RESOURCES - Grant Glossary of Terms

501(c)(3): A section of the Internal Revenue Service tax code. Often used as shorthand to designate an organization that has been accorded nonprofit status by the IRS. Funders and contributors will often require proof of 501(c)(3) status before making a grant or contribution. Donations to 501(c)(3) organizations are deductible from federal income taxes as charitable contributions; donations to other kinds of organizations may not qualify as charitable contributions.

Capacity-building grants: A growing number of funders are interested in helping nonprofits build "capacity" through their grantmaking -- but even the funders are far from consensus on what exactly that means. In our training, we offer the following working definition of "capacity-building grants": "Capacity-building refers to activities that strengthen a nonprofit organization’s internal operating structure so that it can be more effective and/or more efficient in working toward fulfilling its mission." Another way to look at this: Capacity-building feeds and strengthens the roots and trunk of the tree (the internal structure) so that the tree can produce more and better fruit (programs and services). Typical broad categories of capacity-building include: Board development; staff/volunteer development (but not training for specific service areas); marketing and communications; technology; governance; leadership development; strategic planning; accounting and records systems.

Capital/building grant: “Bricks and mortar” funds, used to purchase land and construct, renovate or substantially rehabilitate buildings and facilities. Also refers to major equipment purchases (computer systems, fleet vehicles, etc.).

Donated products: Any goods, products, equipment, or other tangible property that is donated to an organization to become its property and for its use. These can include consumable products (such as food items, paper goods, office supplies, etc.) as well as furnishings, computer equipment, automobiles, etc. Donated products are part of an agency's “in-kind” support and should be included in an agency's budget, at fair-market value.

Full proposal: A complete, written “business plan” for the project or idea you are proposing for funding. A “full proposal” differs from a “letter proposal” only in the degree of detail it contains; the basic components are identical. Requirements vary widely from funder to funder about length, format, and contents of a full proposal; be sure to check guidelines carefully.

A full proposal typically includes:
** Cover letter
** Introduction: History, mission and accomplishments of the applicant agency
** Summary: A brief mini-proposal covering the major points of the proposed project.
** Issue statement: What is the situation your proposal will address?
** Targets or success indicators: What changes do you hope to make in this situation?
** Methods/strategies: The who, what, where, when and how of your program or project concept
** Evaluation: What steps will you take to measure your success and to make course adjustments and technical improvements?
** Future or continuation funding
** Budget
** Attachments and appendices

Letter of inquiry:A brief letter to assess a potential funder's interest in considering your proposal for funding. Unless the funder specifies otherwise, a letter of inquiry is never more than one page long. It should include: (a) A few sentences of background on your agency; (b) a very brief description of the project or service you're proposing; (c) the specific dollar amount that will be requested; and (d) an explanation of why you believe your proposal matches the funder's priorities and interests. A funder will occasionally make a grant award on the basis of a letter of inquiry. More often, the funder will ask for a full proposal if the idea is of interest.