Why do Foundations give grants?
They are usually associated with family foundations collecting interest on existing funds (old money) or successful businesses that made a profit in that tax period (new money). Regardless, that money is taxable, so foundations have the choice of paying those taxes OR giving a portion of them away to a charity for a tax write-off. For this reason, most foundations offering larger grants will require an organization to be an official non-profit (501(c)(3) in the USA).
Again, foundations only have an interest in giving you some of their profit, so if they are going out of business or they didn't make any profits in that tax term -- they don't need your tax write-off.
List of Foundations
Foundation Center (http://fconline.foundationcenter.org/) is a great online resource, contact them and find out who in your area has an account -- make friends with that organization. You may realize it is your local Non-profit Association or local Library.
First Contact: Letter of Inquiry
Some foundations request that initial contact is made via letter of inquiry. The Foundation Center's FAQ provides HOW TO information. Letters of Inquiry can be accompanied by a phone call to the contact person. You may explain that you have put a letter in the mail and that you would like to begin to build a relationship with the contact person before the letter is received.
Sample Letter of Inquiry
January 24, 2008
Milton W. Brannon President Livingston Foundation, Inc. 171 17th St. N.W., Ste. 2100 Atlanta, GA 30363-1031 USA
Dear Milton W. Brannon, President:
Sopo Bicycle Cooperative is a community driven nonprofit agency that takes the lead in creating clean, affordable transportation for inner city Atlantans. I am writing to ask you to consider a proposal to increase our paid staff to include a Project Manager for our core program, the Repair Shop, so we can best meet the educational needs of our expanding community.
Our organization uses bicycle repair education as a method of creating transportation-based community development through our core program, the Repair Shop. Each week, the Repair Shop serves 100 people, all seeking opportunities to learn from and to teach each other. This is a 30% boost in activity since we hired our Executive Director in October 2007 and increased our hours of operation from 9 hours per week to 12. Our major goal is to maintain the Repair Shop as a high performing community education resource as the demand for our services continues to grow.
We believe our chances of accomplishing this goal will be improved by hiring a full time Project Manager who will oversee all shop operations and provide necessary support to shop participants. Your foundation has expressed a special interest in providing operational support for community development and education agencies in Atlanta, GA. We are committed to using bicycle repair education as a tool for community empowerment, and we believe that creating sustainable transportation is important community development work. We hope that you will give our project further consideration.
Other foundations, including the Fund for Southern Communities and the Thomas P. Waters Foundation, have pledged their cooperation. They agree that a major challenge for Sopo is our need to staff our organization. We are also seeking the support of the Sartain Lanier Family Foundation, Inc. and the Atlanta Foundation. We estimate the cost of hiring our Project Manager for her or his first year of paid service at $40,000, of which $10,000 will be provided by the cooperating agencies. We hope you will consider a proposal for the remainder of the needed funds.
Thank you for your time and consideration. I am available for further discussion via email at email@example.com or by telephone. I would greatly appreciate receiving a copy of your application guidelines and any instructions for preparing a completed proposal. A copy of our 501(c)(3) letter is enclosed.
Rachael M. Spiewak, MSW Executive Director 404-392-4597