5 Things You Should Know about Foundation Grants

Running a nonprofit is a difficult and time-consuming occupation. Unfortunately, one of the main difficulties your team will encounter can sometimes be money. Yes, money - that dreaded word which causes undue stress to all organizations from time to time. Thankfully, there are resources available to nonprofits that can help supplement your yearly cash flow. One common resource would be a foundation grant.

Here are five things you should know about foundation grants.
  1. What a foundation is
    A foundation - as defined by the Council on Foundation - is a group that supports charitable activities by making grants to unrelated organizations, institutions, or individuals. The grants they provide are primarily for nonprofit organizations. However, when looking into possible grants, it’s important to understand the differences between the two types of foundations: private and public.
  2. How a private foundation works
    A private foundation provides grant money through a family, an individual, or a corporation.
    Every year, private foundations must meet a “payout requirement.” This means they have to give away a certain amount of their assets in order to maintain their tax status. More often than not, private foundations give grants to nonprofit organizations that are charitable, educational, or religious in nature. What matters most to them is that their recipients are serving the public good in one way or another. A private foundation does not solicit the public for money. However, since 1969, they have been held to stricter and more extensive federal rules than public foundations.
  3. How a public foundation works
    A public foundation
    , as its name suggests, is a grantmaking public charity. Different foundations, individuals, corporations, and public organizations come together and provide funding under one banner. (You might think of it as a pool of monetary sources.) Unlike private foundations, however, public foundations often engage in fundraising and soliciting public financial support. As a result, they are tasked with distributing the funds given to them wisely and are more subject to public scrutiny. This helps ensure that these foundations adhere to appropriate standards of conduct (most of the time).These are often called Community Foundations and are found in larger population centers throughout the United States. 
  4. How you can learn more about a foundation
    n the grant-seeking world, knowing a funder’s giving history is very important when determining who might give your organization money. Records of past giving show which funders care about what you do and how much they tend to give. A private foundation’s giving history is public record, making it very easy to learn about past grants. A public foundation doesn’t need to make such information available to the public, but there are still a few ways you might learn about their past grants. For starters, you might: 
    • examine their IRS Form 990-PF- these can usually be found at Guidestar.
    • explore their website 
    • search the internet for any related articles talking about grants awarded under the funder’s name. 
And one final key fact to keep in mind is that - 
  1. There is no legal definition for the word “foundation.”
    Therefore, it’s a good idea never
    to assume an organization with “foundation” in its name is a grantmaker. Do your research and find out what works
Still feeling confused about foundation grants? Need help discovering which foundation grants are right for your organization? Please contact MPS Grants today and sign up for our mailing list! We look forward to working for you. 

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