WHAT DOES 501(C)3 MEAN?
To be recognized as a non-profit under U.S. law, an organization must register with the Internal Revenue Service. A "501(c)3" organization is an organization that has registered under Section §501(c)3 of the federal tax code. They're a non-profit, tax-exempt organization.
In order to register, the organization has to have a certain structure, including officers who will take responsibility for the organization. And once an organization has been approved by the IRS as a 501(c)3, it has to follow certain rules -- for example, it can't do political lobbying. It also gets certain privileges, like being allowed to get foundation grants.
Most U.S. foundations only make grants to 501(c)3 organizations.
WHAT'S A FISCAL SPONSOR?
Since many community groups do not want to be 501(c)3 organizations for various reasons, they look for other ways to qualify for grants. One solution is to link up with a organization that is a 501(c)3, and ask them to accept grants on your behalf.
The 501(c)3 fiscal sponsor accepts funding on your behalf and holds it for you. When you want to spend grant money, you ask them to release the funds. The fiscal sponsor is legally responsible for proving that the grant money has been spent on non-profit purposes allowed by U.S. tax law. So they may ask you to provide receipts or other information for their own records.
They may also charge you for the service of being your sponsor -- either because it requires some administrative work, or because they need to fund their own work. Fiscal sponsors usually take a percentage of the grant money you ask them to hold for you. They might take a small amount, like 3%, or a much larger amount, like 12%. Sparkplug encourages our grantees to find low-cost fiscal sponsors.
A fiscal sponsorship arrangement should be written down and signed by the sponsor and the grantee. When Sparkplug makes a grant through a fiscal sponsor, we ask for a copy of that signed agreement.
HOW CAN I FIND A FISCAL SPONSOR FOR MY PROJECT?
First, ask any of the community organizations or religious institutions (churches, temples, mosques, etc.) that you work with. Any one of them may agree to be your fiscal sponsor or refer you to an organization that will. Then ask other people doing the same kinds of work if they have a fiscal sponsor for their projects. Check the website of the Foundation Center to find foundations in your region that might agree to be a fiscal sponsor for your project.
HOW CAN I WRITE A MORE EFFECTIVE PROPOSAL?
Many proposals are good at describing a problem they're addressing, but become vague when they talk about how they plan to address it. Be specific. Instead of giving general statements about what you want to accomplish, write down the steps you'll use to get there, the people and materials you'll need to do it, etc. Define the need or issues you're addressing. Tell us how you know you've chosen the right way to tackle it. Tell us what other groups you'll be working with and how many people will be affected by the project. Tell us how you'll know if you've been successful.
If you would like to submit materials illustrating your work to support your grant, we'd love to see them, but we can't return them. Please send them to us at:
Park West Finance Station
P.O. Box 20956
New York, NY 10025
Please do not send any portion of your grant proposal by mail. We are a small foundation and try to make the most of our resources by keeping all our records electronically. We cannot accept paper-based grant proposals. If you don't know how to upload the required materials, see "How do I make and upload a PDF file?" below.
HOW DO I MAKE AND UPLOAD A PDF FILE?
This application requires you to create and upload PDF files. Both Word and Excel give you the option to save a file as a PDF. If you are using Open Office or Pages, you need to Export the file as a PDF file. Save it to your hard drive.
As a last resort, below is a widget that will create PDF files from most common files. Choose the file you want, enter your email address and click "Convert and send". You should get a PDF sent to your inbox within a few minutes.
|Convert a document to pdf|
|Free PDF Creator|
To upload the file, click on the link in the application that asks you to upload a file. A window opens asking you to "Choose a file." Find the file you need on your hard drive, click on it and then click on "Upload".
WHAT OTHER HELP CAN SPARKPLUG OFFER ME?
We are willing to help you put your best foot forward on your grant application. If you have any questions as you go through the process, please call us or email us and read the other FAQs on this page.
IF MY PROPOSAL IS NOT FUNDED, WHERE CAN I GET SUPPORT?
Often there isn't enough money to fund all the qualified applicants in a particular round, for example, but in many cases the proposal does not meet our guidelines. If we're unable to fund your request, don't give up. You can check the website of the Foundation Center, which has a huge national database of foundations, organized by subject areas and by state. It tells you what each foundation supports, and how to contact them.
You can also find other organizations doing work similar to yours, and find out who funded them.
Most important, there may be local resources you can tap: businesses, professionals, religious institutions, and sympathetic people who are willing to support you -- if you ask. Some will support your project just because they think it's important, while others may want public recognition in exchange for support. Community funding should be a part of every organization's plan. Foundation funding, often, is not as reliable as support from a community that knows you and believes in your work.
FINDING EQUIPMENT DONATIONS
Sparkplug is receiving funding requests for computers and other big-ticket items. Since equipment can use up so much of the limited funds available -- and since we'd rather use the money to pay for your time and work -- We encourage you to ask businesses for donations yourself! Tell them about the good work you're doing, and explain what your organization needs. Businesses often donate in order to build their reputation in the community. And they get a tax break for helping you, too! Asking for free things may feel uncomfortable to you at first, but businesses (especially big stores) are used to it.
THE DEBATE OVER 501(C)3 NON-PROFIT STATUS
There's an ongoing debate among community organizations about whether foundation funding -- and the rules that come with it -- is all good. Consider it for yourself. Here's a link to the debate:
The Revolution Will Not Be Funded:
(by INCITE! Women of Color Against Violence)