Grants To Pay Nonprofit Employees: A Comprehensive Guide

Most nonprofits rely heavily on grants and donations to fund their operations and payroll. Securing grant funding to pay employees can be challenging but is possible with the right strategies. This comprehensive guide will walk through everything you need to know about getting grants to cover nonprofit staff salaries and benefits.

If you’re short on time, here’s the quick answer: Grants from government agencies and private foundations can help nonprofits pay for employee salaries and benefits. The key is finding grants that align with your mission and require funds to be spent on personnel.

Maintaining strong relationships with funders and showing how staffing relates to impact are also critical.

Understanding Allowable Uses of Grant Funds for Personnel Expenses

When it comes to utilizing grant funds for personnel expenses, it is crucial for nonprofit organizations to understand the allowable uses. This ensures that the funds are used in accordance with the grant guidelines and regulations. Here are some key areas to consider:

Salaries and Wages

One of the primary uses of grant funds for personnel expenses is to cover salaries and wages of nonprofit employees. This includes the compensation for individuals directly involved in carrying out the organization’s mission, such as program coordinators, project managers, and support staff.

It is important to note that grant funds should be used to pay for reasonable and necessary salaries and wages, based on market rates and job responsibilities.


In addition to salaries and wages, grant funds can also be used to provide benefits to nonprofit employees. These benefits may include health insurance, retirement plans, paid time off, and other employee perks.

Nonprofit organizations should ensure that the benefits offered are competitive and align with industry standards. It is essential to keep accurate records and documentation of the benefits provided using grant funds.

Administrative Staff

Grant funds can also be allocated towards administrative staff who support the overall operations of the nonprofit organization. This includes roles such as executive directors, finance managers, human resources personnel, and IT support staff.

These individuals play a critical role in ensuring the smooth functioning of the organization and are vital to its success. Grant funds can be used to cover their salaries and benefits, as long as they contribute directly to the organization’s programs and goals.

It is important for nonprofit organizations to carefully review the grant guidelines and consult with the grant provider to ensure that the use of funds for personnel expenses complies with all regulations.

By understanding the allowable uses of grant funds, nonprofits can effectively manage their personnel expenses and maximize the impact of the grants they receive.

Types of Grants that Can Fund Staff Salaries

Government Grants

Government grants are an excellent source of funding for nonprofit organizations looking to cover staff salaries. These grants are typically provided by federal, state, or local government agencies and are designed to support various social causes.

Nonprofits can apply for government grants through specific programs that align with their mission and objectives. These grants can be highly competitive, with a rigorous application process, but they offer substantial financial support if successful.

It is important for nonprofits to thoroughly research and understand the eligibility criteria and requirements for government grants before applying.

Foundation Grants

Foundation grants are another valuable option for nonprofits seeking funding for staff salaries. Foundations are privately funded organizations that provide grants to support a wide range of charitable activities.

These grants can come from family foundations, corporate foundations, or community foundations. Nonprofits can find foundation grants that align with their mission by researching foundations that have a focus on their cause or field of work.

Many foundations have specific grant programs dedicated to supporting nonprofit organizations and their staffing needs. Nonprofits should carefully review the guidelines and requirements of each foundation before submitting a grant proposal.

Corporate Grants

Corporate grants are grants provided by businesses and corporations to support nonprofit organizations. These grants can be a great source of funding for staff salaries, as many corporations have philanthropic initiatives and programs to give back to their communities.

Nonprofits can explore corporate grant opportunities by researching companies that have a history of supporting causes related to their mission. Some companies may also offer employee matching programs, where they match donations made by their employees to eligible nonprofits.

Nonprofits should reach out to corporate grant programs and establish relationships with companies that share their values and goals.

Where to Find Grants for Nonprofit Personnel Expenses

When it comes to funding nonprofit personnel expenses, grants can be a valuable resource. Here are some places where you can find grants specifically for paying nonprofit employees:

Government Grant Databases

Government grant databases are a great starting point for finding grants to cover nonprofit personnel expenses. Websites like and provide a comprehensive list of grants available from various government agencies.

These databases allow you to search for grants based on your organization’s specific needs and eligibility criteria. It’s important to carefully review the requirements and deadlines for each grant opportunity.

Foundation Directories

Foundation directories are another useful resource for finding grants to pay nonprofit employees. These directories, such as Foundation Directory Online, provide information on grants offered by private foundations.

You can search for grants based on your organization’s location, mission, and funding needs. It’s important to thoroughly research each foundation and understand their funding priorities before applying for a grant.

Corporate Giving Programs

Many corporations have giving programs that provide grants to nonprofit organizations. These programs often include funding for personnel expenses. It’s worth researching corporations that align with your organization’s mission and values.

Corporate websites and annual reports are good places to start. Some corporations also have dedicated foundations that provide grants. It’s important to tailor your grant proposals to match the corporation’s giving priorities.

Your Existing Funder Network

Don’t forget to tap into your existing funder network. Reach out to foundations, corporations, and individual donors who have previously supported your organization. They may be willing to provide grants specifically for personnel expenses.

Building strong relationships with funders is key to securing ongoing support for your nonprofit.

Remember, when applying for grants, it’s important to carefully follow the application instructions and provide a compelling case for why your organization needs funding to cover personnel expenses. Good luck!

How to Align Grant Applications with Personnel Funding Needs

When applying for grants to pay nonprofit employees, it is crucial to align your grant applications with your personnel funding needs. This ensures that you are able to secure the necessary funds to support your staff and further your organization’s mission.

Here are some key strategies to help you effectively align your grant applications with your personnel funding needs:

Connect Staffing to Your Mission and Programs

One way to align your grant applications with personnel funding needs is to clearly demonstrate how your staffing supports your organization’s mission and programs. Highlight the roles and responsibilities of your employees and explain how their expertise contributes to the success of your initiatives.

By making this connection, funders will understand the importance of investing in your staff and be more inclined to provide funding for personnel expenses.

Break Down Salaries and Benefits in Your Budget

When preparing your budget for grant applications, it is essential to accurately break down salaries and benefits. Provide a detailed breakdown of each staff position, including their salary, benefits, and any other related costs.

This transparency shows funders that you have carefully considered the financial aspects of your personnel needs and have a clear plan for utilizing grant funds. Additionally, it helps funders understand how their contribution will directly support your employees.

Document the Need Through Strong Proposals

In order to effectively align your grant applications with personnel funding needs, it is crucial to document the need for additional funding through strong proposals. Clearly articulate the challenges or gaps in your current staffing structure and explain how additional personnel resources will address these issues.

Support your claims with data, testimonials, or case studies that demonstrate the impact of investing in your employees. This evidence will strengthen your case and increase the likelihood of securing grant funding for personnel expenses.

Remember, aligning your grant applications with your personnel funding needs is essential for successfully securing funds to support your nonprofit employees. By connecting staffing to your mission and programs, breaking down salaries and benefits in your budget, and documenting the need through strong proposals, you can effectively demonstrate the importance of investing in your staff and increase your chances of receiving the necessary funding.

Maintaining Compliance with Grant Requirements for Payroll

When it comes to using grants to pay nonprofit employees, it is crucial to maintain compliance with the specific requirements set forth by the grant provider. This includes following guidelines for allowable pay rates, keeping detailed time and effort records, and adhering to reporting and documentation rules.

Understanding Allowable Pay Rates

One of the key aspects of maintaining compliance with grant requirements for payroll is understanding what constitutes an allowable pay rate. Different grants may have specific restrictions on the maximum salary that can be paid to employees.

It is important to review the grant’s guidelines or consult with the grant provider to ensure that the nonprofit organization is in compliance with these restrictions.

Additionally, some grants may require that a certain percentage of the grant funds be allocated towards employee salaries. This may be outlined as a minimum or maximum percentage, depending on the grant.

Nonprofit organizations should carefully review the grant requirements to ensure that they are allocating the appropriate amount of funds towards employee compensation.

Keeping Detailed Time and Effort Records

Another essential aspect of maintaining compliance with grant requirements for payroll is keeping detailed records of employee time and effort. This includes accurately tracking the hours worked by each employee, as well as documenting the specific tasks or projects they are working on.

These records are important for demonstrating that the grant funds are being used appropriately and in line with the grant’s objectives.

Keeping detailed time and effort records can also help nonprofit organizations when it comes to reporting and documentation. Accurate records make it easier to provide the necessary information required by the grant provider, ensuring transparency and accountability.

Following Reporting and Documentation Rules

Grant providers typically require regular reporting on how the funds are being used, including payroll expenditures. It is important for nonprofit organizations to familiarize themselves with the reporting and documentation rules outlined by the grant provider and ensure compliance with these requirements.

Some grants may require monthly or quarterly reports, while others may have specific templates or formats that need to be followed. Nonprofit organizations should establish clear processes for collecting and organizing the necessary information to make reporting as smooth as possible.

It is worth noting that failure to comply with grant requirements for payroll can have serious consequences, including the potential loss of grant funding. Therefore, it is essential for nonprofit organizations to prioritize compliance and stay updated on any changes or updates to the grant’s guidelines.


Securing grants to cover nonprofit personnel costs takes research, relationship building, and conveying your impact. But with persistence and strategic grantseeking, it is possible for organizations to fund staff salaries through grants.

This allows nonprofits to expand their capacity, compensate employees fairly, and further their mission through quality programs and services. By following grant guidelines, telling your story, and aligning your needs with funder priorities, your nonprofit can access the support it needs to pay hardworking staff.

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