There are primarily two types of grants. We have private grants, or foundation grants, and then we have another type which is the public, or federal grant. In one sense, these private foundation grants are foundations that have been established that are required to give a certain percentage as required by law to be a foundation. The percentage is about 5% of their monies that they have to give away every year. As a result the foundation receives a tax break. Each of these foundations are set up and they have a specific focus: children's program, youth program, maybe AIDS crisis program, drug prevention programs.

Then the other grants are the federal grants. These federal grants are sometimes sent to the state level, then to the cities, then the cities issue out the grants. Or, sometimes it comes straight from the federal government. There are different types of ways to get federal grants. Who are the donors to the federal grant? You and I! We all issue out the grants for the government with our tax dollars.

Here's are the branches of government, there is the judicial branch, but it does not give out grants. The other two have a controlling factor with giving out money. There is the executive branch as well as the legislative branch. The legislative branch makes laws, and they appropriate funds for the areas for which they will give money. Then the executive branch begins to manage those funds and they keep a list of all of the government grants. All the government grants are housed in what is known as the Catalog of Federal Domestic Assistance.

Let's take a look at private foundations. Here are some of the characteristics of private foundations. These may be foundations that stem from corporations. For example, Wal-mart has a lot of money, so they may give out the funding through their foundation and get a tax break.

Private grants will most often only give out money to 501 (c) (3) organizations. This status comes from the IRS, and the IRS gives you the approval to become a 501 (c) (3). Most foundations will not give money to a nonprofit organization that does not have this status, and typically, most of these foundations will want to make sure that the 501 (c) (3) has been in existence for at least 2 years. Most of the grants that are given out from the States will want to see some history because they want to see that this is not a nonprofit that's a fly-by-night. Don't waste your time unless you have the status.