# Deliverable 3 — Funding-Readiness Diagnostic

**Purpose:** Score an organization before matching it to capital layers, so no application is encouraged that the organization cannot administer responsibly. The diagnostic gates the capital ladder in Deliverable 4.

**Scoring:** Each item is scored 0 (absent), 1 (partial or informal), 2 (complete and current). Domain scores are summed and converted to a percentage. Gate thresholds appear at the end.

## A. Legal and registration (max 20)

| # | Item | 0 | 1 | 2 | Evidence to collect |
|---|---|---|---|---|---|
| A1 | IRS 501(c)(3) determination letter, or executed fiscal-sponsorship agreement with a sponsor holding 501(c)(3) status | None | Application pending / sponsor in negotiation | Letter or signed agreement on file | Letter, agreement, sponsor's letter |
| A2 | State incorporation and good standing | Not incorporated | Incorporated, standing unknown | Certificate of good standing within 12 months | State DOS record |
| A3 | New York AG Charities Bureau registration (CHAR410) and current annual filing (CHAR500) | Not registered | Registered, filing late | Registered and current | AG portal confirmation |
| A4 | IRS Form 990 / 990-EZ / 990-N filed for every year required | Missing years | Filed late | Current, all years | IRS TEOS lookup |
| A5 | SAM.gov registration with active Unique Entity ID | None | Started, not active | Active, renewal date tracked | SAM.gov record |
| A6 | Grants.gov organization account linked to SAM | None | Account without roles | Account, roles assigned | Grants.gov |
| A7 | NYS SFS prequalification (for NYS grants) | None | In progress | Prequalified, expiration tracked | SFS status |
| A8 | NYC PASSPort account and vendor enrollment | None | Account created | Enrolled, disclosures complete | PASSPort |
| A9 | State charitable-solicitation registrations in every state where solicitation occurs | Unknown | NY only, others unknown | Mapped and current | Registration log |
| A10 | Employer identification, payroll and sales-tax exemptions in place | None | Partial | Complete | Documents |

**DAO-structured organizations:** A1 is the controlling item. A DAO without a recognized legal wrapper cannot receive foundation, government, or most corporate grants. Acceptable paths are a fiscal sponsor, a Wyoming DUNA or similar entity paired with a 501(c)(3), or incorporation. Score A1 at 0 until one of these is executed. See Deliverable 12 for the associated risk.

## B. Governance (max 16)

| # | Item | Standard for score 2 |
|---|---|---|
| B1 | Board roster with at least three independent, unrelated members | Roster with affiliations and terms |
| B2 | Bylaws adopted and consistent with NY Not-for-Profit Corporation Law | Signed bylaws |
| B3 | Conflict-of-interest policy with annual disclosures (NY Nonprofit Revitalization Act) | Policy plus signed disclosures |
| B4 | Whistleblower policy (required in NY above 20 employees or $1M revenue; recommended always) | Adopted policy |
| B5 | Board meeting minutes for the last four meetings | Minutes on file |
| B6 | Executive compensation set by independent directors and documented | Minutes or resolution |
| B7 | Board-approved annual budget and strategic priorities | Approved documents |
| B8 | Board giving or give-or-get commitment recorded | 100 percent board participation at any level |

## C. Financial management (max 20)

| # | Item | Standard for score 2 |
|---|---|---|
| C1 | Bookkeeping current within 30 days, accrual or cash method documented | Reconciled ledgers |
| C2 | Financial statements: balance sheet and income statement for the last two years | Statements available |
| C3 | Independent review or audit as required by revenue tier (verify thresholds in Deliverable 13 ledger) | Report on file or tier documented as exempt |
| C4 | Written financial controls: dual signature, expense approval, segregation of duties | Adopted policy |
| C5 | Twelve-month cash-flow forecast | Forecast maintained monthly |
| C6 | Operating reserve of at least three months of expenses, or a documented plan to build it | Reserve or plan |
| C7 | Indirect-cost approach chosen: de minimis rate or negotiated rate | Documented |
| C8 | Program budget with unit cost per participant or service | Budget model |
| C9 | Restricted-fund tracking by grant | Tracking in place |
| C10 | Revenue-concentration measure: share from the single largest source | Under 40 percent, or a diversification plan |

## D. Program and impact (max 16)

| # | Item | Standard for score 2 |
|---|---|---|
| D1 | Beneficiary definition: who, how many, where, with eligibility criteria | Written |
| D2 | Program logic model or theory of change | Written and board-reviewed |
| D3 | Baseline data on the problem for the served population | Cited sources |
| D4 | Output counts for the last 12 months | Data |
| D5 | At least one outcome measure with a collection method | Instrument and schedule |
| D6 | Participant feedback mechanism | Evidence of use |
| D7 | Delivery evidence: photos, testimonials, partner letters, media | Library |
| D8 | Program evaluation plan or learning agenda | Written |

## E. Fundraising and communications (max 16)

| # | Item | Standard for score 2 |
|---|---|---|
| E1 | Case for support: one-page, two-page, and full versions | Documents |
| E2 | Donor database with contact history and gift records | System in use |
| E3 | Recurring-giving option live | Enabled and tested |
| E4 | Gift acknowledgment within 48 hours and IRS-compliant receipts | Process documented |
| E5 | Website with mission, programs, leadership, financials, and donate path | Live |
| E6 | Grants calendar and tracker | Maintained |
| E7 | Standard attachments library: budgets, bios, 990s, board list, letters of support | Organized |
| E8 | Stewardship plan: reporting to donors at least twice yearly | Plan and evidence |

## F. Operations, data, and safeguarding (max 12)

| # | Item | Standard for score 2 |
|---|---|---|
| F1 | Written data-protection practice covering beneficiary and donor data (NY SHIELD Act reasonable safeguards) | Policy |
| F2 | Multifactor authentication on email, finance, and donor systems | Verified |
| F3 | Insurance: general liability and directors-and-officers | Certificates |
| F4 | Safeguarding policy where work involves children or vulnerable adults, with background checks | Policy and checks |
| F5 | Records retention and document management | Policy |
| F6 | Leadership capacity: named owners for finance, programs, fundraising, and compliance | Roles chart |

## Scoring and gates

| Domain | Max | Weight in composite |
|---|---|---|
| A. Legal and registration | 20 | 25 percent |
| B. Governance | 16 | 15 percent |
| C. Financial management | 20 | 25 percent |
| D. Program and impact | 16 | 15 percent |
| E. Fundraising and communications | 16 | 10 percent |
| F. Operations and safeguarding | 12 | 10 percent |

Composite readiness = weighted sum of domain percentages.

### Capital-layer gates

| Capital layer | Minimum gate |
|---|---|
| Stage 1 community and individual giving | A1 scored 2 (or fiscal sponsor); E3, E4 scored at least 1 |
| Stage 2 technology and in-kind | A1 scored 2; F2 scored 2 before adopting cloud credits |
| Stage 3 local foundations and corporate | Composite at least 55 percent; C2, D1, D4, E1 scored 2 |
| Stage 4 city and state grants and contracts | Composite at least 70 percent; A3, A7 or A8, C4, C5, C6 scored 2; C9 scored at least 1 |
| Stage 4 federal grants | Composite at least 75 percent; A5, A6 scored 2; C3, C7 scored 2 |
| Stage 5 national foundations and private capital | Composite at least 75 percent; D5 scored 2; at least two years of outcomes data |
| Stage 6 international | Composite at least 85 percent; audited financials; F4 scored 2; cross-border compliance checklist complete (Deliverable 5, international section) |

### Warning signs that require capacity work before any application

- Any A-domain item at 0 for the layer being pursued.
- Cash reserve under one month with a reimbursement-based contract under consideration.
- Single funding source above 60 percent of revenue with no diversification plan.
- No outcome measure after 12 months of operation.
- Leadership carrying finance, programs, and fundraising alone with no board or volunteer backup.
- Restricted grants being used for general operating costs.

### Output of the diagnostic

1. Domain scores and composite.
2. The highest capital layer whose gate is currently met.
3. A ranked capacity-building sequence: the fewest items whose completion unlocks the next layer.
4. Estimated time and cost to close each gap, with owner.