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What’s this about? This page introduces some key considerations for certain activities that your organization may conduct, such as grantmaking.

What do I need to do? Review the relevant sections of this page based on the activities you intend to conduct through your organization.

Contents

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Further reading

• COF: International Grantmaking Regulations
• Erika’s Newsletter: Erika’s quick-start guide to research nonprofits </aside>

Key concepts

Awarding grants

A grant is a fund given by an individual or entity (typically a nonprofit) to another individual or entity (also typically a nonprofit) for a specific purpose linked to public benefit.

• Grants are generally given without the awarding body expecting anything in return. Therefore, the payor should have no financial or other benefits concerning the grant or scholarship.

• Grants are usually given by:

  • Government
  • A public foundation or company
  • A private foundation or company

• Unless the grantee (person or organization receiving the grant) is a public charity organization, grant funds are considered regular income or revenue for the grantee in most cases. Therefore, these types of grants (regarded as wages) will follow the typical income tax rates you have been paying as an individual.

• Grant money becomes taxable income if it’s:

  • used for incidental expenses or paid directly as a stipend, compensation, or payment for teaching, research, or other services required as a condition of receiving the scholarship.
  • awarded by an employer unless it is proven to be employer-provided training (further studies for maintaining professional competence).

• This rule has a few exceptions, but they are limited and specific. Most countries have similar rules; see the IRS Guidance for general reference.

• If your organization intends to award grants, make sure you understand the five key stages: evaluation, grant agreement, due diligence, payment processing, and monitoring and evaluation (M&E).

• IRS definition of grants

• Due diligence

• Monitoring & evaluation (M&E)

• M&E checklist

Running scholarships & fellowships

”Scholarships” and “fellowships” are often used interchangeably, and both refer to activities and funding that support students to pursue their studies.

• Fellowships are often more research-focused (vs. generic academic pursuits), targeting graduates and and typically awarding higher stipends.
• If you intend to run scholarships or fellowships through your organization, make sure to create a detailed program plan with clear processes for awarding and transferring money, and tracking outcomes.

Hosting events & workshops

Hosting in-person events, like workshops or conferences, brings a number of challenges relating to payments, logistics, volunteer management, and even safeguarding.

• If you intend to host events or workshops through your organization, make sure you have an events policy introducing a code of conduct that staff, facilitators, and participants must adhere to.

• An events policy can set clear expectations; reduce liability for your nonprofit in case legal issues arise; foster an inclusive environment; improve crisis management; and comply with funding/partnership requirements.

• Locations for hosting retreats in the Bay Area

Working with the government

Government contractors in the United States may need several identification numbers and codes to engage in federal contracting.

• The most commonly required are DUNS, CAGE, and SAM numbers.
• DUNS Number (Data Universal Numbering System)
• CAGE Code (Commercial and Government Entity
• SAM (System for Award Management)

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