Can nonprofits make money?
Yes. This is one of the most widely misunderstood concepts about nonprofits. Nonprofits are given exemption from taxes primarily because of what they do, which generally benefits the community or a group they serve. Not only can a nonprofit make money but one should make money because regardless of activities or mission these are businesses that should adhere to good business practices. The money they make can go to cover their expenses, grow the business, invested, or kept in reserve. Interestingly, if invested, the dividends may not be tax exempt.
What's the difference between private and government grants?
The short answer is paper, but complexity is also a defining difference in most cases. There are foundation grants that ask for nothing more than a formal letter requesting funding to multi-stage complex applications. However, a complex application for a foundation would probably be under 30 pages, whereas a government grant can easily be several hundred pages. Government grants typically funding in higher amounts than private funders and they can also require the organization to have a greater capacity in executing the funding requirements.
How long does it take to write a grant?
There is an incredibly wide range but on average a private grant can be written in 15 hours and a government grant can take 80 or more hours.
What kind of supporting documentation do I need to submit a grant or provide a grant writer?
This is an excellent question and of great importance because sometimes gathering the supporting documentation can be more time consuming than writing the grant. Here is a general list that should help:
- Letter of Determination (this is the letter from the IRS granting 501c3 status)
- current Board-approved budget
- most recent 990
- the current list of board of directors/trustees and their respective affiliations
- financials - profit & loss, balance sheet
- list of other funders and potential funders who have proposals from you
- articles of incorporation
- bylaws
- proof of insurance
Are there different types of nonprofits?
Yes. The ideal, in terms of grant funding, is the 501c3. Most grants are aimed at only 501c3. But few are aware that there are actually 29 different types of 501c organization types.