Making decisions about who to award grant dollars to can be an arduous task. Often there are many great organizations in our communities requesting funds, and not enough grant dollars to go around. One of the more common questions we hear at SWIF is, “What type of organizations can we award grants to?”
As a public charity we need to ensure that our grants are made solely for charitable purposes. Though the concept of what is charitable has varied with the time, the place and the needs of a particular community, understanding who is eligible to receive grants from your foundation doesn’t need to be rocket science.
Organizations eligible to receive grants need to be either:
- A local unit of government, or
- An organization holding a 501(c)(3) status
For most communities in our region this is a fairly narrow list and there are a couple of resources you can use to check a grantee’s eligibility before making an award:
- GuideStar gathers and disseminates information about every single IRS-registered nonprofit organization. You can use their website to help you find the nonprofit organizations in your community.
- The Internal Revenue Service also has a website that lets you search for tax exempt organizations in your community.
Disclaimer! Not all tax exempt or nonprofit organizations hold a 501(c)(3) status. While certain clubs or fraternal organizations may be organized for a public purpose, they fall under a different section of the IRS code. Grants to these organizations must go through a fiscal sponsor.
Having a grasp on who in your community is eligible to receive funding can make the grantmaking process a bit easier. Additionally, conducting a scan of your community’s eligible grant recipients can lead to new connections with organizations you may have been unaware of. Take a look around and see if you’re missing any community organizations that could benefit from your good work. Use the resources above as a first step in determining an organization’s eligibility and don’t hesitate to contact us if you have any questions.
