Grantmakers typically fund nonprofit organizations that qualify for public charity status under section 501(c)(3) of the Internal Revenue Code. These are organizations whose purposes are charitable, educational, scientific, religious, literary, or cultural. Their income cannot benefit private individuals, and their influence on legislation or political campaigns is restricted. Public schools, libraries, and other government organizations also qualify as public charities, although they usually have not applied for 501(c)(3) status. Under federal law, foundations are permitted to make grants to individuals and organizations that do not qualify for public charity status if the foundations follow a set of very specific rules outlining their expenditure responsibility. The rules for expenditure responsibility require the foundations to file a number of reports certifying that the funds were spent solely for the charitable purposes spelled out in the grant.
Occasionally funders will make grants to organizations whose tax-exempt status is still pending, but most will ask for proof of your nonprofit status before considering you for funding.
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