Individual gifts and grants run on different clocks. Pursued in the right order, each one makes the other stronger.
Ask a new nonprofit, or a program that has chosen fiscal sponsorship, how it plans to fund its work, and the answer is almost always the same: grants.
It's an understandable instinct. Grants are visible, they can be substantial, and a single award can carry a program for an entire year or longer. What many new organizations don't realize is that individual giving is every bit as important as grants, and for a new program or project, it often matters more. The national numbers agree: according to Giving USA, individuals gave 64 cents of every charitable dollar in the U.S. in 2025.
There is no single funding formula that works for every nonprofit project. Some programs, such as grant-funded research or public-service initiatives, may operate entirely on grants. Others, like grassroots community projects supported by local donors, may rely exclusively on individual gifts. Most fall somewhere in between, combining grants and individual donations in proportions that reflect their mission, needs, and stage of development.
Grants can deliver a big payoff. Individual gifts often build the foundation that makes those grants possible.
A grant runs on someone else's calendar. First, you have to confirm you're eligible. Many funders accept applications only from 501(c)(3) public charities, which is one reason new programs turn to a fiscal sponsor. Next, you have to find a grant that is open for applications at the moment you need funding. Then you have to meet every one of its requirements. Once you submit, your proposal is compared with many others. You may be interviewed. You may make the short list. Then another committee reviews the finalists and decides on the awards. Months can pass between your first draft and your first dollar.
The wait is often worth it. Grants can make substantial, longer-term investments possible: sustained staffing, equipment, and program evaluation. An award also carries weight. It tells everyone watching that a funder vetted your work and chose to invest in it.
But winning a grant and having money you can freely spend are two different things. Grant funds may be restricted to specific activities, with limited support for the administrative work needed to deliver them. When funders repeatedly finance programs without adequately covering the administrative costs behind them, nonprofits can get caught in the nonprofit starvation cycle: their programs receive funding, but the organizations themselves remain chronically under-resourced.
Some grants reimburse expenses only after the organization has paid them, creating cash-flow challenges. Reporting, compliance, and communication with funders also take staff time.
Individual giving, whether through direct appeals, online campaigns, or fundraising events, runs on your time clock. You can start with the people closest to you: friends, family, colleagues, and anyone inclined to support missions and programs like yours. You decide when and what to ask for. And because each of those audiences knows you differently, you can market to each one with a unique message and ask.
Individual gifts can arrive more quickly, and many come without restrictions on how the money is used. But building a donor base takes time, and keeping those relationships strong requires regular communication and follow-up. Individual gifts can also be restricted to particular purposes. The advantage is not that individual giving takes less work, but that you can begin building support without waiting for the next grant cycle.
Individual giving is your proof of concept, and it does three jobs at once.
It stress-tests your operation. Can you receive a gift, thank the donor quickly, and show them what it made possible? Better to find the gaps now, while the stakes are small.
It tests your message and your ask. You'll learn which stories move people, which words fall flat, and how your request lands with a real person across the table. That feedback arrives in weeks, not grant cycles.
It proves your community is behind you. Every gift is a vote of confidence from someone outside your own team. Together, those votes become the evidence grantmakers and major donors look for.
Here is where the two streams meet. Grantmakers want to know your community stands behind you, and robust individual giving is proof that it does. When a reviewer sees that dozens or hundreds of people have already invested in your mission, your application stops reading like a promise and starts reading like a track record.
Major donors look for the same signal. Few people want to be the first to make a large gift. Many are glad to join something that is already working.
Grant reviewers also want to see a realistic budget, clear outcomes, and the capacity to manage and report on every dollar. An individual giving campaign builds all three. It forces you to price your program, define what success looks like, and put tracking systems in place before a funder ever asks.
Here’s how the two funding streams reinforce each other, and why the order matters. Individual gifts sharpen your message and demonstrate community support. That support strengthens your grant applications and opens the door to major donors. Grants and major gifts then give you the capacity to reach even more people. Each stream feeds the next.
And the payoff runs in both directions. A grant award is news worth sharing with the donors who have supported you. Their gifts can also help attract additional funding. Some funders offer matching grants, adding a dollar for every dollar raised from individual donors, up to an agreed limit. A $20,000 matching commitment, for example, can turn $20,000 in individual donations into $40,000 for the program.
The takeaway is simple: don't wait for a grant to start building support. Make a list of the people you can approach now, set a modest goal, and learn from their responses. That early support can strengthen your grant applications and conversations with major donors.
At Group 36, we work with programs at every stage of this cycle through fiscal sponsorship, grant administration, and fundraising consulting. If you're launching a new program and want a funding plan that doesn't rest on a single application, let's talk.
About the Author
Shelly St John is a senior nonprofit brand strategist for Group 36 and nonprofits nationwide. Over 20 years, her companies The Auction Divas and Primary Objective have helped charities raise more than $148 million.
