Private Funding

Private Funding

Private funding is supplied by wealthy individuals, corporations, banks and foundations. A “foundation” is a non-profit organization with a board of directors and trustees which provide funds for various charitable causes. Most foundations have been organized under federal or state charters. Others have been organized under trust agreements. The following generalities in regard to private foundation funding apply pretty much across the board:

• Most foundations will accept a brief letter of inquiry as the initial contact, where- as, with government sources, letters of inquiry are never used.  The applicant will submit either a pre-application or an application. The pre-application can sometimes be as lengthy as an application.
• Many foundations accept inquiries throughout the year.  This is also true of some governmental sources.  However, governmental sources are more likely to have a specific period of time when they will accept applications.  In many cases, this is done once a year.
• Private foundations are less likely to have specific, concrete rating and ranking systems with points assigned to various factors.  Most government sources of funds spell out very precisely how they will rate and rank an application.
• Private foundations are more prone to making decisions based on personal factors.  This could include having personal knowledge of the applying organization or being personally acquainted with one of its staff members.
• Most foundations tend to have less complex requirements for grant administration.  In some cases, a final report may be required. Nearly all federal and state funding agencies require some sort of formalized reporting procedure and may have other administrative requirements which must be followed
• In line with the idea that foundations are freer to choose their grantees without benefit of a formal rating system, some only give grants to pre-selected organizations. The family or individuals funding the foundation may have an interest in certain subject matter and wish to support only that particular cause.
• Most foundations are not able to make large grants and, in general, support smaller projects.
• Foundations are not under the same scrutiny as state and local government funding programs, and thus are freer to utilize their own rules and regulations.  Federal and state funding sources must abide by the laws governing their grant programs as well as the regulations which have been developed to ensure that those laws are followed.  This gives private foundations a much greater degree of internal control.  Governmental agencies are bound by the strictures put into place by Congress and the various state legislatures.