Small vs Large Grants: Which Strategy Works Best?

One of the most important strategic decisions facing nonprofits is how to approach grant funding: Should you pursue many small grants or focus on securing fewer, larger awards? The answer depends on your organization's capacity, goals, and risk tolerance.

Understanding Grant Sizes

Small Grants

• **Typical Range**: $1,000 - $25,000
• **Duration**: Usually 1 year or less
• **Common Sources**: Local foundations, corporate giving programs, small family foundations
• **Application Process**: Often streamlined with shorter applications

Large Grants

• **Typical Range**: $100,000 - $1,000,000+
• **Duration**: Often multi-year (2-5 years)
• **Common Sources**: Major foundations, government agencies, large corporate foundations
• **Application Process**: Comprehensive, often requiring extensive documentation

The Case for Small Grants

Advantages

Lower Barrier to Entry

• Simpler application processes
• Less competition from major organizations
• Fewer requirements for organizational capacity
• Shorter turnaround times for decisions

Diversified Risk

• Multiple funding sources reduce dependency
• Easier to replace if one funder withdraws
• Less catastrophic impact from individual grant losses
• More stable overall funding portfolio

Relationship Building

• Easier to develop personal relationships with funders
• Opportunities to prove your organization's capabilities
• Stepping stones to larger grants from the same funders
• Less formal reporting requirements

Flexibility

• Can fund specific program components
• Easier to align with funder interests
• Less restrictive terms and conditions
• Quicker adaptation to changing needs

Capacity Building

• Good training ground for grant writing skills
• Helps build organizational systems
• Less overwhelming for smaller organizations
• Builds confidence and track record

Disadvantages

Administrative Burden

• High number of applications required
• Multiple reporting requirements
• Different deadlines and requirements to track
• Significant time investment relative to award size

Limited Impact

• May not fund comprehensive programs
• Difficult to achieve significant scale
• Piecemeal approach to problem-solving
• May not attract top talent or resources

Sustainability Challenges

• Constant fundraising required
• Difficulty planning long-term programs
• High turnover in funding sources
• Limited ability to invest in infrastructure

The Case for Large Grants

Advantages

Significant Impact Potential

• Can fund comprehensive, multi-year programs
• Ability to address root causes of problems
• Resources for innovation and experimentation
• Capacity to achieve meaningful scale

Operational Efficiency

• Fewer applications and reports required
• Lower administrative burden per dollar raised
• More time for program implementation
• Reduced fundraising costs as percentage of revenue

Strategic Focus

• Allows for long-term planning and implementation
• Can attract high-quality staff and partners
• Enables investment in organizational infrastructure
• Supports innovation and risk-taking

Funder Relationships

• Deeper partnerships with major funders
• Access to funder networks and expertise
• Opportunities for capacity building support
• Potential for renewal and expansion

Disadvantages

High Competition

• Many qualified organizations competing
• Extensive application requirements
• Long decision-making processes
• High rejection rates

Organizational Risk

• Heavy dependence on few funding sources
• Catastrophic impact if major grant is lost
• Pressure to maintain large programs
• Difficulty pivoting if strategies aren't working

Capacity Requirements

• Need for sophisticated organizational systems
• Extensive reporting and compliance requirements
• Requirement for experienced staff
• Need for strong financial management

Inflexibility

• Restrictive terms and conditions
• Difficulty making program changes
• Long-term commitments that may not align with changing needs
• Pressure to spend money within specific timeframes

Hybrid Approaches

The Portfolio Strategy

Many successful organizations use a mixed approach:

• **Foundation**: 1-2 large grants providing core support
• **Diversification**: Multiple smaller grants for specific programs
• **Innovation**: Small grants for pilot programs and new initiatives
• **Sustainability**: Mix of grant sizes and types

Strategic Sequencing

• Start with small grants to build capacity and track record
• Use success to pursue medium-sized grants
• Leverage medium grants to qualify for major funding
• Maintain small grant relationships for diversification

Factors to Consider

Organizational Capacity

Choose Small Grants If:

• Limited grant writing experience
• Small or volunteer-based staff
• Simple programs and services
• Limited financial management systems

Choose Large Grants If:

• Experienced development staff
• Strong organizational infrastructure
• Complex, multi-component programs
• Sophisticated evaluation and reporting capabilities

Mission and Programs

Small Grants Work Better For:

• Local, community-based programs
• Simple, direct service programs
• Pilot programs and innovations
• Capacity building initiatives

Large Grants Work Better For:

• Complex, multi-site programs
• Research and evaluation projects
• Systems change initiatives
• Comprehensive service models

Risk Tolerance

**Lower Risk Tolerance**: Focus on smaller, diversified grants

**Higher Risk Tolerance**: Pursue larger grants with higher potential impact

Market Position

**Newer Organizations**: Start with small grants to build credibility

**Established Organizations**: Can compete for larger grants based on track record

Best Practices for Each Approach

Small Grant Strategy

1. **Develop Efficient Systems**: Streamline application and reporting processes

2. **Build Relationships**: Invest time in cultivating funder relationships

3. **Track Everything**: Maintain detailed records of all applications and outcomes

4. **Leverage Success**: Use small grant success to pursue larger opportunities

5. **Collaborate**: Partner with other organizations to increase competitiveness

Large Grant Strategy

1. **Invest in Capacity**: Build strong organizational infrastructure first

2. **Research Thoroughly**: Understand funder priorities and requirements completely

3. **Start Early**: Begin relationship building well before applying

4. **Demonstrate Impact**: Have strong evaluation and reporting systems

5. **Plan for Sustainability**: Have clear plans for continuing work after grant ends

Making the Decision

Assessment Questions

1. What is our current organizational capacity?

2. What are our funding needs and timeline?

3. How much risk can we tolerate?

4. What is our competitive position in the market?

5. What do our programs require in terms of funding size and duration?

Strategic Considerations

• **Growth Stage**: Where is your organization in its development?
• **Market Conditions**: What funding opportunities are available?
• **Competitive Landscape**: Who else is competing for these funds?
• **Internal Resources**: What capacity do you have for grant seeking and management?

Conclusion

There's no one-size-fits-all answer to the small vs. large grants question. The best strategy depends on your organization's unique circumstances, capacity, and goals.

Key Takeaways

1. **Most successful organizations use a mixed approach** that balances risk and opportunity

2. **Start where you are** and build capacity over time

3. **Align your strategy** with your organizational capacity and program needs

4. **Be strategic** about which grants to pursue based on fit and probability of success

5. **Build relationships** regardless of grant size—they're the foundation of all successful fundraising

The most important thing is to be intentional about your approach. Whether you choose to focus on small grants, large grants, or a combination of both, make sure your strategy aligns with your mission, capacity, and long-term sustainability goals.

Remember: the best grant is not necessarily the largest one—it's the one that best supports your mission and organizational development while providing the resources you need to create meaningful impact.