Sunday, March 11, 2007

The Grant Writer's Little Helper: IRS Tax Form 990 Post 1 of 2

In the United States tax filings are public record. It is a good thing because, for grant writers, IRS tax form 990 assists us like maybe no other public documents can. Grant donors' IRS form 990 tax filings give us information that help us, as grant writers, work smarter and succeed.

When you sit down to research who will potentially donate a grant to your non profit for that specific program, project, item, building, or whatever your organization needs grant money for; there are a few questions that you need to know the answers to, every time. Why? The answers to these questions will help you cull down the long list of who you might apply for a grant to, to a healthy shorter list of who most likely will really give your non profit a grant. This step is the difference between an experienced grant writer and one who is a novice. When you research potential grant donors' IRS form 990's, the information you gather will save you time and resources.

The questions that we wind up asking about each grant donor who is new to us include:

1. What is the foundation's correct (legal) name? Always good to know the correct name when asking for financial backing!

2. What is the their current contact information?

3. Is this foundation a non profit (a legal 501(c)(3) entity, in the United States)? If they appear to be in business specifically to 'give' grants be very cautious. There are entities who squeak by all of the legalities to remain in business, but may be less than ethical in their practices. Always research grant donors more than through one or two resources, and when some potential donor is new to you - ask colleagues working for other non profits about their experience with that grant donor.

By the way, private foundations are legal and can be excellent ethical grant donors, but usually contribute to a focused cause, such as religious organizations.

4. How much do they spend on their operating expenses vs. how much they donate annually? This is another way to sniff out a rat.

5. How much income do they receive, annually, on average?

6. How much do they give, annually, in grants, on average?

7. How strong are their assets (another test as to their legitimacy and ability to give larger grants)?

8. What are the name of the officers overseeing the foundation? One of you non profit's volunteers, clients, or staff may know one of them, which is extremely helpful in building relationships with grant donors.

9. Are staff compensated? This can be another way to ferret out whether you want to do business with them. If this organization compensates its employees, and at extremely large salary amounts, you may want to research their operations further. For example, after 9/11 there was a world known American non profit that came under scrutiny. It was delegating donations where it saw fit, even when donors designated where they wanted their donation spent (which is illegal in the US). They were also paying their executives very high salaries. Non profits who partnered with them were linked to the controversy, in their local communities. The notoriety and controversy faded, but the relationship may have led donors to think twice.

10. Does this donor only give grants to preselected non profits? In other words, there are grant donors who (can legally) only give grants to non profits that they select on their own. These grant donors do not accept grant applications or any request for grant money.

11. What is the current name and contact information for the staff member who receives grant application for the foundation.

12. What form do they require? What are their giving guidelines? What are their deadlines?

13. Who do they give grants to? More importantly, who has recently received a grant from them? This information is invaluable. This is a biggie. You can tell, from a list of recent grant recipients, the size, field, cause, geographical location, and type of organization (local school, private hospital, national direct care provider, etc.) that the grant donor has given to recently. This gives you a strong indication if you would be of interest to them. Is your non profit the same size as the grant recipients? Are they based in the same geographical location as your organization? Is your field and cause the same as other recent recipients? If it appears that your organization is not what they're interested in - research this further. If they have new giving guidelines - your organization may be a possible candidate. If, though, they have a history of giving to pretty much the same kind of organization and haven't changed that approach, your energies may be better spent on another potential grant donor. Knowing this could save you and the non profit you work for time and resources.

Also, another waste of your time may be if they give grants, typically, between $500 - $1,500 and you're looking for a $100,000 grant. Even if you're looking for a $20,000 grant; asking for $1,000 towards $20,000 isn't worth your time or resources. You want to find grant donors who typically give in the amount range that you're needing money in.

As grant writers you and I could really use the answers to these questions. Yes, grant donors' IRS form 990 filings usually answer each and every question, above.

In my next post I discuss how to easily find the IRS form 990 filings for the grant donor that you're considering applying to a grant for, for free. I also explain how to decipher the 990 form so that you can know the answer to each of the above questions, for any grant donor in the United States.

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