Contracts. If you look at a grant and you look at a contract, they are different funding instruments. Your nonprofit organization may be eligible for both state or city grants and contracts.
Grant funding is given out (usually via grant competition) and then the state will create an agreement on awarding the funds to you if you spend them how you outlined in your grant budget.
They will also most likely demand a whole bunch of receipts and reports to ensure you are spending the money the way you said you would spend the money.
Now a contract on the other side is actually legally binding. They can take you to court if you don’t spend the money the way you said you were gonna spend the money. But at the same time, there’s a little bit more flexibility in the funding.
For reports to draw down contract money, you may just need to show the monthly or quarterly deliverables in the scope of work (not all the receipts for every penny).
If you met under budget and you still met all of your goals, you will still be awarded the money under the contract, whereas with a grant you might only be reimbursed for what you actually spent.
So there could be a little bit more flexibility and less reporting with contracts. However, you will have a legally binding contract for due diligence.
If you can get a contract, go after the contract. If you can get a grant, go after the grant. If you can go after both. Go after both.