Most grant-giving organizations require nonprofits to have 501(c)3 status.
Nonprofit organizations depend on money from private and public agencies to provide resources to the public. Very few nonprofit organization have the ability to generate revenue through selling products and services, so much time is spent seeking sponsorship and grants. It is important to follow the exact guidelines of the grant giver or corporation when seeking grants and sponsorship.
Corporate Sponsorship
Corporate sponsorship benefits a nonprofit organization because it is able to fund its special activities, but sponsors also receive the benefit of having their businesses seen as supporting a worthy cause. Corporations that sponsor nonprofits realize they are partaking in a business deal and not simply giving a donation. Nonprofit organizations looking for corporate sponsorship can target small businesses in their local area. National companies sponsor events of nonprofits, but the process to get support is more complicated than with a small business. Organizations seeking corporate sponsorship must have a comprehensive marketing plan that will benefit their business partners.
Fiscal Sponsorship
Some new nonprofit organizations with small budgets and few staff members may consider acquiring a fiscal sponsor to handle all of the nonprofit's incoming funds. A fiscal sponsor is a 501(c)3 organization that acts as a parent company for a smaller nonprofit. Once a partnership is entered into between a nonprofit organization and a fiscal sponsor, the sponsor is responsible for all of the nonprofit's legal and financial matters. All tax information, accounting responsibilities and administrative work will be handled by the fiscal sponsor. This is beneficial to a nonprofit because they're allowed to focus solely on getting their projects off the ground, and can offer their donors tax deductions.
Government Grants
Many nonprofits depend on federal grants to fund projects. The federal government has various agencies that provide grants to many community projects, such as those that combat homelessness, provide job training to low-income individuals and provide art programs to at-risk youth. Nonprofits seeking grant funds must prepare proposals to submit for review. Grant writers need good writing and analytical skills. It is important to read the instructions and eligibility requirements of grants before applying. The grant-writing process is lengthy, and you don't want to spend time applying for a grant you have no chance of receiving.
Private Grants
Corporations and foundations provide grants to nonprofit organizations whose social causes align with their own. Nearly every large corporation has a philanthropic department that focuses on providing funds to organizations that support community development and improvement. Similar to the public grant process, grant proposals are required to obtain corporate grants. Searching for private funds is more tedious than for public funds, but there are many corporations ready to support the right cause.
