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Grant programs

19 min read

Model A Focus

Only Model A projects may operate grant programs within Raft. If a Model C project is interested in disbursing grants, they should contact us and will likely need to set up a Model A project in parallel with their existing one.

Introduction

On this page, find everything you need to know about distributing grants as part of your Raft project. Through this guidance the structures we have put in place, we try to make grantmaking as simple and easy as possible for all parties - the Raft team, the project leaders, (if different) the selection committee, and most impotantly, the grantees.

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Grant programs must be approved before accepting applications for funding.

Feel free to contact us at any point, even in the early stages. As an admin team, we see every new grant program as a collaboration between our team and yours.

What Raft cannot do

Before we get into all the amazing things we can go through grant programs, let’s start with what we cannot:

Grants to project members or other “interested persons” ⛔

In most cases, projects should not consider giving a grant to any “interested person.” An interested person is defined as follows:

  • Any officer, director, trustee, key employee, project lead or project committee member, or grant selection committee member of ours, or any relatives of these individuals, or entities of which these individuals or their relatives own 35% or more
  • Anyone who has given or will give donations totaling $5,000 or more in the calendar year of the grant, or any relatives of one of these individuals, or entities of which these individuals or their relatives own 35% or more1
Unexpected hardship exception ⚠

In the case that a project or selection committee member is a member of the charitable class (explained below) and experiences unexpected hardship in such a way that they would otherwise2 be eligible for grant funding, they may submit a request for funding so long as:

  1. They are not the sole decisionmaker (i.e., Project Lead) for the grant program
  2. They clearly meet the preexisting objective criteria
  3. They have never requested funding from the program before
  4. The total percentage of funding given to “interested persons” in the “grant round” - or surrounding six-month period - does not exceed 5% of total distributed funds
  5. The grant amount is no greater than the average-mean or average-median grant amount
  6. They disclose their conflict of interest and intention to apply for funding to Raft and all project members and selection committee members via email
  7. They recuse themself from that round of decisionmaking and all discussion related to their application
  8. They recuse themself from all discussion and decisionmaking related to potential future applications by other “interested persons”

Raising funds for a specific grantee ⛔

A key element of grant programs is that funds are raised for the benefit of the public, rather than any individual or group of individuals.

As such, you may not raise funds for the purpose of supporting a specific individual or entity, or discrete group of individuals or entities. When you raise the funds, they must be for a broad class of potential recipients. See our discussion of eligibility below for more information.

Projects may encourage specific people or groups to apply for funding. BUT when you raise the funds for that program, you must not mention any specific potential grantee(s) as if to say they are earmarked to receive funds.

Warning

If you do want to raise funds for a specific individual or group, it will need to be outside of Raft,3 with no official involvement from your Raft project.

Grants to influence political elections or legislation ⛔

While we may in the future take advantage of our ability to, to a limited degree, influence US legislation, grant programs may not fund activities intending to influence political elections or legislation, at any level of government, in the US or elsewhere.

Grants that should actually be contractor agreements ⛔

Another thing that sometimes comes up is the difference between a grant and a contractor agreement. There are a few key differences:

  1. Grantees own the results of their work, whereas contractors do not.

In most cases, when a grant is given to someone, they can di what they want with the results of the work. When you engage a contractor, however, they are doing work for you, and generally you own the resulting work product.

  1. The grant agreement is relatively broad, while contractor scopes of work may be quite narrow

When a grant is given to a grantee, they generally have quite a lot of leeway about how they accomplish the aims outlined in the grant agreement. Whereas with a contractor agreement, the Scope of Work can be quite specific, with limited flexibility.

  1. Grant funds are often paid up front, while contract payment terms are often more milestone-based

The payment terms for grants and contractor agreements vary significantly, but in general, grants pay up front, or across multiple installments, while contractor agreements tend to pay after the work is completed, on a monthly or milestone-based cadence.

Still not sure whether something should be a grant or a contractor agreement? Reach out.

What Raft can do

Raft can operate grant programs that give funds through one of the three grant types below, to

Allowed grantees

Broadly speaking, grants may be made to individuals and business entities (including coops, nonprofits, small businesses) of any kind as long as the grant meets all other requirements (the devil is in the details).

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For hardship and award grants, we are currently set up (operationally) only for individuals. If your program gives awards or hardship grants to organizations/businesses, we will adjust to accommodate that.

Grants to 501(c)(3) public charities

Grants to 501(c)(3) public charities may be even easier than for other grantees, provided the grants are unrestricted, meaning that the funds can be used by the organization in whatever way they like (not just for a specific program). This is sometimes referred to as “general operating” funding.

If that is the case, no grant program is required. Email us and we will be happy to put together a simple agreement and facilitate payment to the charity.

If that is not the case - that is, if you want to restrict the use of the funds to a specific program or purpose - proceed as you would with any other kind of organization.

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A public charity is what most people think of when they say “nonprofit.” We have to be specific because there is also such a thing as a 501(c)(3) private foundation.

We do not recommend running a fundraiser or crowdfunding campaign within Raft solely for the purpose of another charity. Just have people donate to the charity directly, and avoid our administrative cost allocation. Only in rare cases does this logistically make sense.

Grant types

Raft is currently set up for three grant types:

  • Standard: grants to initiatives or organizations engaging in work that will further the purposes of the Raft project
  • Award: grants to individuals based on their past accomplishments
  • Hardship: grants to individuals experiencing hardship

Every grant program must be of only one type, and choosing it is an early part of the design process described below. If you want to give out grants across multiple types, then you must submit multiple grant programs for approval.

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We have not yet developed guidance for fellowship or scholarship programs, educational public art commissions, or “stipends” or “honoraria.” If any of these are something you are interested in, please contact us and we can bump them up our priority list.

Designing your grant program

Here’s everything you need to do to form a grant program, in a somewhat-chronological order (ymmv4). When you are ready, submit the program for review and approval by the Raft team using this form, which runs in parallel to this guidance.

Form a selection committee

This may be the same as your Project Committee, or may differ in some way. We require that the selection committee have a minimum of three members, and up to nine.

Direct participatory grant programs

Raft is highly supportive of “direct” participatory grant programs - i.e., those that have the community democratically decide who receives funds - and in fact operates one such project itself.

If you are carrying out such a program, you will have the opportunity to say so in the form and describe your anticipated process.

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If your participatory process still has a selection committee as its last phase, you should follow the normal selection-committee process - even if there are cool (“indirect”) participatory elements preceding it.

Choose a name

In many cases, the grant program will differ from the project name. Here are a few examples of existing grant programs with Raft:

  • AT Protocol Community Fund runs a standard grant program called “IndieSky”
  • Black Ideas Collaborative runs an award program called “Diaspora Bridge Fund”
  • Coffee Workers Coalition runs a hardship program called “Support for Coffee Workers”

Create a “Project” in Open Collective

Create a Project (i.e., sub-project or sub-”Collective”) in Open Collective for the grant program by doing the following:

  1. Go to your project’s OC dashboard (navigate to your main project using the dashboard selector if needed)
  2. Go to “Accounts”
  3. In the upper right, select “Add Account” and then “New project”
  4. Make the grant program name the name you choose for the “Project” and choose a url for it
  5. Click “Create project” !

Feel free to note down the URL of the project’s profile somewhere - we will ask you for it in the grant program submission form.

Define the program’s purpose

Essentially, this is a one-to-two-sentence statement about what the grant program will seek to accomplish.

All grant programs must be charitable in nature5 align with Raft’s mission, and fit within the fiscally sponsored project’s purposes as defined in its Fiscal Sponsorship Agreement with Raft.6

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In the case of standard grants, the grant is charitable because of what the grantee is required to do with it, whereas with award and hardship grants, the charitable activity is the grant itself.

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Additionally, for award grants, even if the intention is to support grantees moving forward, the definition must be looking backward to what they have already accomplished. The charitable activity is rewarding them for the good they have done.

In case it helps, here are some examples:

  • The decentralized impact grant program provides funding to projects that are making a positive impact in communities through applies decentralized technologies [Standard]
  • The small-museum docent award honors long-term volunteer docents at small museums in the US who have supported their community through their above-and-beyond service to local museums [Award]
  • The NYC art handler hardship program aims to aid art handlers experiencing financial hardship due to poor working conditions, retaliation against organizing efforts, or other causes [Hardship]

Choose a grant type

Review the grant types above, and choose the most appropriate one. If you are not sure which type is the best fit, or if you are trying to do something different, contact us and we will be happy to talk it through.

Determine eligibility criteria

When selecting who to fund and who not to fund, a set of clear, objective7 eligibility criteria is key, such that any outside person - or independent auditor - would agree that the persons reciving grants through Raft meet predefined criteria.

It is also essential that all members of the project, and their prospective grantees, have a mutual understanding of what is expected to be true of grant recipients. This makes the process smoother for everyone involved.

We think it is helpful to think of criteria in two patterns: “hard” and “soft.”

Hard criteria are cut-and-dry, binary yes-no requirements.8 Criteria such as “is a cooperative” or “studies the Black diaspora” or “lives in Minnesota” would be examples of hard criteria. You may have several of these, depending on how restrictive you wish the grant program to be, but usually 1-3 is enough, in combination with the soft criteria.

Soft criteria are the items that are slightly more subjective. These are the areas where the selection committee has the most agency, for example “supports the long term health of the Ridgewood community, “will develop key innovations in open source cryptography,” or “improves the lives of incarcerated people.” You may have several of these, depending on how restrictive you wish the grant program to be, but usually 1-3 is enough, in combination with the hard criteria.

The criteria will vary from program to program, but - again - should be robust enough to demonstrate objectivity on your part to an outside observer. For the different grant types, the criteria will likely revolve around:

  • Standard: what they will do
  • Award: what they (already) have done
  • Hardship: what they are currently experiencing

We say a bit more about this below, and in the case of Hardship grants, on its own page.

Standard eligibility criteria

For standard grant programs, you have a lot of freedom for what hard and soft eligibility criteria you choose. As long as they are charitable in nature and fit within your project’s mission, we are unlikely to have any major concerns.

For the “hard” requirements of the grantee project, what must be true of any prospective grantee? For example:

  • Based in North Dakota
  • Devised in collaboration with an indigenous community
  • Grantee must be a 501(c)(3) public charity
  • Project must be less than one year old

The soft criteria often answer the question: what must the project accomplish? Here are some examples:

  • Projects must create open source tooling that furthers decentralization of ATProtocol
  • Projects must support artistic production and fight community degradation in rural Illinois communities
  • Projects must further our understanding of the interplay of sound and silence in cities

Award eligibility criteria

The “hard” criteria mirror the standard examples we provide above.

The “soft” criteria, however, are different - they should be looking back to a potential grantee’s past - after all, this is (at least technically) an award for past work. Thus, they tend to read something like:

  • “is a leader in research on Y topic”
  • “has distinguished themself throughoutstanding achievement in X field”
  • “served this community for 50 years”
  • “accomplished Z impactful thing that is depended on by communities throughout the US”

(We hope you get the idea.)

Hardship eligibility criteria

Our approach to eligibility for hardship grants is more complex, and thus it has its own page: Hardship grant eligibility

Decide on an application or nomination process

Will you ask for applicants, or ask that your community submit/nominate potential grantees? How will applicant or nominee information make its way to you? What sorts of questions do you want/need to ask them in order to decide who to fund? We will provide a form submission software, but the rest of these decisions are largely up to you.

Choose a decision-making process

How will the review and selection process work? Will all members have to be unanimous, or will you use some sort of decision-making method such as consent, consensus, or majority vote? Again, this is up to you - we encourage creative approaches, although we will default back to majority vote if things get hairy.

Consider your approach to grant amounts

Relatedly, how will you determine how much money to give to each grantee? Here are some options:

  • Set a single grant amount (e.g., $1,500), which combined with your budget will determine the number of grantees you can support (this works fairly well for standard and award programs)
  • Choose a single grant amount (e.g., $1,500) or set of available grant tiers (e.g., $500 and $1,000) and plan to give out grants on a rolling basis (this works well for hardship and some award programs)
  • Set a maximum grant amount (e.g., $2,000) and give out the amount of funds requested, on a rolling basis (works for many hardship programs - by need - and some standard ones - by budget)
  • Set a maximum grant amount (e.g., $5,000), collect a set of applicants, and then split up the grant pool across projects, someties giving less than what was requested (works only for standard programs)

Submitting a grant program for approval

To start a grant program with Raft:

  1. Have an idea in mind, for the above aspects of a grant program, with general agreement from the rest of the project committee (if applicable)
  2. Review the above and below documentation to see whether/how it might fit within our structure9 and begin your “design”
  3. If it doesn’t fit, or if you have questions about any aspect of how it would work, email us and we will be happy to talk it through
  4. If it does, prepare all the required information and submit the new grant program for approval using the new grant program submission form

You may not proceed with your grant program until Raft emails you confirming that it is approved.

Operating the program

Once Raft approves the grant program (which, again, you will be notified of via email) we will proceed in implementing it with you. The general pattern is as follows


Grant requests in OC

Raft will edit the Open Collective Project you submitted so that it can accept grant requests, a special form of expense in Open Collective that we use for all grants.

Application form

If you will accept applications or external nominations, Raft will create a free “workspace” in Tally, an excellent forms software, for your project and invite your team to it.10 In that workspace, you will be able to create an application form that collects whatever information is needed from prospective grantees.

For Standard grants and Award grants, grantee information will need to be submitted through our request forms (see “processing a grant” below) to initiate the grant process, so please make sure the application/nomination form collects all required information.

For Hardship grants, an application form is required, since the form will also legally function as the grant agreement with the grantee, including a signature and attestation by the potential grantee that they are experiencing hardship. Thus, Raft will work closely with you on your application form to ensure it meets the legal requirements.

Choosing grantees

Once there is a list of potential grantees to review, the selection committee you created will then need to select grantees using the approach approved by Raft. We recommend that you take notes of all meetings where these decisions are made, recording who was present and, where applicable, how everyone voted. (Whenever the decision is not unanimous, we require that you email us to let us know.)

Processing a grant

Once a grantee is selected, you will need to communicate to this to Raft. The process, and what follows, varies by grant type.

Standard grant processing

  1. Project submits standard grantee information form
  2. Raft reviews information and, provided everything looks good, initiates signing of the grant agreement
  3. Once grant agreement is signed, the grantee is instructed by project on how to submit grant request in Open Collective
  4. Project approves expense
  5. Raft pays expense

Award grant processing

  1. Project submits award grantee information form
  2. Raft reviews information and, provided everything looks good, creates an award letter for the grantee
  3. In consultation with the project, either the project or Raft sends the award letter to the grantee
  4. Grantee follows directions in letter to submit grant request
  5. Project approves expense
  6. Raft pays expense

Hardship grant processing

Raft will work closely with the project to make the process as smooth as possile for grantees.

  1. Project sends grant award email (using template co-created with Raft) to grantee AND sends grant request expense invitation in Open Collective
  2. Grantee add missing information to grant in Open Collective
  3. Project approves expense
  4. Raft pays expense

Reporting by grantees

For standard grants, narrative and financial reporting is required.

Standard grantee reporting

Standard grantees are required to provide written reports to Raft that contain:

  1. Description of progress
  2. Financial report on use of funds
  3. Copies of any publication resulting from the grant
  4. Confirmation that they have complied with the grant terms

Our standard grant agreement does not have an end date by which funds must be used, but requires a report for any annual accounting period of the grantee during which they receive, hold, or spend any of the funds.

On a grant-by-grant basis, in the standard grantee information form, you may also request that the grant period end on a specific date - that is, you may require that funds be used within a certain time period.

You may also split the grant into two chunks, with a midterm report. It is up to you on what approach is most appropriate for your situation.

Award grantee reporting

No report is required, as the grant itself is the charitable activity, rewarding the grantee for past behavior.

Hardship grantee reporting

No report is required, as the grant itself is the charitable activity, intended to relieve or partially relieve the grantee’s hardship.

Changes to the program

If there are ever any changes to the grant program - especially changes to eligibility criteria, selection committee, or selection process, you must let us know in advance of making the change. No changes may be made withour Raft approval.

Footnotes

  1. This is also known as a “substantial contributor.” ↩

  2. That is, were they not a project member. ↩

  3. Our understanding is that individuals can give up to $14,000 annually to others without the donee needing to pay taxes. But we are not lawyers; please check if the law and/or limit has been updated. ↩

  4. Sometimes you might need to create the selection committee first, while in other cases you choose them after defining the program. Also, the particular phases involved in a grant program vary by grant type, as detailed throughout this document. ↩

  5. By the definition of the IRS ↩

  6. If you would like to expand or update your project purposes, contact us. ↩

  7. It should not look like the selection committee gives grants just ‘on a whim.’ ↩

  8. For risk management reasons, we do not allow a person’s race or ethnicity to be one of the elibility requirements. ↩

  9. At this early point in the process, if the project is governed by a committee, it should also work towards unanimous agreement about how the program should proceed. If agreement is not unanimous and you decide to proceed anyway per your internal governance, please email us to let us know the points of disagreement. ↩

  10. All grant programs must use Raft’s form software to collect grantee applications - email team@raft.foundation to get started. ↩

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