Cindy Adams is the president and CEO of GrantStation, one of TechSoup's donor partners, and is an expert on nonprofit grantseeking and fundraising. She is guest blogging for TechSoup on the current state of grantseeking for different types of organizations. Read her first post on the overall state of grantseeking and watch for more to come soon!

Current economic conditions present specific challenges to the grantseeking efforts of organizations focused on community improvement and capacity building. In a recent survey of nonprofit organizations in the United States, we learned more about where these types of nonprofits get their funding and where they find challenges to meeting the needs of their communities.

Community Improvement and Capacity Building: Fewer Grant Awards

Community improvement and capacity building-focused organizations comprise 4.6% of nonprofit organizations in the United States and 5.2% of survey participants cited in the State of Grantseeking 2011 (published in November 2011 by GrantStation and PhilanTech).

According to the State of Grantseeking 2011 responses, community improvement and capacity building -focused organizations (CICB) receive more awards from private foundations than from any other grant source. However, compared to other organizations, CICB-focused organizations receive fewer awards from all sources, including private foundation grants (54% vs. 76%), community foundation grants (48% vs. 61%), and corporate grants (42% vs. 55%).

Fewer Resources Hurt Most

The most frequently cited challenge was the reduction in resources (staff and time). The time involved in searching for the right funding sources and the time involved in developing competitive grant proposals can be a killer combination for organizations of any type, but seems to plague community development organizations.

As always, if you use staff time to try to secure grant awards, staff have to leave behind their daily duties. And that is not always an option when your organization is running on fumes.

But despite the stated challenges, CICB nonprofits (just like in the arts) retain a sense of optimism about the next six months with 71% of CICB-focused organizations noting that they predict receiving the same number or more grant awards during this period. Again, I wonder if this is a foretelling, or left-over commitments.

Private Foundations Play a Bigger Role

Interestingly, the top sources of grant funding for CICB-focused organizations were private foundations (54%), community foundations (48%), and corporations (42%). CICB-focused organizations also listed local (33%), state (40%), and federal government (35%) grants as funding sources.

While I am not surprised at the amount of government support, I am somewhat surprised at the reliance of this group on funding from foundations and corporate giving programs. I have worked in the area of community and economic development for many years, and this is a definite change from how things were, say, 10 years ago. At that time, most community and economic development groups seldom applied for funding from any private source, with the exception of small general operating or perhaps conference underwriting from local and regional businesses.

True to form, federal government grants are the source of the largest awards for CICB-focused organizations (26%), followed by private foundation grants (24%) and local government grants (13%). But you can see the level has changed with private foundations playing a much more significant role.

Diversifying Sources Is Healthy

I actually think these new trends in grantseeking for community and economic development organizations are extremely healthy. We have a visioning tool on GrantStation (if you are a member you have access to this interactive tool) called Grants2020. That tool can help you determine your own organization’s breakdown when it comes to grants (i.e. what percentage of your budget comes from what source and what does that mean for your organization).

If you are a community organization, I strongly encourage you to look at diversifying your grants income for 2012 and 2013. There are many new options for the work you are doing, and now, I believe, is the time to take advantage of those opportunities. If you would like a copy of the survey details for CICB organizations, please email cadams@grantstation.com.