One way businesses of all sizes can give back to their community is by setting up corporate grants. Corporate grants are tax-deductible funds sent to a charity or individual based on the strength of their application.
Your company can set the parameters for which charities or individuals have the opportunity to apply for the grant, the amount of grant dollars, and what the goal is for the grant money. Generally, companies decide on these parameters based on their missions, budgets, and brand strategies.
Corporate grant management is the overall process of deciding eligibility rules, engaging charities or individuals for applications, and reviewing and approving a grant winner.
To answer these common questions, in this blog, we’ll review:
- Corporate grant types
- The grant management process
- How to use technology to create and manage corporate grants
Types of Corporate Grants
Corporate grants are tax-deductible funds awarded by corporations to individuals and/or charities. Typically, these grants help facilitate a particular social cause and do not need to be paid back. That said, grants come with restrictions and guidelines for the grantees to track progress and ensure the grant’s goal is met.
So, when a company sets up a corporate grant, it needs to have a clear goal to make it easy for the grantmaker to manage and for potential grantees to know whether they’re eligible.
Let’s review 3 common types of corporate grants and what sets them apart:
Giving Directly to a 501c3:
The most standard setup for companies is to fund grants only for organizations that qualify for public charity status, as set out by Section 501c3 in the Internal Revenue Code. Since grants are usually tax deductible, the IRS must consider the organization tax exemptible. For example, organizations that have charitable, educational, scientific, or literary purposes qualify.
Companies will choose a social cause they want to support and make that a determining factor for which public charities can apply. Once charities apply for the corporate grant, the company will undergo a process to review and approve them for the grant.
Scholarship/Educational Grants:
Many corporations set up scholarships or educational grants to either give to individuals or directly to educational institutions on an individual’s behalf.
Corporations that set up company scholarship programs will not qualify for tax exemption if:
- There is preferential treatment for employees, children/relatives of employees, or the children of deceased or retired employees beyond what’s needed for initial qualification.
- There is an extra pay or employment incentive for employees.
Independent parties must also monitor the company scholarship grant.
Employee Relief Grants:
To focus on corporate social responsibility within their organization, a company can set up an Employee Relief Fund to help employees cope with unexpected financial crises.
These grants must be within legal guidelines for the IRS to consider them “charitable.” Companies will work with a 501c3 public charity so that employees do not have to pay taxes when they withdraw funds or donate to the fund. When you use Givinga’s Philantech® platform, they can help you set up any type of Corporate Grant, including Employee Relief Grants, via their nonprofit partner.
Once you’ve decided which corporate grant type you want to set up, you’ll need to manage the grant, which we’ll cover in more detail.
The Grant Management Process
Grant management is how companies oversee their corporate grant lifecycles from application intake to grant closeout. This management process is how companies track grant performance and maintain proper financial transparency to satisfy their corporate social responsibility goals. Many companies use technology to support their corporate grant program and seamlessly track all vital information for them, which we’ll cover in the next section.
A basic lifecycle for a corporate grant looks like this:
- Grant Request Form: First, the grantmaker must define the program’s goals and build a form. The form should capture details from applicants to check that they align with your company’s defined mission for the grant (such as social justice or food insecurity). You can include questions on the form about a charity’s 501c3 status, location, and current projects or initiatives so the applicant can share how they will use the funds and their potential impact.
- Application Evaluation and Award Decisions: During an application evaluation, a committee of internal and external members will review all applications and decide on the grant’s winners. The grantmaker will send the winner a grant and notify other applicants of their status.
- Donation Payment and Use: Most companies will send charities or donors grants without restriction. However, some companies use an approach called directed grants instead. This approach has companies define specific use cases for their grants and require charities to provide follow-up details on fund usage and impact.
How To Use Technology To Create & Manage Corporate Grants
Large enterprise companies have the resources and in-house expertise that smaller companies may not have to run and manage grant programs. However, technology can help businesses of all sizes run effective grant management programs and maximize the impact of their generosity.
Many small and medium-sized companies use Givinga’s Philantech® platform for their grant management needs. Our technology allows companies to define application rules, connect with vetted causes and charities, and automate the corporate grant management process. Philantech® has a completely customizable all-in-one grant management tool so your company can easily create corporate grants and make grant management seamless for all parties. You’ll also have access to our corporate grant experts and the ability to plug the tool into a larger corporate giving program to reduce administrative time for your team.
For example, Meenta is a biotech company that uses Givinga’s charitable giving technology to create and administer grants without wasting time or money on administration and overhead. Their program, Curesology, allows donors worldwide to fund grants for specific scientific research efforts directly. With Givinga’s grant management technology, Meenta provides their grantmakers with a high degree of financial transparency into where the money is going for scientific discoveries.
Streamline and Optimize the Corporate Grant Management Process With Givinga
Givinga provides technology solutions that help companies cultivate everyday philanthropy and create a culture of giving. Corporate grants are a great way for companies to positively impact society and their internal organization. We make it easy for companies to both set up and manage their grants.
With our completely customizable platform features, your company can simplify the grant submission, approval, and distribution process:
- Grant Submission: Your company can easily set up any type of corporate grant, invite anyone to donate or apply, and create eligibility rules. We’re actively working with companies implementing Grant Management programs for Employee Compassion Funds, Employee Scholarships, and scientific research programs.
- Approval & Distribution: These rules help grant committee members review, approve, and distribute corporate grants.
- Post-Grant: We provide easy reporting and analytics to track the grant progress.
Schedule a demo today to see how easy it is for your company to set up and manage a corporate grant.
