Why donors are better than grants
- Apr 7, 2016
- 3 min read
Updated: Mar 25
Grants are key sources of funding, and you should write them. However, in this video, learn an important principle that highlights why donors can be so much more valuable than grants.
Why donors are better than grants
Here's the article, but you can also watch the video of this article. Click the link above.
Let me start with a question that seems obvious on the surface:
If raising money from donors is one of your income channels, you’d want more donors… right?
Yes—but not just for the reason you think.
Hold that thought for a moment. Let’s take a quick detour.
The Hidden Limitations of Grant Funding
Do you write grants to raise money? Most nonprofits do—and they should.
Grants can be a valuable source of funding. But they come with real limitations:
Most grant funding lasts only 1–2 years.
Grants often require a huge investment of time and energy to write and manage.
There’s often disappointment after weeks of work when a grant doesn’t get funded.
Grants are helpful—but they are rarely sustainable on their own.
Now, let’s come back to donors.
Why Donors Matter More Than Money
Do you know why I love raising money from donors?
Because donors provide far more than cash.
Donors can also bring:
Time – volunteering to support programs.
Subject Expertise – improving operations, strategy, and systems.
Influence – opening doors and making key community connections.
Advocacy – serving as mission ambassadors in the community.
Energy – igniting passion and generosity that inspires others.
No grant can do all of that.
The Long-Term Power of Donor Relationships
Here’s another key difference between donors and grants:
If a donor becomes passionate about your mission, they may:
Give for 5, 10, or even 20 years!
Increase their giving over time.
Make an estate or legacy gift that supports your organization for decades.
That’s a far cry from a one-year—or one-and-done—grant.
This is the point most nonprofit leaders miss.
Why More Donors Means More Resources
The real reason you want to continually find and retain more donors—from $50 donors to $50,000 donors—isn’t just to raise more money.
It’s to create more resources for your nonprofit.
More donors mean:
More relationships.
More skills.
More influence.
More sustainability.
More long-term impact.
This insight fundamentally changed how I ran my first nonprofit—and it became one of the core principles that helped me build a series of gold-standard organizations.
What It Takes to Build a Standout Nonprofit
If you want to:
Build a high-performance nonprofit.
Raise more money.
Increase your organization’s impact.
Then you must commit to:
Finding donors of all sizes.
Engaging them meaningfully.
Retaining them through exceptional donor stewardship.
Treating them like partners, not transactions.
Is that a tall order? Absolutely.
But it’s also the path to long-term success.
Key Takeaways
Grants are helpful and you should write them, but they are "limited."
Donors provide FAR more than money and value, long-term.
Long-term donor relationships create sustainability.
More donors = more resources.
More resources = more impact.
Summary
Donors are better than grants! . . .
When you invest in building and retaining donors, you’re not just increasing revenue—you’re building the foundation for long-term success.
More donors lead to more access. More access leads to more impact. And yes, along the way, you’ll probably raise more money than you ever imagined.
Tom Iselin
Rated One of America’s Best Board Retreat
and Strategic Planning Facilitators
About the Author
Tom Iselin is recognized as one of America’s leading authorities on high-performance nonprofits. He has built nine sector-leading nonprofits and two software companies, written six books, sits on multiple boards, and has been rated one of America’s Best Board Retreat and Strategic Planning Facilitators. His work on nonprofit strategy, board leadership, and culture has been featured on CNN, Nightline, and in Newsweek.
Tom is the president of First Things First, a firm specializing in board retreats, strategic planning services, fundraising strategy, and executive coaching for nonprofit CEOs.
Board Retreats & Strategic Planning
If you’re looking for a board retreat facilitator or strategic planning facilitator who has been in the trenches and understands real-world nonprofit challenges, Tom can help your board gain clarity, build alignment, and create an actionable plan that improves performance and impact. His sessions propel organizations to the next level of performance and impact . . . and they're fun!
Board Retreats and Strategic Planning Services:
858.888.2278
