Grants vs. Contracts

The money your nonprofit isn’t competing for

Every year, government agencies (counties, cities, states, housing authorities, health departments) buy human services the same way they buy road repairs: through competitive procurement. Case management. Youth programming. Community outreach. Reentry support. Workforce navigation. These aren’t grants. They’re contracts, and they behave differently in three ways that matter:

Contracts recur. A grant funds a project and ends. A contract funds delivery, often with renewal years built in. Organizations that cross over from grants to contracts stop refundraising their existence every twelve months.

Contracts pay for the work, not the idea. Grant reviewers fund promise. Procurement evaluators buy performance. That’s harder to win the first time, and far more durable once you do.

Contracts are scored, not judged. A foundation may decline you for reasons you’ll never learn. A public solicitation publishes its evaluation criteria, usually with the point values attached. You can literally read how you’ll be graded before you write a word.

RFP vs. RFQ: the two doors

An RFP (Request for Proposals) is how agencies buy complex services. You’re evaluated on a weighted mix: typically technical approach, past performance, key personnel, and price. The agency is asking: can you do this, have you done it before, who will do it, and what will it cost?

An RFQ usually means Request for Quotes: price-led buying for a defined scope, where the specs are set and the sharpest compliant number wins. But in many jurisdictions it means Request for Qualifications: a pre-screening round where agencies build a pool of qualified vendors and only pool members receive the actual RFPs later. Qualification pools are the single most underrated entry point for organizations new to public contracting: you’re scored on your qualifications and references, not on a decades-long contract history.

What evaluators actually score (and where nonprofits stumble)

Before anyone scores anything, there’s a compliance check: did you answer every requirement, include every form, respect every page limit? Miss one mandatory item and your proposal can be disqualified before a human reads your narrative. This is where most first-time bidders lose: not on quality, on completeness.

Survive compliance, and the weighted scoring begins. The heavyweight criterion is almost always past performance: documented, referenced proof you’ve delivered comparable work. Here’s the part most nonprofits don’t realize: you already have the raw material. Every program you’ve run with attendance records, participant outcomes, and a partner willing to take a reference call is a past performance record waiting to be written. The organizations that win aren’t necessarily the ones that did the best work. They’re the ones that can prove their work in the format procurement requires.

The readiness checklist

Before your first bid, you’ll want: current vendor registration in the jurisdictions you’ll bid in · insurance certificates (general liability at minimum; professional liability for service contracts) · two or three written past performance records with consenting references · key personnel bios · your most recent 990 or audit · and the capacity to prepare a sealed cost proposal. That’s the file. Build it once, and every subsequent bid gets cheaper.

The compounding secret

The first contract is the hardest, and the last hard one. Deliver it well, document the delivery as it happens, and the contract writes your next proposal’s past performance section for you. Grants prove the concept. Contracts build the institution.