Government organizations aim to improve the community, and the grant-making agency may be advised by members of the community. The process may be somewhat political, in that elected officials can promote projects in their area of interest, or in their geographic area they serve.

Private grant-making organizations work in a slightly different manner. Foundations often have a very clear purpose; the foundation's guidelines will show exactly what it expects of the grant seeker. In many cases, a foundation's grants will go to organizations in a specific geographic area, or to groups whose proposals serve the subject area covered by the foundation's mission. The foundation grant-making process is usually not influenced so much by personality. In contrast, the priorities of a corporation are less clear, and they may tend to be influenced more by the personal relationship between the corporate officials distributing the grant and the officials of the grant-seeking organization.

Types of Foundations

There are four main kinds of foundations. "Independent foundations," also referred to as "private foundations," are established by families or individuals with inherited money or money acquired through a business. Large independent foundations often give to a broad range of projects; small independent foundations often serve a limited geographic area. Special-purpose independent foundations often focus their efforts on a relatively small set of priorities, such as dealing with a specific disease or providing help in the area of arts or sports. "Community foundations" serve a specific geographic area. These foundations are often funded by donations from a wide range of the community. "Operating foundations" are private groups that provide a direct service or do research. These groups usually do not fund grant proposals. "Company-sponsored foundations," also called "corporate foundations" are established by corporate entities, but are run separately from the corporation. These often give to a wide range of grant seekers, but they may limit their activity to areas in which the corporation has an interest. For example, a foundation started by a baby food company might fund projects relating to children's health.

Corporate Giving

Some corporations provide funds to non-profits directly from the company, rather than through a foundation. The giving programs may be directed from the corporation’s human resources office or through its marketing department. Although corporations sometimes provide outright gifts to grant seekers, they are more likely to provide matching gifts or offer the use of facilities, technical assistance, or equipment to nonprofit groups. Additionally, corporate groups may offer "cause-related marketing" strategies, in which a portion of the profit for each product sold goes to benefit a nonprofit organization.