Lesson 2: Sources of Grant Money

Broadly defined, grants come from two sources: the private sector and the public sector. The private sector consists of foundations and corporations. The public sector is the government: town, city, county, state and federal. We will start with the private sector.

Private Foundations

There are five basic types of foundations:

Community Based: These groups are formed for the benefit of a specific area. The San Francisco Bay Area foundation, as one example, is dedicated to projects in and around San Francisco.

National Broad Interest: You already know their names: Rockefeller, Ford, etc. They are nationwide and huge. Because they are so well known, and receive vast numbers of applications, they are looking for innovative projects. If you have a creative idea, or one that could be used as a model for other agencies, you might try one of the national general purpose foundations.

Special Interest: Some foundations have a national or even international service area, but give for only one purpose. The Arthritis Foundation, the American Heart Association, and the American Lung Association each have a specific area of that they give grants to.

Family: There are 10's of thousands of family foundations. Established by a wealthy family or individual, they often have a geographic area where they concentrate their giving.

Corporate: There comes a point when a corporation begins to make many donation and it makes sense to establish a corporate foundation. There are over 2,000 corporate foundations. For our purposes, we’ll be grouping direct corporate giving in with corporate foundations.

Corporations tend to make grants to the communities that are close to their headquarters or major facilities. Often they require that grants be sponsored by a current employee. Charitable donations are seen as an employee benefit. The goals of corporate grants are to achieve the goals of the company, improve the surrounding environment, and improve the corporation’s image. They are very risk averse in their giving.

Government Grants

Government grants can come from any level of government: city, county, state or federal. You need to realize, however, that city, county, and state grants may be "pass throughs" for federal funds. The city, county, and state may add regulations or restrictions to the federal programs, but they can’t remove any restrictions. If you receive a local grant, you will have to follow all of the regulations assigned to that money from its original source.

                                  Public Sector vs. Private Sector Grants

Government grant programs are more likely to have a funding cycle and a specific application form. Government grant programs are more likely to have a set of criteria to evaluate proposals Government agencies will have an office and staff to discuss programs.

Private sector grants tend to accept applications all year long. Private sector grants are more likely to suggest that you "submit a proposal" without providing a specific form. Private foundations often do not have an office or staff to discuss their programs.

Lesson 3 will cover what these sources of money look for when reviewing your proposals.