Topic guide
Most community projects are not paid for by one big grant. They are paid for by a patchwork: a little from members and neighbors, some from the city or county budget, a grant from a local foundation, and, for anything involving buildings or land, loans that someone has to repay. Knowing which pieces fit your project at its current stage saves months of chasing money that was never a realistic match.
This guide walks through that matching process in order, starting with what your own group can raise and moving toward public budgets, private funders, and community lenders. The further down the list you go, the more paperwork, accountability, and patience each source tends to require, so it pays to be honest about your group's capacity before you apply.
Before looking for money, write down exactly what you want to do, where, for whom, what it will cost, and who will carry it out. Funders respond to specifics: a number of benches, a named block, a dated timeline, and a budget with real quotes behind it. If your group cannot yet answer those questions, the most useful next step is planning and prioritizing, not applying. Choose one or two projects your members actually agree on rather than a long wish list.
Dues, small events, house or history tours, online campaigns, and asks to individual neighbors and local businesses are the fastest and most flexible money you will ever get. Match the method to the size of the need: a bake sale can cover cleanup supplies, but not a building renovation. Money you raise yourselves also proves local support, which many outside funders want to see before they invest.
Cities and counties fund parks, streets, sidewalks, and facilities through an annual budget and, in many places, a multi-year capital improvements plan. Find out when those are drafted and when the public can comment, then make your request early and with clear numbers. Many local governments also receive federal Community Development Block Grant dollars and must hold public hearings on how to spend them; smaller towns usually reach these funds through a state-run program. A local government can also support a nonprofit directly, ideally under a short written agreement.
Community foundations, local family foundations, and corporate giving programs are often the best first grant makers for a small group, because they care about your place. Write narratives that use concrete numbers and vivid but accurate descriptions, and say how you will know the project worked. If you are starting a new organization, plan for several years of outside operating support before earned income becomes steady, and talk openly with funders about that timeline.
Housing, storefront, and building projects are almost always financed with borrowed money layered with smaller public or philanthropic pieces. That layering, and the order in which each source gets repaid if something goes wrong, is called the capital stack. Community development financial institutions (CDFIs) are mission-driven lenders certified by the U.S. Treasury that often lend where conventional banks will not; find out which ones serve your area before you design the deal.
Tax increment financing, tax abatements, tax credits, and special assessments are common ways governments help pay for development. They can be useful, but they also commit future public revenue, so ask who benefits, for how long, and what the community gets in return. Being able to ask those questions clearly makes you a stronger partner and a sharper watchdog.
Questions to bring
What changes where you live
Almost every money source in this guide depends on location. Each state sets its own rules for tax increment financing, special assessments, and whether local governments may lend to or grant money to private nonprofits. States run their own CDBG programs for smaller communities with their own application cycles, and many states offer housing, historic, or other tax credits that differ widely. Rules for charitable raffles and gaming events, charitable solicitation registration, and incorporating a nonprofit are also set by the state. To find the controlling rule, start with your city or county finance or community development office, your state's community development or commerce agency, your state attorney general's charities section, and your state association of nonprofits.
Current national resources
U.S. Department of Health and Human Services (federal grants portal)
U.S. Department of Housing and Urban Development
CDFI Fund, U.S. Department of the Treasury
Candid
National Council of Nonprofits
From the library
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Guide · Organizations & leadership
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Visitor question · Economic & rural development
Visitor question · Economic & rural development
Visitor question · Economic & rural development
Visitor question · Environment, transportation & sustainability
Guide · Organizations & leadership
Guide · Organizations & leadership
Guide · Planning, zoning & codes
Guide · Organizations & leadership
Original guidance from A Good Community: How to Make and Keep It, owned and edited by Nancy Thompson (formerly Useful Community Development), shared with permission. Community Compass notes and updates are our own and have not been reviewed by Nancy Thompson.
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