How to use this checklist
Grant readiness is not about writing well. It is about whether your organization can pass eligibility screening, survive due diligence, and administer restricted money once it arrives. Reviewers check most of the items below before your narrative is ever scored.
Go through each section and mark every line honestly as done, partial, or missing. Then use the scoring guide at the bottom to decide which kinds of funders are worth your time this quarter. Most gaps are documents you can adopt in an afternoon — the expensive ones are outcome data and cash reserves, so start those now.
1. Legal and tax standing
6 checksAlmost every funder verifies this before reading a word of your proposal. If any line here fails, fix it first — nothing else in the checklist matters until it passes.
IRS determination letter on file
The letter granting 501(c)(3) status, with your EIN. Keep a PDF ready to attach. No letter yet? Apply through a fiscal sponsor in the meantime.
Form 990 filed for the most recent year
Three consecutive missed filings revoke your exempt status automatically. Funders check your filing history on the IRS Tax Exempt Organization Search.
Listed and accurate in IRS Tax Exempt Organization Search
Search your EIN. If the name, address, or status is wrong or missing, resolve it with the IRS before applying — automated eligibility checks will fail you.
State charitable solicitation registration current
Most states require registration before you fundraise there. Some funders ask for the registration number outright.
SAM.gov registration active (federal applicants only)
Required for any federal award, and it takes weeks. Renew annually — an expired registration blocks submission on the deadline day.
Good standing with your Secretary of State
Annual reports filed, corporate status active. A lapsed nonprofit corporation is a disqualification even when the IRS status is fine.
2. Governance
5 checksFunders read governance as risk management. They are asking whether an independent body is watching the money.
Board of at least five unrelated members
Three is the common legal minimum, but a small or family-dominated board reads as a control risk. List names, affiliations, and terms.
Board meets at least quarterly, with minutes
Signed minutes are the evidence. Some funders request the last year of them during due diligence.
Conflict of interest policy signed annually
Question 12b on Form 990 asks whether you enforce one. Answering no invites scrutiny.
Current bylaws, amended and dated
Bylaws that contradict your actual practice — board size, officer terms, quorum — are a common finding in due diligence.
Written whistleblower and document retention policies
Both are Form 990 questions. They take an afternoon to adopt and remove an easy point of doubt.
3. Financial readiness
7 checksThis is where most first-time applicants are actually turned down. Grants are reimbursement-shaped: you spend, then you document, then you get paid.
Board-approved annual operating budget
Dated and approved in the minutes. A budget with no board approval date is a red flag.
Financial statements for the last two fiscal years
Statement of activities and statement of financial position at minimum. Audited if your budget exceeds the audit threshold in your state or the funder's requirement.
Accounting system that tracks restricted funds separately
You must be able to show exactly what a specific grant paid for. Class or fund tracking in your accounting software is the practical answer.
Written cost allocation method for shared expenses
How rent, insurance, and a shared director's time get split across programs. Federal funders will ask for the method in writing.
Cash reserve or line of credit to cover reimbursement lag
Reimbursement grants can leave you 30 to 90 days out of pocket. Know how you will front the cost before you accept the award.
Indirect cost rate identified
Either a federally negotiated rate or the 15% de minimis rate now available to most recipients under 2 CFR 200. Not claiming indirect costs quietly underfunds your organization.
Segregation of duties in cash handling
The person who writes checks should not be the person who reconciles the bank statement. If your team is too small, a board treasurer reviewing statements monthly is an acceptable substitute — document it.
4. Program and evidence
6 checksReviewers score whether the plan is specific enough to be believed and measured. Vague good intentions lose to concrete numbers every time.
Mission statement in one sentence
Who you serve, where, and what change you create. If it takes a paragraph, it will not survive a reviewer's skim.
Documented need with a local, cited statistic
Census, state agency, school district, or health department data for your actual service area — not a national figure.
Written logic model or theory of change
Inputs, activities, outputs, outcomes. One page. It makes every future proposal faster to write.
Two to three years of outcome data
Number served, and at least one measured change per year. New organizations should substitute pilot data plus the founders' documented track record.
Data collection system already running
Attendance logs, intake forms, pre/post surveys. Promising to start collecting after the award is a weak answer.
Signed MOUs with every named partner
A partner listed without a letter or MOU is treated as aspirational. Get them before the deadline, not after.
5. Organizational capacity
5 checksCan you deliver the program and the paperwork at the same time? Funders look for staff, systems, and insurance.
Job descriptions and resumes for key project staff
Including any position you plan to hire with grant funds. Attach a description even when the role is vacant.
Organizational chart
One page, showing who reports to whom and where the project sits.
General liability insurance, and D&O coverage
Directors and officers coverage in particular signals a governed organization. Many funders require certificates.
Someone owns grant reporting
A named person with calendar time reserved. Late reports are the fastest way to lose a renewal.
Background check policy if you serve minors or vulnerable adults
Written, applied to staff and volunteers, and documented.
6. Materials on hand before you start writing
6 checksAssemble this folder once. It converts a three-week scramble into a two-day application and lets you say yes to short-deadline opportunities.
Boilerplate organization history and description
150, 300, and 500-word versions. Portals impose different character limits.
Board list with affiliations and terms
Updated within the last three months.
Current year budget and last two audits or financials
As PDFs, named clearly, in one folder.
List of current funders and grant amounts
Funders ask who else is at the table. Other committed money makes you look less risky, not more.
Two to three letters of support, refreshed annually
Dated within the last year. Stale letters are noticed.
High-resolution photos and a program one-pager
With consent releases on file for anyone identifiable.
Score yourself
Count the lines you can honestly check today out of 35.
Apply broadly
Including federal opportunities. Your bottleneck is finding enough good-fit funders, not readiness.
Apply to private foundations
Target local and regional foundations while you close the remaining gaps. Skip federal until financial systems are complete.
Build first, or use a fiscal sponsor
Spend 60 to 90 days on the legal, governance, and financial sections. A fiscal sponsor lets you pursue funding in the meantime.
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Grant readiness FAQ
- How long does it take to become grant ready?
- An organization with 501(c)(3) status and a functioning board can typically close the remaining gaps in 60 to 90 days, because most items are documents to write and adopt rather than money to raise. Building two to three years of outcome data is the item that cannot be shortcut.
- Can a brand new nonprofit get grants?
- Yes, but rarely from federal sources in the first year. New organizations usually start with small local foundations, community foundations, and corporate giving programs, or apply through a fiscal sponsor while their own determination letter is pending.
- What is the most common reason nonprofits are rejected?
- Beyond simple ineligibility, the most common reasons are a need statement supported by national rather than local data, objectives that are activities instead of measurable outcomes, and financial systems that cannot track restricted funds separately.
- Do I need an audit to apply for grants?
- Not usually for smaller private foundation grants, where reviewed or even board-approved internal financials are accepted. Audits are commonly required above a state-specific revenue threshold and for most federal awards over the single audit threshold.
- What is a fiscal sponsor and when should I use one?
- A fiscal sponsor is an existing 501(c)(3) that receives and administers grant funds on your behalf for a fee, typically 5 to 10 percent. Use one when your determination letter is pending, when a specific funder requires a track record you do not yet have, or for a one-time project that does not justify a new entity.
- Does a higher indirect cost rate hurt my chances?
- Claiming a legitimate indirect rate does not by itself weaken an application. Most federal recipients may claim the de minimis rate under 2 CFR 200 without negotiation, and reviewers are more concerned with an unrealistically low rate that suggests the budget is not sustainable.
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