How to Find Foundation Grant Funding for Your Charitable Nonprofit Organization

If you are part of a nonprofit's fundraising efforts, then chances are you will, at some point, seek out grant funding from a foundation. So, it's worth understanding what types of foundations are out there, and how to best locate them.

When Is a Nonprofit Ready to Seek Grant Funding?

If your group is still in its startup phase, applying for grant money probably shouldn’t be the first method of fundraising to try. Without a history of success, you'll find it challenging to persuade funders that your organization can do what it plans to—or will even be around in a year or two.

In addition, preparing an appealing grant proposal requires significant time and planning.

The groups most likely to succeed at securing grant funding—and to satisfy funders with their follow-through—are those that have:

  • good reputations, or leaders known for being effective, responsible, and innovative
  • a track record of managing the financial and organizational aspects of the size or type of project they’re proposing
  • an idea for a project that will both capture the grantmakers’ imaginations and make for good publicity
  • a mission that aligns with the funders' goals (education, for example, is a commonly funded area, while religious activities are not), and
  • a connection between a board member, leader, or other member, and someone on the staff or board of a grantmaking foundation.

Two Main Choices: Public Foundations, Private Ones

Sure, you'll probably be happy to get funding from any source. However, your approach and your chances of success may depend in part on what type it is.

All foundations are themselves charitable organizations, which are tax-exempt under Section 501(c)(3) of the Internal Revenue Code. But their funding comes from different places.

Private foundations are usually funded by a wealthy individual or one or more families or corporations. They thus often follow the narrow interests of their founders. Private foundations must spend at least 5% of their investment assets on philanthropy each year. (This includes money spent on reasonable administrative expenses, such as salaries, facilities, and travel.)

Corporate foundations account for just a small percentage of the foundation money granted every year. That’s because most corporate giving, rather than being channeled through foundations, is given out directly by the parent corporations.

Some family-based foundations are so private that you might think they want you to just go away and leave them alone. In fact, a few do want just that—often evidenced by the fact that they don’t have websites.

Public foundations don't have a source of cash backing them up. They must typically forage for their own funding in order to make grants. They might have a focus or list of interests, but they also need you, as a member of the nonprofit community, to feed them exciting new ideas that they can use to stimulate their donors’ interests.

Where to Get Leads on Grantmaking Foundations

When looking for foundation grant money for your nonprofit, you'll want to do some fairly deep research. You can definitely search databases such as those offered by the Foundation Center.

However, it's also good keep your ear to the ground. Talk to similarly situated organizations about which foundations fund them and watch the press for announcements of grants to organizations like yours to get a sense of the funder's actual local interests.

When you come across a promising lead, check out its website. With any luck, this will tell you all about the foundation's mission and funding opportunities. But sometimes even that comes up dry.

You'll next want to look at the foundation’s Forms 990 (which it must file with the IRS annually and make publicly available), available through the Foundation Center’s 990 Finder or Guidestar.

Scroll down to the 990 Supplementary Information page showing “Grants and Contributions Paid During the Year or Approved for Future Payment.” This should show what organizations the foundation made grants to in the past year, and in what amounts.

If, based on your research, you feel there’s a good chance this foundation might be open to a proposal from you, glean all you can about its application guidelines from external sources, and follow them closely. If you can’t find out enough application information to be helpful, mailing or emailing a short query letter is often the best next step.

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