Grants as a Funding Resources
Back in the old days of the technology boom, we didn't have to worry about finding “the money tree,” because we had money forests. The Web had hit town, and it was sexy. To avoid being left off the tech bandwagon, venture capitalists couldn't write checks fast enough — regardless of the true viability of many of the early technology ideas. But as investments were lost, those days came to a quick end. Today, business plans, feasibility, viability, and ROI are back in the picture — and funding is harder and harder to secure.
Let's say you have a great idea or product or service and have successfully hurdled the notions of feasibility and viability — now what? Oh yeah, money. Sure, there are the options of venture capital and debt financing — but what if your offering is for the greater good rather than a M&A target? Could you and should you then consider grant funding? Our response — “You're crazy if you don't.”
Contrary to popular belief, grants are not “free” money or money that you do not have to pay back. It is true that you do not pay back grant money, but it is important to remember that the granting agency has made an investment in your project and your organization. And you, in return, will be investing personnel and time in following up with your grantor through quarterly grant reports and other related documentation that must track the grant through its cycle. Granting agencies decide how to award funds in similar ways to an investment banker or venture capitalist seeking sound investments. This is not a situation of “take the money and run,” but one of investor and investee. They too are looking for success stories, but with return on investment measured not in dollars but in public benefit.
Though not subject to repayment, grants still require an enormous amount of planning, research, and follow-up. It is a misconception that you should go searching for grants, and then write your project to fit the grant. This approach will most likely result in a funding failure. It is important to first understand your need for obtaining the funding — this can be accomplished through business/project planning and research.
Once you've decided to take the plunge, how do you find the granting agencies? The Internet — including Web sites, listservs, and usenet groups — has been a great boon to both grant seekers and philanthropists. Grant seekers should be aware of the full range of information available in cyberspace — from foundation directories to corporate donors to government programs. Prospective grantor and information sleuthing on the Internet can reveal:
- company foundation intelligence;
- donor guidelines
- proposals previously funded by an organization or agency; government, corporate, and not-for-profit donors;
- fundraising advice
- accounting and grant management regulations, counseling, and advice;
- grant writing resources
And if you feel constrained by your researching skills, find help at your local or university library. We often forget that librarians are information experts — they will work to provide as much information to potential grant seekers as possible, thereby helping reduce the timely process of reading and evaluating donor requirements.
In your search, be conscious of what is happening in your local business environment. Has a new company or bank come to your town? If so, be on the lookout for the formation of a new corporate or community project funding resource. By monitoring the bank or company on your local newspaper's Web site, you will be the first to know about the new grantor's funding guidelines.
As you research granting agencies and their offerings, it is important that you become familiar with eligibility requirements and other criteria related to the organization and grant program from which assistance is sought. Remember that the basic requirements, application forms, information, deadlines, and procedures will vary for each granting agency. Since funding information changes, it would be in your best interest to contact the funding source before preparing any application or proposal.
Once you've selected your primary targets for grant proposals/applications, Norma Murphy of Fund Raising Management recommends you follow the “Always be Certain” checklist.
- Know the reason you are writing the grant: If the grant you write does not have substance or purpose, and if it does not complement the bigger picture your organization has for its future, it will be difficult to write a successful grant. This is your time to write your case for support. If it doesn't make sense to you, it probably will not make sense to the foundation — thereby, eliminating your chance for funding.
- Do your homework: If you do not care enough to find out about your prospective grantor's interests, then most likely your grant proposal will end up in the circular file. The 'shotgun' approach to grant writing is the worse offense of all.
- Read the entire grant application: The foundation from which you want to secure funding has taken time to write the grant application. They are selective in the information they want to receive from you and the order in which they receive it. Take time to read every sentence of the application, then write your grant request accordingly.
- Check your spelling.
- Send your proposal to a person: Regardless of the research you must do or phone call you have to make, get the name and title of the person to whom your proposal should be addressed.
- Adhere to their deadline: A “day late and a dollar short” sums it up if you miss a foundation's deadline.
- Keep the proposal people-centered: A software application is not what is of interest to a foundation. It may be the outcome you hope to achieve from your campaign, but ultimately it is only a tool that allows people to be better served. Write about the people who will benefit because this product or service exists.
- Have measurable outcomes: Foundations, like any other investors, want to see hard results.
- Demonstrate the sustainability of your project: How will you keep it going after the grant expires?
- Secure external validation for your grant request: Granting agencies are much more interested in what others outside of your organization think of you than what you think of yourself. Letters of support — addressed to the appropriate individual at the granting agency — written specifically in support of your grant request validate that others know and value your organization.
- Thank the granting agency for their support: It is surprisingly forgotten — sad but true.
Thinking outside the box in terms of funding can offer great benefits to those who are willing to consider and qualify for grant support. But it is important to remember that while granting agencies exist to help change society for the better, they are not ATM machines. Treat them with respect and always be good stewards of the funds they have entrusted with your organization.