The Wonderful World of Mini-Grants: Who’s Giving Them and Why?

photo:  mikeledray/shutterstock

photo:  mikeledray/shutterstock

Editor's Note: This article was originally published on October 2, 2017.

Journalists who write about the world of philanthropy are frequently lured in by the newsworthy multi-million-dollar grants that make the biggest waves, while nonprofit executives and development staff tend to focus a lot of attention on chasing five-figure and low six-figure grants. 

But if you drill down into the daily practice of foundation grantmaking, especially at the local level, you'll find a very different species of grant at the other side of the spectrum—and one that's thriving: mini-grants!

What are mini-grants, exactly? There's no official definition and it often depends partly on who's giving them. Some mini-grants are more, well, mini than others. But generally, we're talking about grants under $2,500, and often in the range of $250 to $1,000.

Quite a few funders embrace mini-grant giving and it's not necessarily because they don’t have other options. It's common to find funders, especially at the local level, who make plenty of mini-grants while also moving larger amounts of money out the door. And both grantmakers and grantseekers can find something to love in mini-grants, starting with their simplicity and accessibility. 

Community foundations are among the biggest funders of mini-grants. Discretionary funds often only make up a small percentage of a community funder’s assets under management, so mini-grants are a good way to connect with as many local nonprofits as possible. For example, the Solano Community Foundation in California offers up to $2,500 to support nonprofit staff members looking to pursue professional education and training.

Many corporate funders love mini-grants, too, because this is a way to spread lots of money around and curry goodwill in the many communities in which they operate. To pick one example out of the air, the Bank of America Charitable Foundation gives out a blizzard of mini-grants every year all around the United States. It gives out so many such grants—which are often made at the direction of local employees and branch managers—that the foundation's 2015 990 tax form runs to around 2,600 pages, with plenty of grants on the list that are $100 or less. The Walmart Foundation is another corporate funder that gives numerous grants every year for $1,000 or less toward communities where the retailer has stores. 

Meanwhile, though, both of these foundations also give out substantial grants that are awarded as part of strategic grantmaking programs. 

Major private foundations with national programs are the least likely to give out mini-grants. For example, if you peruse the Robert Wood Johnson Foundation's grants database—which goes back to 1972 and includes around 25,000 grants—you'll find that fewer than 15 grants were awarded for under $2,000 over that entire period. Top grantmakers in the country often don't give mini-grants because, frankly, they don’t have to. With millions in the budget and billions in assets, mini-grants can seem insignificant in the grand scheme of things.

That said, sometimes, major foundations with national and even global programs also give mini-grants as a way to be supportive of what's happening in their local community. The Bill and Melinda Gates Foundation is a case in point. Last year, this giant funder made quite a few grants of $2,500 or less, including a bunch for $500. If you look closely at the MacArthur Foundation's grants list, you'll see something similar. Even as this foundation sends major funds to places like Nigeria, it supports a lot of things happening in Chicago, including with grants of $1,000 or less. Mini-grants from MacArthur also flow to nonprofits outside its home city, including to some major organizations, which suggests that program officers will often use such grants to cover this or that extra expense that comes up for their grantees. You'll see the same pattern elsewhere. 

Local funders with education missions are huge providers of mini-grants, which tend to flow in the form of scholarship money to needy college or independent school students. Interestingly, health insurance foundations have also emerged as prominent funders of mini-grants. The Blue and You Foundation is a health insurance funder that is the philanthropic arm of Arkansas Blue Cross and Blue Shield and wholly funded by Arkansas Blue Cross. This foundation recently awarded a record-breaking 242 new mini-grants to local community projects. The grants were $1,000 each, and were scattered around to groups in South Arkansas.

“These mini-grants are used to fund such things as health fairs, exercise or healthy eating programs, community gardens, health education or the purchase of automated external defibrillators (AEDs) for use in public buildings,” said Patrick O’Sullivan, executive director of the Blue & You Foundation about the new batch of mini-grants.

Some health funders also give grants to help individuals with medical expenses. Such grantmaking is part of a larger funding universe that doesn't get much attention, which is emergency financial support for needy families or individuals, including seniors or those with disabilities. 

Although obviously smaller in size, one benefit of mini-grants is that they tend to go toward needs that are otherwise overlooked or denied by funders. Direct support for individuals is an example of that. Equipment purchases and building repairs are another. Lots of foundations refuse to cover such needs as a part of their normal grantmaking strategy. But mini-grants tend to have fewer strings attached and fewer hoops to jump through. Such grants also commonly address occasional and seasonal needs, like the summer youth program mini-grants offered by the Richmond Community Foundation.

Another perk of mini-grants is a simpler application process. This means that mini-grants don’t put as much of a strain on nonprofit foundation staff members. That mini-grants tend to have a very local focus also makes them more accessible to nonprofits that don’t have the time or resources to compete with large and well-staffed charities. Mini-grants are more likely to reach the very smallest nonprofit organizations or the newest ones, since they're often welcoming to first-time applicants. While certain rules still apply, funders get a little more liberal with these small awards, and are sometimes willing to step outside their comfort zones in unexpected ways.

All in all, mini-grants have an important place in the world of philanthropy, even though you don't hear much about them. Bigger isn’t always better when it comes to grantmaking.