Nonprofits are always told to diversify their revenue streams. On its face, this advice makes sense. There’s no question that several sources of income provide better financial security than having a single source. But can all nonprofits successfully pursue diversification?

We’ve begun to notice a pattern among foundations. Whether it’s a real trend or a pattern we observed because of the particular funders we’ve been researching recently, we’re not sure.The pattern is this: We’re noticing that foundations increasingly appear to be moving from an open process—where they solicit grant applications through a published funding opportunity announcement (FOA)—to a closed one, where the foundation screens organizations and then invites a select group to apply for funding.If your organization happens to be one of the invited grantees, this trend could be welcomed news because it means your application will face less competition and already has favored status. The invitation-only system does present challenges though, particularly for nonprofits that lack established relationships with the donor community.

Applying to foundations for funding can take time and effort, but it’s a relatively straightforward process, with lots of existing resources to help nonprofits identify funders and prepare applications. Corporate giving programs tend to get less attention, leading to confusion about how to approach companies for support or whether to approach them at all.

While all nonprofit organizations need to secure funding, there are key differences between small, struggling organizations and large, well-funded organizations other than the obvious difference in size. If your organization is struggling to find money, below are suggestions you can implement to up your grant game. 

Knowing where to look for new grant opportunities is of central importance if your organization depends on grant money to survive. Fortunately, there are many free resources you can use to find open opportunities, some of which will even send you alerts.

How do you know which grants your organization should apply for? To use your limited resources effectively, it's important to pursue only those opportunities that fit your organizational and programmatic capabilities. Pursuing grants your organization is unlikely to win doesn't make sense. On the flip side, some grant opportunities aren't worth applying to--regardless of the odds of winning an award--because of the high cost of project implementation.

Creating a grant strategy involves identifying the funders you want to pursue, and, to the degree possible, specific opportunities of interest from each funding source. Developing a grant strategy also requires insight into your organization. You need to know your organization's long- and short-term goals, its capabilities and resources, and its tolerance for risk. To create a realistic strategy, you also need to be familiar with the general funding environment.

If you are trying to secure grant funding to help launch or sustain an organization or project, you may need bridge funding to cover your expenses while you search for grant opportunities. If you are in this situation, a crowdfunding campaign may be worth exploring

If your organization is based in a developing country, you may not be able to secure funding directly from some foreign donors. While providing funding for projects in developing countries, many donors will only fund projects led by nonprofits headquartered in the same country where the donor itself is located. Instead of receiving funds directly from the donor,  local partners--the organizations located in the country where the project will take place--join the project as subcontractors (or "subs") to a lead organization based in the donor's country.

Researchers depend on grants to fund their work. The largest funders of research are government agencies. Private and corporate foundations also fund research. Although grants awarded by foundations are usually smaller than those awarded by government agencies, foundation grants are almost always easier to apply to, leading to lower opportunity costs.

When it works out, having a grant from a large donor can be a great boon for the organization. Having a single grant of $100K can be easier to manage than four $25K grants. That said, the large-donor strategy has some pitfalls and is not always the best route.