Grant Writing FREE Grant Writing Funder Prospect Research Questions and Answers 2 — Questions and Answers
Question 1: Which database is most commonly used by U.S. nonprofit professionals to research foundation giving histories and application guidelines?
- Foundation Directory Online (Candid) (Correct answer)
- Bloomberg Terminal
- LexisNexis
- Dun & Bradstreet
Correct answer: Foundation Directory Online (Candid)
Foundation Directory Online, now part of Candid, is the leading database for researching U.S. foundation grants, trustees, and giving patterns.
Question 2: When conducting prospect research on a potential corporate funder, which financial document provides the most insight into their philanthropic priorities and community investment areas?
- Annual report (Correct answer)
- Balance sheet
- SEC Form 10-K
- Articles of incorporation
Correct answer: Annual report
Annual reports typically include dedicated sections on corporate social responsibility and community giving priorities that reveal philanthropic focus areas.
Question 3: What is the primary purpose of reviewing a foundation's IRS Form 990-PF during prospect research?
- To verify the foundation's grant amounts, recipients, and officer compensation (Correct answer)
- To determine the foundation's marketing strategy
- To assess the foundation's real estate holdings
- To review the foundation's employee benefits packages
Correct answer: To verify the foundation's grant amounts, recipients, and officer compensation
Form 990-PF discloses a private foundation's grants paid, grant recipients, assets, and officer/trustee compensation, making it essential for prospect research.
Question 4: A grant writer discovers that a target foundation has given 80% of its awards to organizations within a 50-mile radius of its headquarters. What does this pattern indicate for prospect qualification?
- Geographic giving preference should be a primary screening criterion (Correct answer)
- The foundation is about to expand nationally
- The foundation only funds capital campaigns
- The foundation prefers government applicants
Correct answer: Geographic giving preference should be a primary screening criterion
A strong geographic concentration in past giving indicates the foundation prioritizes local impact, making proximity a key qualification factor.
Question 5: Which prospect research technique helps identify whether a potential funder's board members have personal connections to your organization's cause?
- Linkage, ability, and interest (LAI) analysis (Correct answer)
- SWOT analysis
- Cost-benefit analysis
- Regression analysis
Correct answer: Linkage, ability, and interest (LAI) analysis
LAI analysis evaluates a prospect's linkage (connections to your organization), ability (financial capacity), and interest (alignment with your mission) to prioritize cultivation efforts.
Question 6: When building a funder prospect profile, what is the most reliable indicator that a foundation will likely fund your program area?
- A consistent pattern of recent grants to similar programs and populations (Correct answer)
- A large endowment size
- The foundation's age and years of operation
- The number of staff listed on their website
Correct answer: A consistent pattern of recent grants to similar programs and populations
A track record of recent grants to organizations with similar missions and target populations is the strongest predictor of funding alignment.
Grant Writing FREE Grant Writing Funder Prospect Research Questions and Answers 2
Which database is most commonly used by U.S. nonprofit professionals to research foundation giving histories and application guidelines?