TYPES OF FOUNDATIONS
Foundations are organizations that donate funds and support to other organizations. Some foundations may also provide funding to support their own charitable programs. For grant making purposes, the business of a foundation is to make grants to support charitable programs. Each foundation has its own interests and supports projects that are within those interests.
There are five types of foundations:
- Operating foundations
- Independent foundations
- Community foundations
- Corporate foundations
- Public Charities
Operating foundations are established as separate entities by a parent organization to raise money for the programs and services of the parent organization. Operating foundations are commonly found in universities and hospitals, and it has become a growing trend in social service agencies and public and private schools. Public school districts have established operating foundations as a method of increasing private donations and to keep private funds separate from public funds.
Most independent foundations are foundations established by an individual or family so they are commonly referred to as family foundations. Some independent foundations may be linked to businesses, but they represent private giving. Family foundations may be administered by family members and some are administered through bank trust officers.
Community Foundations serve specific geographic areas. A Community Foundation may serve several counties, a single county, several cities, or an entire metropolitan area. Community Foundations administer pools of money from private donors and other foundations. An applicant applying to a Community Foundation could have access to multiple donor-advised funds.
A Corporate Foundation is established as a separate legal entity by a parent company. The parent company passes along a percentage of its profits to the foundation for distribution to charitable organizations.
A Public Charity receives a substantial amount of money from a governmental unit or the general public and distributes it via grants to support community programs and services. Local Arts Councils are an example of Public Charities.
HOW TO IDENTIFY PROSPECTS
Foundations have particular interests and may choose to limit their grant making to certain geographic areas. It is the applicant’s responsibility to identify foundations with interests that align with the applicant organization’s programs and services.
Before an organization begins researching to identify foundation grant makers to support its programs and services, it is important to identify specific projects and services. Further, it will be helpful to assign costs to the projects and services. While some foundations will be capable of funding the total cost of a project, many will contribute a portion of the total cost. Locating the foundation’s giving history to determine how much each foundation is capable of giving is part of the prospect research process. It is common to ask several foundations to contribute to the same project to make up the total cost of the project or service.
To begin identifying foundation grant makers, it is recommended the organization make a list of connections that any of the staff, board, or agency volunteers have with foundation representatives, especially corporate foundations:
- List vendors and individuals with whom the organization conducts business (i.e., banks and financial institutions, insurance companies, office suppliers, etc.)
- List area businesses that may be linked to corporations with charitable giving programs (i.e., McDonald’s restaurants, Office Depot, Proctor and Gamble, Lowe’s, Home Depot, Target, Best Buy, etc.)
Once the lists are completed, check to see if the business has a website and begin searching for information about the interests, limitations, restrictions, and application guidelines of each foundation. If the information about the foundation aligns with the applicant organization and project, it is a match to be pursued by submitting a Letter of Intent or grant proposal. Click here for Letter of Intent. Click here for Grant Writing Basics.
An organization’s best prospects are those foundations (1) located in the same geographic area; (2) that are known to fund similar projects for other organizations; and, (3) where the organization has existing relationships and contacts. It is recommended that an organization begin its search for grant makers by looking first for local grant makers, and then expand the search statewide, regionally, and nationally.
Resources in addition to foundation websites for helping to identify foundation grant makers include (1) The Foundation Center @ www.foundationcenter.org, which provides databases containing information about thousands of foundations throughout the nation and is searchable using key terms and geographic areas; (2) Guidestar @ www.guidestar.org, which provides free information about a foundation’s grant making based upon tax reports; and, (3) other search engines such as Yahoo or Google.
These Readiness Questions may help an organization determine whether it is ready to begin applying for foundation grants:
- Are the basics in place?
A. Does the organization have a governing board of directors?Foundations will look at the organization’s leadership—who they are as well as how actively engaged they are in the organization.
B. Does the organization have a not-for-profit tax status?Foundations will ask organizations to prove their not-for-profit tax status as part of the application process.
C. Does the organization have a written mission statement?It is important to have a written mission statement to guide the grants program and prevent applicants from “chasing” grants that could lead the organization away from its mission.
D. Does the organization have a diversified funding base?Foundations do not like to be the only funder. A diversified funding base takes away an organization’s reliance on a single foundation and promotes sustainability.
- Are the organization’s expectations about grants realistic?
A. What is the fund raising goal?How much of the goal does the organization want to raise in grant funds?
B. What is the timeline for raising the money?Applicants will submit grant proposals according to the requirements and deadlines of each foundation. The foundations’ calendars may or may not align with the applicant organization’s fund raising timeline.
C. How does the fund raising goal compare to the organization’s current budget?Is the organization being too aggressive, trying, for example, to double its budget through the acquisition of grants?
D. How large must the grant be in order to make it worthwhile to apply?It takes as much time to write a grant for $500 as it does for $100,000. An organization may want to determine a minimum grant amount for its grant writing program to pursue. (For example, the organization will only pursue foundation grants $5,000 or more.)
- Is the organization prepared to accept a grant?
A. Does the organization have an acknowledgement program in place?It is important to continue cultivating the foundation so an organization can submit future grant requests. Thanking the foundation for the grant is an important tool for cultivation.
B. Is the organization prepared to do the required reporting?Some foundations require fiscal and programmatic reporting.
C. Are the grant funds in an audit traceable account?It is important to be able to tell the foundation how their grant money is being spent.
D. Is the organization prepared to abide by the restrictions and requirements of the grant maker?United Way, for example, does not allow funded agencies to conduct fund raising activities during United Way’s campaign period.
- Is the organization committed to a grants development program?
A. Who will write the grants?Does the organization have a grant writer? Full-time? Part-time? Paid staff? Volunteer? Consultant?
B. Does the board of directors have a role?Board members can help the organization’s efforts by making contact and building relationships with foundation representatives.
C. Is the organization prepared to make other investments in the grants program?Is the organization prepared to provide matching or start-up funds? What are its plans for sustaining programs beyond the grant period?
HOW TO APPLY
Organizations request support from foundations via grant proposals and grant applications. Some foundations provide specific guidelines for submitting grant proposals; some have online application processes; and some request the applicant to send a proposal without offering guidelines. When a foundation does not provide guidelines or have application forms, it is recommended the applicant develop a Standard Proposal. Click here for information about the Standard Proposal in Proposal Basics.
GRANT MAKING AGENCIES
According to GRANTS.GOV, www.grants.gov, there are 26 grant making federal agencies:
- “The Agency for International Development is an independent federal government agency that provides economic and humanitarian assistance in more than 100 countries to ensure a better future for us all.” www.usaid.gov
- “The Corporation for National and Community Service is the nation’s largest grant-maker supporting service and volunteering. Through Senior Corps, AmeriCorps and Learn and Serve America programs, the Corporation is a catalyst for change and offers every American a chance to contribute through service and volunteering.” www.nationalservice.gov
- “The Department of Agriculture serves all Americans through anti-hunger efforts, stewardship of nearly 200 million acres of national forest and rangelands, and through product safety and conservation efforts. The USDA opens markets for American farmers and ranchers and provides food for needy people around the world.” www.usda.gov
- “The Department of Commerce fosters and promotes the nation’s economic development and technological advancement through vigilance in international trade policy, domestic business policy and growth, and promoting economic progress at all levels.” www.commerce.gov
- “The Department of Defense provides the military forces needed to deter war and protect the security of the United States through five major areas: peacekeeping and war-fighting efforts, Homeland Security, evacuation and humanitarian causes.” www.defense.gov
- “The Department of Education ensures equal access to education and promotes educational excellence through coordination, management and accountability in federal education programs.” www.ed.gov
- “The Department of Energy’s goal is to advance national, economic and energy security in the U.S.; to promote scientific and technological innovation in support of that goal; and to ensure environmental cleanup of the national nuclear weapons complex.” www.energy.gov
- “The Department of Health and Human Services is the federal government’s principal agency for protecting the health of all Americans and providing essential human services, especially to those who are least able to help themselves.” www.hhs.gov
- “The Department of Homeland Security has three primary missions: Prevent terrorist attacks within the United States, reduce America’s vulnerability to terrorism and minimize the damage from potential attacks and natural disasters.” www.dhs.gov
- “The Department of Housing and Urban Development’s mission is to increase homeownership, support community development and increase access to affordable housing free from discrimination. HUD fulfills this mission through high ethical standards, management and accountability, and by forming partnerships with community organizations.” www.hud.gov
- “The Department of the Interior protects and provides access to the Nation’s natural and cultural heritage, including responsibilities to Indian tribes and island communities. Departmental goals include resource protection and usage, overseeing recreational opportunities, serving communities and excellence in management.” www.doi.gov
- “The Department of Justice enforces the law and defends the interest of the United States, ensuring public safety against threats foreign and domestic; providing federal leadership in preventing and controlling crime; seeking just punishment for those guilty of unlawful pursuits; and ensuring fair and impartial administration of justice for all Americans.” www.justice.gov
- “The Department of Labor fosters and promotes the welfare of job seekers, wage earners and retirees by improving their working conditions, advancing their opportunities, protecting their retirement and health benefits and generally protecting worker rights and monitoring national economic measures.” www.dol.gov
- “The Department of State strives to create a more secure, democratic and prosperous world for the benefit of the American people and the international community.” www.state.gov
- “The Department of Transportation’s mission is to ensure fast, safe, efficient, accessible and convenient transportation that meets vital national interests and enhances the quality of life of the American people, today and into the future.” www.dot.gov
- “The Department of Treasury is a steward of United States economic and financial systems, and promotes conditions for prosperity and stability in the U.S., and encourages prosperity and stability in the rest of the world.” www.ustreas.gov
- “The Department of Veterans Affairs strives for excellence in patient care and veteran’s benefits for its constituents through high quality, prompt and seamless service to United States veterans.” www.va.gov
- “ The mission of the Environmental Protection Agency is to protect human health and the environment.” www.epa.gov
- “The Institute of Museum and Library Services is the primary source of federal support for the nation’s libraries and museums.” www.imls.gov
- “The National Aeronautics and Space Administration serves as the nation’s forefront of such exploration and continues to pioneer in aeronautics, exploration systems, science and space operations.” www.nasa.gov
- “The National Archives and Records Administration enables people to inspect the record of what the federal government has done, enables officials and agencies to review their actions and helps citizens hold them accountable.” www.archives.gov
- “The National Endowment for the Arts is a public agency dedicated to supporting excellence in the arts; bringing the arts to all Americans and providing leadership in arts education. The Endowment is the largest national source of funds for the arts.” www.nea.gov
- “The National Endowment for the Humanities is an independent grant-making agency of the United States government dedicated to supporting research, education, preservation and public programs in the humanities.” www.neh.gov
- ”The National Science Foundation is an independent federal agency created to promote the progress of science, to advance the national health, prosperity, and welfare and to secure the national defense. The NSF annually funds approximately 20 percent of basic, federally-supported college and university research.” www.nsf.gov
- “The Small Business Administration maintains and strengthens the nation’s economy by aiding, counseling, assisting and protecting the interests of small businesses and by helping families and businesses recover from national disasters.” www.sba.gov
- “The Social Security Administration advances the economic security of the nation’s people through compassionate and vigilant leadership in shaping and managing America’s Social Security programs.” www.ssa.gov
HOW TO IDENTIFY GRANT PROGRAMS
The federal government announces all grant programs through it official publication called the Federal Register (www.gpoaccess.gov/fr.) The Federal Register is published weekly Monday through Friday, and federal agencies make grant announcements to the public within this document. The Federal Register also includes other federal information such as new rules and regulations.
Interested applicants can access the Federal Register daily and begin by reviewing the Table of Contents for new grant announcements. A federal agency will publish a grant announcement on one day and one day only. Announcements are archived and interested applicants can search the Federal Register online for relevant grants. Interested applicants can also register to be placed on a List Serv at www.gpoaccess.gov/fr and the Table of Contents will be emailed daily to the subscriber. There is no fee for this service.
The federal government also operates an official website, GRANTS.GOV, where grant seekers can not only search for federal grant announcements but also submit federal grant applications electronically. www.grants.gov
Next, grant seekers can identify federal grant program opportunities through federal agency web sites: Click here to see Grant Making Agencies.
Agency for International Development (USAID) www.usaid.gov
Corporation for National and Community (CNCS) www.nationalservice.gov
Department of Agriculture www.usda.gov
Department of Commerce (DOC) www.commerce.gov
Department of Defense (DOD) www.defense.gov
Department of Education www.ed.gov
Department of Energy www.energy.gov
Department of Health and Human Services (DHHS) www.hhs.gov
Department of Homeland Security (DHS) www.dhs.gov
Department of Housing and Urban Development (HUD) www.hud.gov
Department of the Interior (DOI) www.doi.gov
Department of Justice (DOJ) www.justice.gov
Department of Labor (DOL) www.dol.gov
Department of State www.state.gov
Department of Transportation (DOT) www.dot.gov
Department of Treasury www.ustreas.gov
Department of Veterans Affairs (VA) www.va.gov
Environmental Protection Agency (EPA) www.epa.gov
Institute of Museum and Library Services (IMLS) www.imls.gov
National Aeronautics and Space Administration (NASA) www.nasa.gov
National Archives and Records Administration (NARA) www.archives.gov
National Endowment for the Arts (NEA) www.nea.gov
National Endowment for the Humanities (NEH) www.neh.gov
National Science Foundation (NSF) www.nsf.gov
Small Business Administration (SBA) www.sba.gov
Social Security Administration (SSA) www.ssa.gov
The Department of Education (www.ed.gov) is one federal agency that publishes a forecast of funding opportunities during the current fiscal year (October 1-September 30.) Most federal agencies do not publish such forecasts, and applicants can expect only to know about the grant programs as they are announced.
Another important resource for helping to identify federal grant programs is a government document called the Catalog of Federal Domestic Assistance (CFDA). www.cfda.gov
Unlike the Federal Register that lists current grant announcements, the Catalog of Federal Domestic Assistance is an historical document listing all federal grant programs. Every federal grant program is assigned a CFDA number, and the Catalog of Federal Domestic Assistance provides a description about each program.
Since federal grants tend to be announced the same time each year, the Catalog of Federal Domestic Assistance is a good starting point to identify grant programs of interest. A potential applicant can become familiar with the program and begin planning so it is ready to begin the application process when a grant program is announced.
HOW TO APPLY
Individuals and organizations must register with the federal government to submit federal grant applications. It is never too soon to begin the registration process at the GRANTS.GOV web site (www.grants.gov.)
As part of the registration process, applicants will be required to obtain a DUNS number for the organization and set up an account with the Central Contractor Registry. (www.ccr.gov)
There is no cost involved with obtaining a DUNS number OR for setting up an account.
A DUNS (Data Universal Numbering System) number is a unique nine digit numbering system likened to a Social Security number for an individual.
Most federal agencies will require an organization to submit its grant application via the online application process at GRANTS.GOV (www.grants.gov). However, The Department of Justice (www.justice.gov), Department of Education (www.ed.gov), National Science Foundation (www.nsf.gov), National Institutes of Health (www.nih.gov) , and the Corporation of National and Community Service (www.nationalservice.gov) have separate online application processes that can be accessed on their web sites.
It is important when preparing a federal grant application to read the instructions in the application packet and follow the directions closely. The Request for Proposals (RFP), Request for Applications (RFA), or Notification of Funding Announcement (NOFA) will state the applicant “should” and “must” throughout the instructions, and applicants are required to address these in their narratives. While this may appear obvious, officials at the Administration for Children and Youth say that close to half of all applications are rejected because applicants do not carefully read the instructions. Failure to keep an application within the page limit, for example, is cause for rejection.
WHO CAN APPLY
Most grant opportunities are directed to organizations that assist individuals. Eligibility varies by grant program. Each grant announcement will clearly state eligibility requirements. Most grantee organizations fall into the following categories:
Government Organizations: State, Local, City, Township, Special District, and National American Tribal Governments
Education Organizations: Independent School Districts, Private Schools, and Public and Private Institutions of Higher Education
Nonprofit Organizations: Nonprofits having a 501(c)(3) status with the IRS, other than institutions of higher education, and nonprofits that do not have a 501(c)(3) status with the IRS, other than institutions of higher education
Public Housing Organizations: Public and Indian Housing Authorities
Federal agencies have an extensive application review process that can take up to six months. An application must be submitted by the deadline, or it will not be considered. The review process in most federal agencies involves the federal agency’s staff and a peer review committee.
Often times the grant announcement or application packet will ask for potential applicants to send a letter informing the federal agency of the applicant’s intent to apply for a grant. This information enables the federal agency to select an adequate number of peer reviewers. When the time comes, reviewers are asked to read several grants and score them according to the review criteria listed in the grant announcement. The reviewers score each section of the federal grant proposal and total the scores for each application. They also make comments about each section of the grant proposal. The federal agency collects the scores and ranks the proposals with those scoring the most points at the top of the list.
In addition to the peer review, the federal staff has a role in the review process, and an applicant’s ranking can change if the grant proposal does not receive a favorable staff review. The federal agency will also try to distribute grant funds geographically and across priorities if a grant program has multiple priorities (i.e., health, education, and energy.)
Generally, applications scoring the highest will receive approval for funding, but that is not always the case as behind-the scenes politics are beyond an applicant’s control. It is important to note that an application can be (1) approved and receive funding; (2) not approved for funding; and (3) approved but not funded. If an application is approved but not funded, it can be an indication the federal agency ran out of money before it reached the applicant’s score on the list.
Applicants can request review information from the federal agency after grants have been awarded. The request must be made in writing. Usually the federal agency will respond with reviewer comments and the applicant’s score. This is important information if the applicant intends to reapply for the grant. The comments can be used to strengthen the grant application for the next round of funding. Click here to see a sample proposal with reviewer comments from the Department of Health and Human Services.
Lastly, the peer reviewers are persons in the field with related program experience. Individuals interested in becoming a peer reviewer should visit the web site of the federal agency of interest to read about the requirements and application process. Click here to see Grant Making Agencies.
To see a few examples of how to become a reviewer, the qualifications and responsibilities, click on the links below:
Substance Abuse and Mental Health Services Administration (www.samhsa.gov)
Department of Education (www.ed.gov), Investing in Innovation Fund, Call for Peer Reviewers, www2.ed.gov/programs/innovation/peerreviewers.html
Administration for Children and Families, Department of Health and Human Services (www.acf.hhs.gov), Children’s Bureau, Title IV-E Foster Care Eligibility Reviews, Peer Reviewer Requirements and Responsibilities, http://www.acf.hhs.gov/programs/cb/cwmonitoring/general_info/iv-e_consult-resp.htm
SAMPLE FEDERAL GRANT PROPOSAL
The Office of Faith-Based Community Initiatives, a federal office established by President George W. Bush, published the Sample of a Successful Grant Proposal on its web site.
The sample proposal includes the narrative section of the grant proposal. Budget information and Standard Forms are not included.
The federal grant program for which the application was prepared is called Migrant Education Even Start Program. The name of and information about the agency submitting the application has been protected in the posting of this grant proposal by the Office of Faith-Based Community Initiatives. Please note that the Office no longer exists and the Migrant Education Even Start Program may have experienced changes since this sample grant proposal was posted.
The sample grant proposal is reproduced as it was originally posted on the Office of Faith-Based Community Initiatives web site. The sample grant proposal is intended to be used for educational purposes only.
Click here to read the sample proposal
To prepare a federal grant application, applicants will need an application packet, containing standard forms, and the grant announcement, where directives about how to write and organize the narrative portion of the grant proposal can be found. Standard forms are used throughout government grant proposals to provide budget, certifications, and other information Potential applicants can view the standard forms and instructions at GRANTS.GOV.
Potential applicants can download an application packet at GRANTS.GOV, www.grants.gov/applicants/apply_for_grants.jsp. It will be necessary to select a grant program of interest before trying to download an application packet as the site requires applicants to enter the Catalog of Federal Domestic Assistance (CFDA) number of the grant. (www.cfda.org)
Click here to see How to Identify Grant Programs for more information about the CFDA.
Click here to see a sample budget and budget narrative provided by the Substance Abuse and Mental Health Services Administration.