Grant Writing Funder Prospect Research 3 — Questions and Answers
Question 1: Which tool allows grant seekers to search for federal government grant opportunities across all US agencies?
- Grants.gov (Correct answer)
- USASpending.gov
- SAM.gov
- EDGAR
Correct answer: Grants.gov
Grants.gov is the official federal portal where all US government agencies post grant opportunities for organizations to find and apply.
Question 2: When researching a community foundation, which factor is MOST important for determining eligibility?
- Your organization's service area overlaps with the foundation's defined community (Correct answer)
- Your budget exceeds $500,000 annually
- Your organization has 501(c)(4) status
- Your project is innovative and untested
Correct answer: Your organization's service area overlaps with the foundation's defined community
Community foundations serve specific geographic regions, so your organization must operate within that defined community to be eligible.
Question 3: What is a 'letter of inquiry' (LOI) in the grant prospecting process?
- A brief pre-application document sent to gauge a funder's interest before submitting a full proposal (Correct answer)
- A formal legal notice requesting grant funds
- A follow-up letter after a grant is denied
- A reference letter from a board member
Correct answer: A brief pre-application document sent to gauge a funder's interest before submitting a full proposal
An LOI is a short document that summarizes your project and asks if the funder is interested in receiving a full proposal.
Question 4: Which section of a private foundation's 990-PF reveals the names of the foundation's officers and directors?
- Part VIII — Officers, Directors, Trustees, Foundation Managers (Correct answer)
- Part IV — Capital Gains and Losses
- Part I — Revenue and Expenses
- Part XI — Distributable Amount
Correct answer: Part VIII — Officers, Directors, Trustees, Foundation Managers
Part VIII of the 990-PF lists all officers, directors, and trustees, which is critical for identifying relationship connections.
Question 5: A grant researcher discovers that a target foundation's largest past grants went to organizations with operating budgets over $5 million. Your organization has a $300,000 budget. This suggests:
- The foundation may prefer larger, established organizations and may not be the best fit (Correct answer)
- You should inflate your budget figures in the application
- You should apply anyway since past grants don't predict future ones
- The foundation is required by law to fund smaller organizations next cycle
Correct answer: The foundation may prefer larger, established organizations and may not be the best fit
Funder giving history is one of the strongest indicators of organizational size preference, and a significant mismatch signals low fit.
Question 6: Peer prospect research — asking colleagues at similar nonprofits about their funders — is considered:
- An ethical and valuable intelligence-gathering strategy (Correct answer)
- A violation of grant confidentiality agreements
- Only appropriate for government grants
- Irrelevant because each funder is unique
Correct answer: An ethical and valuable intelligence-gathering strategy
Networking with peer organizations to share funder intelligence is a standard and ethical practice in the nonprofit sector.
Question 7: What does 'payout requirement' mean for a US private foundation?
- A foundation must distribute at least 5% of its assets annually in qualifying distributions (Correct answer)
- A foundation must spend all its assets within 10 years
- A foundation must match government grants dollar-for-dollar
- A foundation must pay corporate taxes on investment income
Correct answer: A foundation must distribute at least 5% of its assets annually in qualifying distributions
IRS rules require private foundations to distribute at least 5% of their net investment assets each year, primarily through grants.
Grant Writing Funder Prospect Research 3
Which tool allows grant seekers to search for federal government grant opportunities across all US agencies?