First-Time Federal Grant Tips for Small Nonprofits

August 11, 2025 · 6 min read

TJ Jackson

Nobody in my organization had ever applied for a federal grant when I decided we should go for one. We were a small 501(c)(3) in rural Alabama with about four staff members, an annual budget that had just crossed $200K, and a community that desperately needed water infrastructure improvements. The gap between where we were and what a federal application seemed to require felt enormous.

That was several years ago. Since then, we have successfully delivered USDA-funded projects and grown our budget to over $800K annually. But I still remember the confusion, the jargon, and the feeling that the federal grants world was built for organizations much larger than ours.

It was not. And this post is everything I wish someone had told me before I started.

Before You Apply: The Foundation You Need

Get Registered on SAM.gov

Every federal grant requires an active registration on SAM.gov. This is the federal government's System for Award Management. You need a Unique Entity ID (UEI), which replaced the old DUNS number in 2022.

Here is what to do right now:

Go to SAM.gov and create a Login.gov account
Request your UEI (this is free)
Complete your entity registration
Set a calendar reminder to renew annually

The whole process can take up to four weeks, so start this today -- even if you are not planning to apply for months. There is no fee, and having an active registration opens the door to every federal funding opportunity.

Register on Grants.gov

Grants.gov is where most federal agencies post their funding opportunities and where you will submit applications. Your organization needs an account, and you need to designate an Authorized Organization Representative (AOR) who can officially submit on your behalf.

Know Your Indirect Cost Rate

Here is something that tripped me up early on: federal grants allow you to charge indirect costs (overhead like rent, utilities, and admin support), but you need to know your rate. If you have never had a federal grant before, you almost certainly do not have a federally negotiated indirect cost rate. That is fine.

Under the 2024 updates to the Uniform Guidance, any organization without a negotiated rate can elect the de minimis rate of 15% of modified total direct costs. This is a significant increase from the old 10% rate, and you do not need to provide documentation to justify it. Just elect it in your budget and apply it consistently across all your federal awards.

Choosing the Right Grant to Apply For

This is where most first-time applicants make their biggest mistake: they apply for the wrong grant.

Match Your Capacity to the Opportunity

Federal grants range from $25,000 to tens of millions. As a first-time applicant, you want to find opportunities that match your current organizational capacity. A few programs that work well for smaller organizations:

USDA Community Facilities Grants: Covers 15-75% of project costs for essential community facilities in rural areas (populations under 20,000). Your state USDA Rural Development office will walk you through the process.
EPA Environmental Justice Small Grants: Awards up to $100,000 for community-driven environmental and public health projects. The program has funded over 1,500 community-based organizations since 1994.
USDA Rural Community Development Initiative (RCDI): Funds intermediary organizations that provide technical assistance and training to small nonprofits and rural communities.
USDA Water and Waste Disposal Grants: Specifically for rural communities with populations of 10,000 or fewer. This is the only federal program exclusively focused on rural water and waste infrastructure.

Read the NOFO Carefully

NOFO stands for Notice of Funding Opportunity. This is the document that tells you everything about the grant: who is eligible, what activities are funded, how applications are scored, what documentation you need, and when the deadline is.

I cannot stress this enough: read the entire NOFO before you decide to apply. Highlight the eligibility criteria and the scoring rubric. If your project does not clearly align with what the funder is looking for, it is better to wait for a more suitable opportunity than to submit a weak application.

Writing Your First Proposal: A Practical Checklist

When you are ready to write, here is a checklist I use for every federal application.

The Essentials

Need statement: What specific problem does your project address? Use local data -- census numbers, health statistics, community surveys. Reviewers respond to specificity, not generalities.
Project narrative: What exactly will you do, step by step? Who will be served? What will change? Be concrete.
Organizational capacity: What experience does your team have? Even if this is your first federal grant, you have managed other projects. Highlight that.
Budget and budget justification: Every line item needs a clear explanation. Do not pad the budget, and do not underestimate costs. Reviewers can tell.
Timeline: Show that you have a realistic plan for completing the project within the grant period.
Letters of support: Get them from community partners, local government, and the people who will benefit from the project.
Evaluation plan: How will you measure success? Define clear, measurable outcomes.

Common Mistakes That Kill Applications

Missing the deadline. Federal deadlines are absolute. If Grants.gov says 11:59 PM Eastern on March 15, your application must be submitted before that timestamp. There are no extensions and no exceptions. Submit at least 48 hours early in case of technical issues.

Ignoring the scoring criteria. Your proposal is scored against specific criteria listed in the NOFO. Structure your narrative to address each criterion directly. If the rubric allocates 25 points to "community need," make sure your need statement is thorough and data-driven.

Underestimating the budget process. A vague budget signals that you have not thought the project through. Break costs into detailed line items. Get real quotes from vendors. Include fringe benefits for staff time. Account for your indirect costs.

Skipping the pre-application contact. Many agencies -- USDA Rural Development in particular -- strongly encourage or even require pre-application discussions with program staff. This is not a formality. These conversations can tell you whether your project is competitive and what to emphasize in your application.

After You Submit: What Happens Next

Federal grant review processes typically take three to six months. During that time:

Stay accessible. Program officers may contact you with questions or requests for additional information. Respond promptly.
Keep your SAM.gov registration active. If it expires during the review period, your award could be delayed or jeopardized.
Continue building organizational capacity. Whether you receive this particular grant or not, the work you did to prepare the application makes your organization stronger for the next one.

If your application is not funded, many agencies will provide reviewer feedback. Read it carefully. Some of the best proposals I have submitted started as rejected first attempts that we revised and resubmitted.

You Are Not Too Small for Federal Funding

The biggest lie in the nonprofit world is that federal grants are only for large, established institutions. Programs like USDA Rural Development and the EPA Environmental Justice Small Grants exist specifically because the federal government recognizes that small, community-based organizations are often the most effective at addressing local needs.

Our foundation started with three people and a conviction that rural Alabama communities deserved better infrastructure. Federal funding did not just fund our projects -- it validated our work and opened doors to additional partnerships and resources.

If your community has a need and your organization has the commitment to address it, you are ready to apply.

If you are applying for your first federal grant, tools like Granted can help walk you through the process -- from understanding the RFP to putting together a complete proposal.

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