Topic: Prospecting12 min read
Is frequent prospecting needed? This guide answers that question, and provides the best methods for finding and evaluating new grant funders without using an expensive paid database.
Michael’s noteBefore we begin…
This might be a controversial opinion to some grant professionals, but prospecting is easy. You do not need an expensive prospecting tool or grant tracker that has prospect research built in. These tools will often promise the ability to unlock hundreds of thousands of dollars in potential funding for your organization. Perhaps they will, or perhaps they could, but usually there are one or two disqualifiers that make a vast majority of these potential funding sources not viable. Mostly, what they provide, is a weekly digest of funders or grant opportunities that you have to sift through and review, resulting in just another email sitting in your inbox.
The reality is that new funders aren’t popping up every week, every month, or every year. More than likely, you already know all the funders in your region. Therefore, the hard part is not prospecting and finding potential funders. The hard part is securing revenue from new funders. The best way to do this is to narrow your list of prospects to a manageable number, anywhere from 5 to 10, and create a thoughtful cultivation strategy for outreach, networking, and relationship building with these funders.
In my experience, cold applications rarely work. Limit the number of cold applications by using them as a strategy for engagement. Some funders will say: “keep trying and keep submitting grants. It will take a few applications for us to consider supporting your organization.” With that, use cold applications in conjunction with a strategic cultivation approach to secure new funding.
If you feel like you may not know all the funders in your region, if you’re in a new space, or if your executive leadership team is asking for “more prospects/more revenue,” there are a number of free or low-cost ways that you can prospect for your organization.
One of the most effective ways to discover new funders is by exploring the websites of local peer organizations. Many nonprofits publicly acknowledge their financial supporters in sections like “Our Partners,” “Supporters,” or “Funders.” Others include this information in annual reports, audited financials, or posted 990s.
Start by identifying nonprofits that offer similar services in your region. Review their websites to see which foundations or corporations have funded them. If a funder has supported a similar organization, they may be open to supporting yours as well.
Form 990s offer a wealth of information for prospecting. These public tax documents, which foundations must file annually, provide insight into a funder’s assets, giving trends, and list of grants awarded. You can typically find them on a foundation’s profile on Candid or ProPublica’s Nonprofit Explorer.
When reviewing a 990, pay attention to who the foundation funded, where those grantees are located, and how much they received. This helps you estimate an appropriate ask amount and determine whether a funder’s interests align with your work.
A smart tactic is to cross-reference the peer organizations you’ve already identified. If a foundation has funded one or more of them, there’s a reasonable chance they may be interested in supporting your organization too.
Your own familiarity with a region can be one of the most powerful tools in prospecting. You may already be aware of foundations, corporate donors, or individual philanthropists making an impact in the area.
Think through the corporations headquartered near you. And as you continue working on behalf of your organization, you will routinely hear of new leads from partners and program staff.
Though it may seem basic, Google — especially Google News — can be surprisingly helpful for identifying funding trends. Many organizations announce major grants through press releases or media coverage.
You can also search for specific foundations or donors to see if they’ve been in the news lately. This is particularly useful for verifying whether a prospect is still actively funding, or for learning more about their current priorities.
AI platforms such as ChatGPT, Claude, and Gemini are fantastic ways to find potential funders for your mission. In fact, at the national nonprofit that I worked for, we actually ditched an expensive prospect research site in favor of using a paid AI platform (which saved the org $1,000+ a year). Check out the How to use AI to find new grant prospects resource for a deep dive into how to set up your AI platform to successfully prospect for your organization. Once you set up your AI prospecting system, it can pull a list of funders for a specific program or initiative and/or perform deep-dive research into one particular funder.
If your organization is interested in securing government revenue, pretty much all government websites have a weekly or monthly newsletter that provides updates regarding recently launched RFPs. Therefore, I suggest doing a quick search for city, county, or state departments that would release work aligned with your organization. For example, if you are a workforce development organization, you might want to sign up for the California Workforce Development Board newsletter. Do an initial analysis of all these potential departments and sign up for all their newsletters. By doing so, you’ll be able to stay updated on all potential government sources of revenue.
As far as paid platforms go, I’ve used Candid and GrantStation. While they aren’t necessary, both work quite well and can help you find new prospects. Candid is a bit pricey, but they do provide a nonprofit discount. GrantStation does come included, for free, with a Grant Professional Association membership.
Once you’ve identified a potential funder, their website should be your first stop. Google and 990s are helpful for discovery, but a funder’s official site will usually offer the most up-to-date and relevant information for evaluation. Below are the key elements to consider.
Nearly all foundations outline their mission and funding priorities clearly. Your first step is to assess whether those priorities align with your organization’s work. If a foundation focuses on areas like children’s health, animal welfare, hospitals, or scientific research and your organization does not, it’s unlikely to be a fit. If you see language that aligns with your mission, you may have a promising lead.
As you evaluate alignment, consider how your programs could fit within the funder’s portfolio. A foundation focused on “economic opportunity” might be interested in your “career training pathways.” A place-based funder may be drawn to programming operating in their priority region.
Many funders limit their giving based on location — by grantee headquarters, service area, or both. If it’s not explicitly stated on the funder’s website, review past grantees to identify trends. If a foundation is based in Texas and only supports Texas-based nonprofits, it likely isn’t worth pursuing for a California nonprofit.
Some foundations only support organizations that fall within certain budget limits — for example, “ACME Foundation supports organizations with annual expenses of $6 million or less.” Compare their requirements against your current operating budget. If there’s uncertainty, don’t hesitate to reach out directly to the foundation for clarification. A brief email or call can prevent unnecessary effort down the line.
It’s important to consider not only whether a foundation gives, but how much. If the average gift size is $5,000 but the application process is lengthy and reporting is intensive, it might not be worth your team’s time. In some situations, a funding source might require a significant workload increase for your program teams — verify that the increased workload is achievable, or whether additional staffing is needed.
Always tailor your request to a funder’s typical giving range. Asking for $200,000 from a foundation that rarely gives more than $25,000 is likely to be a non-starter.
Michael’s noteIs the juice worth the squeeze? Quick story: an organization I worked for once secured a $10,000 city grant. I, an executive director, a finance director, an accounting employee, and multiple compliance employees all spent tens of hours figuring out how to spend and report on this grant. By the end of the grant period, we probably netted $1,000 or $2,000 after subtracting all the salary costs that were spent figuring out this grant. The following year, at my behest, we did not apply for this grant.
Sometimes the juice isn’t worth the squeeze, and it’s important to consider both the total grant amount and the lift before you commit. This is particularly true for government grants, which often have strict and intense reporting requirements. Ensure that your program teams have the capacity to report on these grants and that other organization leaders can support.
Some funders are only interested in certain types of support — capital purchases such as vehicles or computers, program-specific funding, or general operating support. Make sure their giving type aligns with your actual needs. If a funder only supports equipment purchases and your site doesn’t need anything capital-related, they may not be a good fit. Understanding this helps you set expectations and target your ask appropriately.
Occasionally a foundation may require grantees to have a local board of directors. Confirm whether you have a board operating in the regions the funder requires.
Separately, some funders prioritize minority-led organizations. Nonprofits typically are not classified as minority- or woman-owned businesses, since nonprofits do not have formal owners. But if your organization has a minority leader, or if your board and leadership team include strong BIPOC and female representation, this funding could be a fit for you.
Finally, determine whether the funder is “open” or “invite only.” Many foundations only accept proposals by invitation, which makes thoughtful cultivation essential. In these cases, the best first step is often a (re)introductory meeting to learn more about their priorities and explore where your work might fit.
Whether or not a funder is invite-only, it’s always good practice to develop a strategy for building the relationship — ideally one that centers on how you can help the funder achieve their mission.
Before a prospect earns a spot in your pipeline, answer these:
As mentioned throughout this resource, prospecting is the easy part. Therefore, I intentionally built Grantary without a built-in prospecting feature because you can prospect for free or very affordably using resources you more than likely already have access to.
Use Grantary to store your list of all prospects that you’ve identified, as well as all funders that are current supporters of your organization. Grantary can also help you track your cultivation strategy for these prospects through the deliverables feature. In addition, you can post updates and progress toward securing revenue from each funder. You can also identify whether a funder is one that you are actively pursuing or one that’s on hold for now.
No. In fact, a national nonprofit that I worked for that fundraised in 30 cities across 12 states moved away from using one of these paid prospect research platforms for two reasons. First, we knew all the funders. There are few to no surprise funders that will come out of hiding and give money. Second, we learned how to use AI very well to help us when we did prospect by completing deep-dive research into potential new funders.
Usually, you would look at a 990 for average gift amount. Honestly, I don’t really often look at 990s. Funder websites have thankfully become quite forthcoming in providing giving ranges, listing current grantees, and communicating any open grant applications.
“Invite only” means that they are not accepting unsolicited grant applications. Therefore, the only real avenue for these types of funders is cultivation in an effort to eventually get invited to apply. As mentioned earlier, cultivation is the hard part. There is no science behind it. Sometimes it’s who you know, and sometimes it’s who you randomly run into at an event. Do your best to be strategic and track your approach in something like Grantary.
For the most part, funders will provide their giving range on their grant application web page. You can also use 990s or an AI platform to discover this average giving range.
No, but if your organization has the budget for it, it can help.
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