Open or closed grant applications: which is right for your grantmaking?

When planning and building your grantmaking program, you might be curious about whether to offer an open or closed application. What’s best for your program? There are certainly advantages to both. 

Below, we go through the benefits and reasons for both open and closed applications, and considerations for each.  

What is an open grant application?

An open grant application, popularly referred to as an unsolicited grant application, is a method of grant application in which applications are submitted to funding organisations without a prior request from the organisation. This grant application method involves the grantseekers, whether individuals or nonprofit organisations, taking active steps to find funding opportunities for their charitable projects. 

Upon identifying funding opportunities aligning with their philanthropic missions, the grantseekers create and submit applications based on the funding organisations’ published guidelines. The guidelines typically include the

• Grant’s focus area
• Eligibility criteria
• Application process
• Dates and deadlines 

These applications typically contain details of their charitable initiatives such as their goals, methods, budget and timeframe. The funding organisation then assesses the various applications to determine the ones that best align with their overall mission and look most promising in terms of impact; those applications are the ones that receive the grants.

Open grants are open to an unfettered pool of applicants; what matters is that they meet the funding organisation’s guidelines. This application method is naturally competitive; so, it’s structured to encourage fairness, transparency, diversity and inclusivity. It’s an efficient way to democratise your grantmaking.          

What is a closed grant application?

A closed grant application is an application method in which the funding organisation limits the grants to select applicants. These select entities can be determined by strict eligibility criteria that applicants must meet to be considered for funding such as geographic location, the nature of the project, the organisation type and the target community.

The applicants can also be selected through invitation. For grants by invitation only, the funding organisation invites a select number of grantseekers to apply for funding. This invitation and selection process is based on the funding organisation’s pre-existing relationship with the potential grantees or based on research and discovery of the grantseeker’s work, reputation and shared goals. The invitees are then expected to submit proposals to demonstrate suitability for the grant. 

Since closed grants have a restricted pool of applicants, the competition for funding isn’t as intense as in the case of open grants. However, such grants usually define how the funds should be used and come with thorough reporting requirements.

Closed grant applications are ideal when grantors want to achieve a specific goal or want to make an impact in a particular geographic location. Also, suppose the funding organisation has specific projects in mind and is keen on ensuring that the funding goes to trusted entities, invitation-only grant applications are the way to go.

This application method guarantees a focused and regulated approach to grantmaking, ensuring that funds are released to charitable initiatives and grantseekers that align with the funding organisation’s intentions.        

Why some grantmakers prefer open grant applications

Here are some reasons why some funding organisations opt for open grant applications.

1. Enhanced diversity and inclusivity

Open grants boost diversity and inclusion in your grant program. Due to their unrestricted application process, entities of different types, whether individuals, nonprofit organisations, community groups or research associations from far and near can apply. Creating the opportunity for a broad range of applicants shows that potential applicants of all backgrounds and perspectives are welcome.  

2. Greater networking opportunities

Open grants present the funding organisations with opportunities to connect with many potential grantees. They can also team up with other like-minded grantors to form alliances that will prove immensely beneficial to all the involved parties.

3. Strong brand building

Open grants can work wonders for your organisation’s reputation. Since they’re designed to improve inclusivity, fairness and transparency, they reflect positively on your organisation and will put your funding opportunity in front of more eyes. 

4. Innovation 

With the diversity of applicants comes a variety of ideas on how to approach the issues the funding organisations want to address. Grantseekers of different experiences and outlooks will likely propose dynamic and diverse solutions in their grant applications.     

5. Community engagement

Open grants help grantmakers attain community engagement. By creating the opportunity for community groups to apply for grants for charitable initiatives, they nurture relationships with the communities they serve. The outcome is a stronger bond and deeper insights for more impactful grantmaking decisions.   

Why some grantmakers prefer closed grant applications

Below are the reasons why some grantors choose closed grant applications. 

1. Better concentration of resources 

With closed grants, grantmakers can concentrate their resources on specific projects that align with their mission. It’s also ideal if the funding organisation wants to focus on issues or areas that have a limited applicant pool so the funds are used for intended purposes.   

2. Alignment and expertise

Funding organisations are often tied to particular social issues or causes, and grantmakers such as family foundations or philanthropists need to align with these causes. 

Closed grant applications can ensure close attention and tight compliance with the donor’s intentions in the long run. Restricting the pool of applicants to those who meet the eligibility criteria guarantees that only grantseekers with the expertise to execute the initiatives are funded.    

3. Prioritisation and continuity 

Grants by invitation only help funding organisations ensure that only trusted grantees or those they’ve supported in the past receive their funding again. If the past collaborations proved successful, invitation-only grants are a good way to eliminate competition and ensure those grantseekers receive the grants again.   

4. Limited resources and administrative ease

Where resources are limited, closed grants might prove preferable to grantors. By focusing on a small number of initiatives, they can maximise their impact within their budget. Also, if the organisation doesn’t have the administrative stamina to deal with an unlimited number of applicants, the predefined and relatively shallower pool offered by closed grants lightens the load of running the grant. 

As you can see, both open and closed grants can be beneficial in their own way. If you’re interested in learning how Good Grants can help you with your application review process, please get in touch or start a free trial today.