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6 Things You Should Know About Foundations

6 Things You Should Know About Foundations

by Resource Associates @ grantwriters.net

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Applying for foundation grants is different than applying for Federal and State grants. For instance, foundations are often funded by family money and managed by the family or descendants of those who worked hard to gain enough wealth to establish a foundation. The approval of the grants may be completed by a handful of family members or by a board of directors meeting to discuss the merits of the applications and vote on those they want to fund. In comparison, Federal grants utilize three to five grant reviewers with grant writing experience to analyze each application independently.

Here are some tips to help you through the process of seeking the support of foundations:

Foundation research.

Your staff’s time assisting with an application is valuable. It is important you focus your time working only on foundation grant applications with the highest possibility of being considered for an award. In order to “weed out” those that are not a fit for your organization, review each foundation’s guidelines in the order of the items listed below. If after your analysis of the guidelines, you are still not sure, you can call the foundation for further guidance, unless they specifically say in their guidelines not to call. We suggest you maintain a spreadsheet of the foundations you have researched with a rating system: An A would mean your organization fits all of the eligibility criteria, and there is great potential for a grant award. B would mean this somewhat of good fit, but something may not work. For example, maybe you are eligible by type of organization and location, but your program maybe a stretch of the imagination to fit what they are funding. C: Don’t try to apply unless they change their eligibility rules or you can change your program to fit whatever did not fit the eligibility. Then sort the A’s by due date, so you do not miss an opportunity.

What locations and what type of organizations does the foundation provide support?

Is your program and/or main office located in a State, County or City where the foundation provides grants? Unless the foundation gives grants for anywhere in the United States, you’ll need to make sure your location is included. The next eligibility classification you need to look at is whether or not they give for your type of organization – i.e. nonprofits, school districts, only national nonprofits, only local nonprofits, only organizations in existence for 5 years, or only new, grass roots organizations. If your organization does not fit either of these criteria, you can stop reading the guidelines as it would be a waste of your to apply for a grant.

Does the foundation accept unsolicited applications?

Some foundations require you be invited by a Board member or program officer to submit an application. If you have not received an invitation, then, again, you are wasting your time submitting an application as they will not review it. On the other hand, if this is a foundation in your local area and you believe what you need the funds for falls within the type of programs they support, make a point to get to know someone in foundation, so hopefully someday they will send you an invite.

What topic areas, types of programs, types of budget items, and amounts do they give grants for?

Most foundations specialize in giving for certain types of programs and within those programs, they may restrict the type of funding allowed. For instance, a foundation may only give for tangible items, such as computers, playground equipment, or a new air conditioning unit. If a foundation gives for programs, the guidelines will usually specify the types of programs, such as educational for a certain age group, at risk youth, welfare of certain animals, training for specific types of jobs, or low income seniors. The guidelines will probably also state if they only give for operations or budget items related to the program, such as a percentage of staff time working on the program, hourly or percentage of cost for the amount of space and time used by your offices and other rooms, the fees charged for use of facilities outside of your offices, the use of your rooms or outside locations involved in the program, costs for printing outside of ordinary copying (outreach brochures and posters), and a percentage for overhead. Administrative overhead is usually allowed at 8 to 12% of the overall total grant application amount. Overhead can cover items, such as the telephone system, internet, general in-house copying, and bookkeeping.Often foundations will also list on their website all the organizations they have given grants to by year with the amount and the summary of their program. Pay special attention to the average amount given and what type of programming for which they tend to give larger or a great number of awards. Do not ask for more than the amount they set as a limit. However, if they do not set a limit, then ask for around the highest dollar amount given in the past more than one time that is similar to the type of grant you want to receive.

What types of documents do you need to submit with your application?

Usually most foundations require an audited financial statement, a copy of your most recent 990 tax filing, a copy of your IRS Determination letter if you are a nonprofit, a copy of your organization’s annual budget, and a current list of your Board members. It is important to have all of these items current and on hand at all times in a digital and hard copy file to retrieve easily. If you do not have an audited financial statement, find out if the foundation will accept a Compilation (compiled financial statement) prepared by a CPA. If not, and you do not have an audited financial statement, then your organization needs if are going to have this completed by a CPA at the cost of $3,000 to $8,000. Some foundations require letters of support and/or partnership letters. It is a good idea to have a positive relationship with local organizations that work with your organization, as well as local government officials and politicians. Sometimes a supporter will give you a generic support letter that can be used on various grant applications. If you need a letters of support for a specific program, then it is good to contact those people at the beginning of the grant writing process as sometimes it takes a couple of weeks or longer to obtain those signed letters. It is a good idea to have on hand templates of letters of support to be filled in as needed.

Don’t rely on one application or foundation to build your organization or sustain your programs.

You will probably need to apply to various foundations to cover the majority or all of your programmatic costs as they may only give for a portion of your needs. Even though this may be a little more time consuming, it may be to your advantage that you can show that you are applying to others, and even better that you have received support for your program from another funder(s). Some foundations will ask you specifically for the type, amount and date of funding you have received for the program. This is partially because they want to know the community supports your program, and that your program will continue after their funding expires.

Another difference between foundation and governmental grants are the progress reports. Often the foundation report you will be required to complete annually is a simple, one-page report on how you spent the funds, plus information on how your program has succeeded and about any challenges you encountered. Governmental grants can require programmatic progress reports can be several pages long, monthly or quarterly detailed financial reports, and an annual site visit for 1 to 5 days from the program officer or another firm hired by the governmental agency to perform qualify assurance.

In addition to the above, it is important you follow all their instructions “to the T” as funders will use non-compliance with one aspect as a reason to not even review your application.  If a foundation requires 11 point Calibri with a one inch margin, then do not try to squeeze in more words with 10.5 Calibri and 1.25 margins. If they say do not send videos, but you have a great video showing what wonderful impact your organization has had on your community, do not be tempted to send it as they may not just ignore it, but may disqualify you for not following the instructions. Following instructions is one way indicating to the foundation your organization is responsible and will be good stewards of their money. We also suggest you do some homework to learn some terms commonly used by foundations who will help you to know which funders are a fit, and to write a winning application: Leveraging funds, capacity building, operational vs. programmatic, cash matching and in-kind donations.

Best wishes for your endeavors to seek foundation support. If you have questions or would like assistance writing foundation or Federal grants, please get in touch with us. We’re always happy to help!

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