Is there a difference in status between a 501(c)(3) church and a 501(c)(3) community organization? I heard that there are more grant monies available if an organization is a community organization rather than a church. It doesn't make sense to me.
There is a distinct difference that can make a big difference in the availability of grants, based in large part on the U.S. Constitution. A 501(c)(3) church is, by definition, a religious worship organization (See Ready Reference Page: “What Constitutes ‘Church’ Eligible for Exemption”), and government grants are generally not available to churches because of the First Amendment prohibition on “establishing” religion. Some private foundations also refuse to make grants to churches for their own policy reasons.
Faith-related community development or social service organizations that are not engaged in worship activities usually qualify for grants from government and the same private foundations, which means that there is a lot more grant money available to organizations that are not churches.