If our NFP becomes a company, can we still win grants?
In this help sheet series, Our Community’s resident agony uncle, Chris Borthwick, offers answers to frequently asked questions about issues not-for-profits are facing.
Dear Agony Uncle,
A local community-based not-for-profit I work with is thinking of changing over from a registered Pty Ltd to a company limited by guarantee. My question is whether a company limited by guarantee is allowed to apply for grants and other funding from trusts or government? I understand a company limited by guarantee can apply to be a charity, and therefore would have the ability to apply for funding, but I am unclear it could still access grants if it wasn’t a registered charity.
Agony Uncle’s response:
Well, anybody – whether a natural person or a corporate – can apply for any grant. The question is whether they'll get it.
The grantmaker will provide its own criteria. There is nothing in the general law that confines grants to charities, or even to not-for-profits.
That said, many grantmakers have provisions in their own constitutions that restrict their giving to not-for-profits, or to charities. You have to check the criteria for a particular grant.
However, you're certainly not going to be disadvantaged by changing from an ordinary company to a company limited by guarantee – although if the old Pty Ltd was in fact still a not-for-profit with an appropriate non-distribution clause, you may not gain much, either.
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