As funders we have our own ways to size up the groups that want to get on our "groups that matter" list, crossing the first hurdle in the path to receiving funding. And how we size up group does indeed matter in the big thinking on small grants world.
It matters because we may be using a sizing up yardstick that just doesn't work for grassroots groups. When groups don't measure up according this yardstick, they may not make it onto the "groups that matter" list. Or we may offer them technical assistance or make grants with strings attached to help them measure up. Or as a program officer, you are not equipped to answer questions that your distribution committee or board members might asking in a way that assures the most risk-adverse members that the grant that you are proposing isn't fraught with danger.
I have had an ear to the ground recently about how funders regard groups that have not been recognized by the IRS as public charities - listening because so many grassroots groups don't have (and don't need) this status. A survey that Grassroots Grantmakers conducted earlier in 2013 surfaced some interesting perceptions about funding non-501(c)(3)'s - such as providing grants to non-501(c)(3's is not permitted by law or that grants to non-501(c)(3)'s can never count toward a foundation's payout requirements. These are simply perceptions that are not based on accurate information.
Providing accurate information should take care of that, right? I don't think so. I think there is something about using the 501(c)(3) status as an entry-level mechanism of credentialing that is at work here. Since funding non-profit organizations is the main-course type of funding that most foundations do, it is understandable that taking away a basic tool in a program officer's credentialing toolkit might cause some uneasiness, especially if you're not sure what other tools (or yardsticks) to use.
We all know that even for established non-profits, having a 501(c)(3) is not sufficient as a stand-alone seal of approval. And that's why normal funding due diligence processes go along with checking on an organization's 501(c)(3) status. We can all probably tell a horror story an established non-profit that has had a 501(c)(3) designation for decades and completely bombed with a project looked great on paper. But there is indeed some comfort in knowing that a group that is new to you has persevered through the process of requesting 501(c)(3) status.
Without the 501(c)(3) letter of determination as a starting point, how DO you begin to credential an informal citizen sector group of community residents - a group that most typically has no staff, no office and possibly not even a bank account? I invite you to join me here in what you do, but here's a few thoughts from me as a start.
Since we're talking about everyday people moving an idea into action together, each contributing their time, talent and treasure to the effort - look for "group-ness". For me that means that the idea has been developed by more than one person and that more than one person has some skin in the game. One person might serve as a spokesperson, but when you did just a little deeper, you should be able to easily find at least two more people's energy, creativity, passion, and commitment to this effort.
- When you're beginning to credential an informal citizen sector group for funding, I think that three signatures on the grant proposal form is more important than a 501(c)(3) determination letter from the IRS.
- I also think that paying attention to who is speaking and how they speak is an important indication of "group-ness". Do you hear I and my or we and ours? Does the same person always show up to represent the group? And if different people show up, are they knowledgeable about the idea or mainly there as moral support?
- Can you spot some fun? When people are voting with their feet (vs. being involved because it's their job), and when they launching into something that is just at the tip of a bigger ice-burg question (as is usually the case for first time projects, right?), it's really important for fun to be somewhere in the picture.