Understanding the Difference between Grant writing and Fundraising?

Timothy Akinleye
June 2, 2022
min read

With both grant writing and fundraising, you need to do research, pursue leads, prepare talking points, evaluate opportunities, and cultivate relationships. The essence of both practices is the same. What is different is focus and context.

What is Grant Writing?

A grant is a financial donation given to support a business, organization, or project. Essentially, a grant is a gift of money awarded to an entity so that the entity can achieve a specific goal or purpose. A grant is mostly awarded to businesses or non-profit organizations from a foundation, corporation, or government agency.

Thus, grant writing is the act of preparing an application to receive funding for a project or organization that does not need to be paid back. The money received from a grant is called grant funding.

Successful grant writing ultimately accomplishes funding for your business or organization whether it be for a specific project, program, or general operating purpose. Because grants are often awarded for specific projects, the received funds are "restricted funds" and they must be used exactly as the funder specifies.

What is Fundraising?

Fundraising is generally defined as the process of soliciting financial support. Central to the idea of fundraising is the collection of cash donations. Donations can be collected immediately or over a while.
Fundraising is an essential way for most non-profit organizations to bring in revenue for their organization’s mission. The money raised through general fundraising is often referred to as "unrestricted funds" and can be used for any of your organization's expenses, such as staff salaries or rent. Donors can also require that their money be used in a specific way in which case the organization is expected to honor the donor's intent.

So what’s the difference between Grant writing and Fundraising?

Specifically, grant writing is a way to raise funds so it does technically fall under the fundraising umbrella. However, fundraising refers to generating cash donations by either cultivating individual donors, holding fundraising events, or appealing for donations.

Conversely, when you submit a proposal to a grant funder, it is almost like a pitch. This is similar to how you might make a pitch to an individual donor, but the relationship between you and the funder is more formalized and less personal. When pursuing grant funding, you’re submitting a proposal to an entity that exists for the very purpose of giving money to organizations.

Moreover, the funder’s past giving history is often made accessible to the public. In contrast, with individual donors, you may be soliciting funds from individuals whose financial circumstances, family situation, and philanthropic interests are largely unknown to you. This is why relationship building is emphasized so greatly in fundraising.

We hope you enjoyed your read.

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