plain-language guide to the components of a grant proposal, common mistakes, and five tips for writing success. Part of Candid's free knowledge base for nonprofits.
learning.candid.org
Theory of Change
How to Develop a Theory of Change — Annie E. Casey Foundation
Free
A comprehensive, practical guide developed by the Annie E. Casey Foundation — one of the sector's most trusted sources on program evaluation and theory of change. Includes step-by-step guidance with an emphasis on equity and community engagement.
aecf.org/resources/theory-of-change
Theory of Change: Everything Your Nonprofit Needs to Know — Prosper Strategies
Free
An accessible, nonprofit-focused guide to what a theory of change is, when you need one, and how to build one from scratch. Good for organizations that are new to the concept and want a practical starting point.
prosper-strategies.com
Federal Grants
Grants Learning Center — Grants.gov
Free
The official federal resource for understanding how federal grants work — from finding opportunities to applying, managing awards, and reporting. Includes articles, videos, and a blog series on grant writing basics. Essential if you plan to pursue any federal funding.
grants.gov/learn-grants
Resources for Understanding Government Grants — National Council of Nonprofits
Free
An overview of federal grant terminology, the Uniform Guidance, and what nonprofits need to know before pursuing government funding. Especially useful for organizations new to federal grants or subrecipient relationships.
councilofnonprofits.org
SAM.gov — System for Award Management
Free
The federal registration portal required for any organization seeking federal grants. Registration is free and must be renewed annually. Your Unique Entity Identifier (UEI) is assigned here. Allow at least 2–3 weeks for registration to process before a federal application deadline.
sam.gov
Nonprofit Finance & Compliance
Understanding Indirect Costs — National Council of Nonprofits
Free
A plain-language explanation of what indirect costs are, why they matter, and what the sector's evolving standards look like. The 2024 update to the Uniform Guidance raised the de minimis indirect cost rate to 15%. Essential reading before pursuing any federal grant.
councilofnonprofits.org
Nonprofit Accounting Basics
Free
A free educational resource covering the fundamentals of nonprofit financial management — fund accounting, budgeting, financial statements, and compliance. Produced by the Greater Washington Society of CPAs Education Foundation. Particularly useful for small nonprofits without dedicated financial staff.
nonprofitaccountingbasics.org
Nonprofit Operations
Nonprofit Resource Library — National Council of Nonprofits
Free
Hundreds of free guides, templates, and articles covering every aspect of nonprofit management — financial management, board governance, HR, compliance, fundraising, and more. One of the most comprehensive free resources available to nonprofits of any size.
councilofnonprofits.org/tools-resources
Grant Writing Tips & Free Resources — Candid
Free
A curated hub of grant writing tips, expert articles, and free proposal resources from Candid — including how to research funders, tailor proposals, and avoid common mistakes. Updated regularly.
candid.org
Board Governance
Fundamental Topics of Nonprofit Board Service — BoardSource
Free
The sector standard for board governance guidance. This page covers fiduciary duties, board-staff relationships, financial oversight, and recommended practices — with links to free checklists and tools. BoardSource is the recognized national authority on nonprofit board leadership.
boardsource.org/fundamental-topics-of-nonprofit-board-service
Board Roles and Responsibilities — National Council of Nonprofits
Free
A comprehensive, plain-language guide to board roles, responsibilities, composition, and governance best practices — including fiduciary duties, meeting requirements, and the board-executive director relationship. Part of NCN's free resource library.
councilofnonprofits.org
Tools & Data
Nonprofit Explorer — ProPublica
Free
A free, searchable database of IRS Form 990s for every U.S. nonprofit. Invaluable for prospect research — look up any foundation to see their past grants, board members, total assets, and giving history. No account required.
projects.propublica.org/nonprofits
How Do I Find Grants for My Nonprofit? — Candid
Free
A step-by-step guide to prospect research — how to identify funders, search by subject and geography, evaluate fit, and manage your pipeline. Includes guidance on using Candid's free search tools and reading 990s to understand funder priorities.
learning.candid.org