Cold prospecting for foundations is slow. You read a mission statement that sounds close, spend an hour on the website and learn at the end that the foundation only funds a different state, or only organizations it invited. A better starting point is evidence: which foundations have already paid grants to organizations like yours?
This article shows how to trace that money. You'll learn how to follow your peers, how to read the grant lists in a private foundation's tax return, and how to qualify a prospect before you invest time in it.
Start with your peers
Make a list of five to ten organizations that resemble yours. They should serve a similar population, run similar programs and be roughly your size, in your region or in comparable ones. Then look for their funders in places they publish on purpose:
- Annual reports and donor lists. Many organizations thank their funders by name, sometimes by giving level.
- Websites and event materials. Sponsor pages, gala programs and "our supporters" pages show who they work with.
- Press releases and news coverage. Announcements of new grants usually name the funder and the purpose.
For each peer, record the funder, what it supported and, if it's listed, the amount. Don't copy a list blindly. A funder that backs a peer's capital campaign tells you something different from one that backs its youth program. Note what the money was for.
Read the foundation's tax return
Private foundations file the IRS Form 990-PF, and the form is built to show where the money went. Its supplementary information part has lines for grants and contributions paid during the year and for those approved for future payment. The IRS instructions tell foundations to give, for each, the recipient, the amount and a specific purpose. They add that entries such as "grant" or "contribution" are unacceptable as a purpose, so the statements should say what the grant was for. The instructions also provide status codes for each recipient, including a code for public charities, which lets you pick out organizations like yours.
The IRS instructions say outright that this information benefits the grant seeker: applicants learn the eligibility requirements, and the foundation should receive only applications that follow them. Part numbering has changed between form years, so look for the supplementary information part and the grants lines rather than a fixed part number.
Where to find the return
A private foundation must make its annual returns available for public inspection. Under the IRS instructions, it does that through office visits, by providing copies and by internet posting. The IRS's Tax Exempt Organization Search also covers Form 990-series returns, which include the 990-PF. Search for a foundation by name, open its most recent return and go to the grants lists.
A hypothetical read
Say a youth arts nonprofit in a mid-size city finds a foundation on a peer's donor list. The foundation's return lists five grants to arts organizations in the same state:
| Recipient (public charity) | Purpose | Amount |
|---|---|---|
| Arts nonprofit A | After-school arts classes | $10,000 |
| Arts nonprofit B | Summer teaching artists | $15,000 |
| Arts nonprofit C | Youth mural program | $15,000 |
| Arts nonprofit D | Instrument purchase | $25,000 |
| Arts nonprofit E | Program expansion | $35,000 |
| Total | $100,000 |
The grants average $20,000, and the middle grant is $15,000. For a first request, asking for $15,000 to $25,000 for a youth program fits the pattern. Asking for $100,000 does not. The purposes also show what the foundation likes to fund: classes, teaching artists and equipment.
What to look for in the grant lists
Once you have a return open, read it for patterns, not just totals:
- Paid versus approved for future payment. The first shows what the foundation gave during the year. The second shows commitments it made but hadn't paid, which can reveal multi-year grants.
- Repeat recipients. If the same few names appear year after year with no new ones, the foundation may favor long-standing relationships. A list with many one-time recipients suggests more room for new applicants. Compare two or three years of returns before you decide.
- Individuals and organizations. The instructions say that, where needed, a foundation attaches a schedule listing amounts given to individuals separately from amounts given to organizations. A foundation that mostly funds individuals will not be a match for an organizational request.
- Recipient location. Addresses on the list show how far from home the foundation really gives, whatever its mission statement says.
- Purpose wording. The phrases a foundation uses to describe its grants are a clue to the language it responds to. Echo them honestly in your own inquiry where they match your work.
Keep notes in one place as you go: the foundation's name, the years you reviewed, the range of grants that match your work and any questions to answer from its guidelines.
Qualify the prospect before you invest
A grant list tells you what a foundation did. It doesn't tell you what it will do. Use the return to build a short list, then qualify each name with three checks:
- Is it open to applications? The 990-PF instructions provide a box for foundations that only make contributions to preselected charitable organizations and don't accept unsolicited applications. If a foundation checks it, an application from you is unlikely to be considered. Confirm on the foundation's own website.
- Where does it give? Check the foundation's stated geographic limits and compare them with the locations of the recipients on its grant lists.
- What is the typical grant size? Compare the amounts with your request, as in the example above.
Then read the foundation's current guidelines. A return reflects a tax year that has already ended, and priorities, deadlines and application processes can change. The guidelines and any published cycle dates are the authority. For how foundations time their decisions, see foundation and corporate grant cycles.
Add other sources
Tax returns are one route. Others include:
- Foundation databases. Some are paid services. Ask your local library whether it provides access to any, and check the provider's own pages for the terms.
- Community foundations. The Council on Foundations describes a community foundation as a grantmaking public charity dedicated to improving the lives of people in a specific local area. Its website has a locator tool for finding the one nearest you.
- Your own relationships. Board members, volunteers and past funders may know who funds your field. For more on this, see researching foundations.
Your next step
List five peer organizations and their foundation funders. For the two funders that appear most often, find their latest Form 990-PF, read the grants lists and record the typical amount and the stated purposes. Then read each foundation's guidelines to see whether it accepts unsolicited requests. If it does, a conversation or a brief inquiry is the usual next move, and you can read about how to talk to a program officer before you reach out.
SoliContraX can pick up once a foundation invites a proposal. Upload its guidelines, approve a concept and work from a draft written from your own materials and checked against what the foundation asked for. See how to get started.