Key Term

What is Grantmaking?

Definition

Grantmaking is the organized process by which foundations, corporations, governments, or other entities provide financial support (grants) to nonprofit organizations, individuals, or other entities to carry out specific charitable, scientific, educational, or cultural purposes. This process typically involves establishing funding priorities, reviewing applications, conducting due diligence, making award decisions, and monitoring the use of granted funds.

Significance

Grantmaking is fundamental to the philanthropic sector as it serves as the primary mechanism for distributing charitable resources to address social needs and create positive change. It enables donors and foundations to strategically support causes they care about while ensuring accountability and impact measurement. Effective grantmaking practices help maximize the social return on philanthropic investments, foster innovation in the nonprofit sector, and create sustainable solutions to community challenges. Understanding grantmaking is crucial for both donors who want to make informed giving decisions and nonprofits seeking funding to support their missions.