Reading the Funder's Mind: How to Decode a 990 and Predict What They'll Fund
The single most expensive mistake in grant writing is spending 40 hours on a proposal for a funder who was never going to fund you. Every foundation files a public tax return that tells you exactly what they fund, how much they give, and who they've funded before. Almost nobody reads it. This post changes that.
President, Grant Search US
President, Grant Search US
Reading the Funder's Mind: How to Decode a 990 and Predict What They'll Fund
September 15, 2026 — by the President of Grant Search US
I'm going to tell you about the single most expensive mistake in grant writing.
It's not a typo in the budget. It's not a missed deadline. It's not even a weak narrative.
It's spending 40 hours on a proposal for a funder who was never going to fund you — and you could have known in 15 minutes if you'd read their tax return.
Every foundation in the United States that has 501(c)(3) status files an annual IRS Form 990. It's public. It's free. And it contains more actionable intelligence about a funder than their website, their annual report, and their program officer combined.
Almost nobody reads it.
This post will change that. By the end, you'll know exactly which five numbers to look at, what they tell you, and how to predict — with surprising accuracy — whether a foundation will fund your proposal before you write a single word.
The 40-Hour Mistake
Here's how it happens.
You find a foundation. Their website says they fund "education, youth development, and community programs." Your nonprofit runs an after-school program. It's a fit. You spend two weeks writing a proposal. You submit it. You wait three months. You get rejected.
What went wrong? You didn't read the 990.
If you had, you would have seen that this foundation's median grant is $15,000 — and you asked for $75,000. You would have seen that 80% of their grants go to organizations in three specific zip codes — none of which are yours. You would have seen that they've funded the same 12 organizations for the last five years and almost never take on new applicants.
You spent 40 hours on a proposal that was never going to be funded. The 990 told you everything you needed to know in 15 minutes.
What Is a 990 and Where to Find It
Form 990 is the annual tax return that tax-exempt organizations file with the IRS. For foundations, it's the most detailed public record of their financial activity, giving patterns, and governance.
There are two versions you'll encounter:
Form 990-PF: Filed by private foundations. This is the gold mine. It lists every grant the foundation made during the fiscal year — recipient name, amount, and purpose. If you want to know what a foundation actually funds (not what their website says they fund), this is where you look.
Form 990: Filed by public charities and operating foundations. Less granular on grants but still contains financial data, executive compensation, and program descriptions.
Where to find them — free:
- ProPublica Nonprofit Explorer: Free, searchable, includes 990-PF filings for most foundations. This is the easiest starting point.
- IRS Tax Exempt Organization Search: Official IRS database. Good for verifying status and finding the most recent filing.
- Candid (Foundation Directory): The comprehensive paid database, but many libraries offer free access to Foundation Directory Online.
On Grant Search US, we've already done this work for you — our Funder Profiles database includes 990-derived data for thousands of foundations, including median grant size, giving focus, and geographic patterns. But knowing how to read a raw 990 is a skill every grant writer should have.
The Five Numbers That Tell You Everything
When you open a 990-PF, you'll see 50+ pages of schedules and financial statements. You don't need to read all of it. You need five numbers.
1. Total Giving (Part I, Line 25)
This is the total amount the foundation paid in grants during the fiscal year. It tells you the foundation's size and capacity.
What to look for: A foundation that gave $2 million total last year is a different prospect than one that gave $200,000. If you're asking for $100,000 from a foundation that gives $200,000 total, you're asking for half their annual giving. That's not impossible, but it's a stretch. If you're asking for $10,000 from a foundation that gives $2 million, you're in the small-grant category — and many large foundations have a separate small-grants process.
The rule of thumb: Your ask should be between 1% and 25% of the foundation's total annual giving. Below 1%, you're too small for their process. Above 25%, you're asking for too much of their portfolio.
2. Grants Paid (Part IX, Line 1)
Part IX of the 990-PF lists every grant made during the year — recipient, amount, and purpose. This is the most valuable page in the entire filing.
What to look for:
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How many grants did they make? A foundation that made 200 grants last year is accessible. A foundation that made 8 grants is selective — and probably has a pre-existing relationship with every recipient.
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Who did they fund? Read the recipient list. Do you recognize any organizations? Are they similar to yours in size, mission, or geography? If the foundation funded three organizations similar to yours, you have a real prospect. If every grant went to universities and you're a grassroots nonprofit, you're probably not a fit.
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What did they fund? The "purpose" column often reveals what the foundation actually cares about — not what their mission statement says, but what they actually write checks for.
3. Median Grant Size
Calculate this from Part IX. Sort the grants by amount. Find the middle.
Why this matters: The median grant size is the single best predictor of what the foundation will give you. If their median grant is $25,000, asking for $100,000 is a long shot. Asking for $20,000-$30,000 puts you in their sweet spot.
The mistake: Grant writers look at the largest grant a foundation made ("They gave $200,000 to the university!") and assume they can get $200,000. That grant was probably a multi-year commitment or a capital campaign pledge. The median is what they give to new applicants.
4. Top 5 Grantees
Look at the five largest grants in Part IX. These are the foundation's core relationships.
What to look for:
- Repeat funding: Have these organizations appeared in prior years' 990s? If the same five organizations get the largest grants every year, the foundation has a closed circle of grantees. Breaking in is very difficult.
- Grant type: Are the large grants for general operating support, specific programs, or capital campaigns? This tells you what kind of support the foundation prefers.
- Geography: Are the top grantees all in the same city or state? The foundation may have a geographic focus they don't advertise.
5. Giving Focus (Part IX, Purpose Column + Part I, Line 2)
The purpose column in Part IX often contains brief descriptions of what each grant was for. Aggregate these: if 60% of grants mention "education," 20% mention "arts," and 20% mention "environment," the foundation's actual giving focus is education — regardless of what their website says.
Part I, Line 2 asks for the foundation's "exempt purpose." This is their self-described mission. Compare it to what they actually fund. If their stated purpose is "to support underprivileged youth" but their grants go to elite private schools, the stated purpose is aspirational and the actual giving is different.
Reading Between the Lines
Beyond the five numbers, there are patterns that experienced prospect researchers look for:
New vs. Repeat Grantees
Compare the current year's Part IX to the prior year. How many grantees are new? A foundation that funds 50 organizations and has 10 new ones each year is accessible — 20% of their portfolio turns over annually. A foundation that funds 50 organizations and has 0 new ones is closed. Don't waste your time.
Geographic Concentration
Map the grantees' addresses. If 90% are in one state, the foundation has a geographic focus — even if they don't state it publicly. Some foundations are legally restricted to a specific geography (a donor-advised fund with a community focus); others just prefer it. Either way, if you're outside their geography, you're unlikely to be funded.
Grant Size Trends
Compare total giving across the last three years of 990s. Is it increasing, stable, or decreasing? A foundation whose giving is growing is a good prospect — they have more capacity and may be looking for new grantees. A foundation whose giving is shrinking may be in spend-down mode and conserving assets.
Board and Staff
Part VII lists officers, directors, and key employees. Part VIII lists compensated employees. Look at the names. Are any of them on your board? Are any of them connected to organizations in your network? A personal connection to a foundation board member is worth more than a perfectly written proposal.
The Funder Playbook: Automating What Takes Hours
Here's where I'll save you some time. Reading 990s is valuable, but it's slow. If you're researching 20 foundations, that's 10-15 hours of reading tax filings.
We built the Funder Playbook to do this automatically. For every foundation in our database, we've computed what we call a funder signature — a behavioral profile derived from their 990 filings, linked grants, and past recipients. It includes:
- Median grant size and grant size range (micro, small, mid, major, transformational)
- Top sectors they fund
- Giving trend (increasing, stable, decreasing)
- Top geographies they fund
- Recipient type mix (nonprofits, universities, government agencies, etc.)
- Applicant fit hints — specific signals about what kind of organization they tend to fund
You can see this on any Funder Profile page. It's the same data you'd extract from a 990 — just computed for you, across thousands of foundations, in seconds.
But even with the Playbook, I recommend reading at least the Part IX of the 990 for your top 3-5 prospects. The automated data tells you the patterns; the raw 990 tells you the story. You want both.
Building a Qualified Prospect List
Here's the process I use — and recommend:
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Start with your mission. What do you do? Who do you serve? Where?
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Search for foundations that fund your area. Use Funder Profiles or Candid. Cast a wide net — 30-50 foundations.
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Filter by median grant size. If you need $50,000, eliminate foundations whose median grant is under $10,000. If you need $10,000, eliminate foundations whose median grant is over $100,000 (you're too small for their process).
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Filter by geography. Eliminate foundations that don't fund your state or region.
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Read the 990 Part IX for your top 10. Look at who they actually funded. Are any organizations similar to yours? If yes, move them to the top. If no, drop them.
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Check for new grantees. Of your top 10, which ones funded new organizations in the last year? Those are your best prospects — they're actively taking on new applicants.
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Prioritize. You should now have 5-7 highly qualified prospects. These are the foundations where your proposal has a real chance. Focus your energy here.
The 15-Minute Investment
Here's my challenge to you: before you write your next proposal, spend 15 minutes reading the funder's 990. Look at the five numbers. Ask yourself:
- Is my ask within their typical grant range?
- Do they fund organizations like mine?
- Do they fund in my geography?
- Are they taking on new grantees?
If the answer to all four is yes, write the proposal. If any answer is no, save yourself 40 hours and find a better prospect.
The 990 is the closest thing grant writing has to a crystal ball. Use it.
Grant Search US automates 990 analysis across thousands of foundations with our Funder Profiles and Funder Playbook. Start free with 30 AI credits, no subscription required.