Due Diligence

What makes an organization Good to Grant?

Nonprofits

Foundations are advised to grant only to those organizations that are recognized by the IRS to be eligible to receive tax deductible donations. In very simple terms, a foundation should be able to make a grant to an organization with a Determination Letter from the IRS granting them 501(c)(3) status; however, it's not that simple for the following reasons:

1. The Determination Letter could be outdated and the organization may have lost their status in the meantime
2. The organization could be a 501(c)(3) yet while still tax exempt, a granting foundation may have Expenditure Responsibility based upon the organization's Foundation Status

The IRS provides listings and updates to inform the public of each nonprofit's tax-deductibility and tax-exempt status. This data is free to the public in the form of Publication 78 and the Business Master File (BMF), but it's not easy to use. Grantr makes the data easy to use by giving you all the data that the IRS has as soon as it's released to the public, including the IRS Weekly Bulletins. We also provide a preliminary assessment on whether an organization is Good to Grant or not based upon the criteria published by the Council on Foundations. 

We highly recommend that you familiarize yourselves with the Council on Foundations' excellent website and be sure to learn all about the due diligence process. Keep in mind, that there may be organizations that don't immediately meet the strict Good to Grant requirements, but with proper due diligence and possibly expenditure responsibility they could still be eligible to receive a grant.

Schools

Schools and School Districts are Good to Grant if they appear in the NCES listing.

Good to Grant Legend

	Nonprofit: The organization is in good standing as a 501(c)(3), appears in Publication 78, and does not require Expenditure Responsibility according to their BMF foundation status. School: The school or school district is listed with NCES
	The organization is not in Publication 78, or they require expenditure responsibility based upon their foundation status. One exception is with a 509(a)(3) supporting organization that may not require expenditure responsibility. See the Council on Foundations' website for more on this.