Book Getting Your Share of the Pie

Grant Basics

Grant funding unfolds in a logical order: a nonprofit’s leaders identify a need, design a project and seek a funder whose mission makes it a good match for the project. In the quest for funding, good grant writing is important, but it doesn’t make up for shortfalls in a poorly designed project. A project’s design is based on a clearly identified need – and so are a grantor’s parameters. Private-sector grant givers include individuals, businesses and foundations, all with widely varying missions and requirements.

Government Grants and Loans

In general, for-profit businesses are not eligible for grants, though in the US they can receive low-interest loans and other assistance from government agencies, primarily the Small Business Administration, which offers expertise as well as loans, and the US Department of Agriculture (USDA). Some government units don’t grant funding, but instead act as guarantors for commercial loans. For example, the Community Development Block Grant (CDBG) program partly funds economic development projects that repair infrastructure and generate jobs. This grant can make up only a small portion of such projects’ total funding. For some projects, low interest loans might be the only source of funds. For others, particularly large capital projects, funders might offer a mix of grants and loans. In some cases, grant applicants can count the “in kind” assistance they receive from supporters as part of a grant’s required local matching funds.

Putting Together a “Fundable” Project

Critical thinking is the basis of solid project designs and grant applications, because identifying a need and proposing a solution are at the heart of grant funding. However, grant writers must not make assumptions – such as figuring that a project that worked in one place will work in another.

“If a project is poorly conceived, will not fit the need or the need is fuzzy, a professional writing job can only accomplish so much.”

Some needs are relatively easy to identify: Perhaps your town’s sewage treatment plant needs to be rebuilt. Other problems are less straightforward: Perhaps your nonprofit wants to help reduce your community’s high school dropout rate. You must design a program that will address the known underlying issues: lack of parental emphasis on education, poverty and a dearth of positive activities for youth in a crime-ridden area. A successful project might include teaching the benefits of a complete education, building up the street presence of the local police or helping unemployed parents enroll in job training classes. Robust program design begins with identifying problems and addressing them.

“What counts with grant reviewers is a simple, direct statement of the facts. Please let your facts shine through and speak for themselves. They do not need to be embellished or exaggerated.”

Any grant proposal must prove that the requested funding will solve – or help solve – the problem presented. First, make sure that your solutions are cost-effective and sustainable, your project’s effectiveness is easily measurable and similar projects have worked well. Determine if your project is eligible for other funds and explain how you will maintain it after the initial grant period, whether by applying for other grants or raising other funds for next year’s budget.

The Search

Federal and state government grantors usually have specific methods for rating applications, often involving a formal, well-documented procedure. Governments offer fewer funding sources than the private sector, but government sources are easier to find since the law often requires them to publicize their programs. The US Department of Health and Human Services runs the grants.gov website, a good place to begin searching. The site, which covers 42 federal agencies that offer grants, makes it easy to search for newly posted grants or for potential grant funds available under the 2009 American Recovery and Reinvestment Act (ARRA). You can search by agency or topic, and sign up for email alerts. The other way to find federal grants is to use cfa.gov, home of The Catalog of Federal Domestic Assistance. To cast a wider net, use both websites. Grant Station (grantstation.com) also lists many governmental, private and religious resources for grant seekers. Many times banks and corporations create grants to fund projects in their areas, but the types of programs they support vary widely.

“There seems to be a general impression...that the federal and state governments are offering tons and tons of grant money...This is, in general, not true.”

Some national efforts, such as the CDBG program, make funds available for states to administer. Statelocalgov.net can help you locate useful state, municipal and county websites. The website for the Grantsmanship Center in Los Angeles shows multiple sources of government and foundation funding. The Foundation Center (foundationcenter.org) provides a comprehensive research tool for locating foundation grants. Many of these features are available to users for free, but the core service, the Foundation Directory Online, charges a fee. You can also tap into some of this data through regional and satellite locations.

“State and federal funding sources generally prefer a collaborative effort...generally such projects can exhibit a greater benefit and public purpose.”

Various sectors offer different kinds of funding. For example, ARRA allocates law enforcement funding from federal programs. The Department of Justice grants funds to state agencies, which distribute the money. If you seek law enforcement grants to cover new hires, overtime or equipment, start with state grants. A search on a state’s website for “law enforcement” will give you the name of the appropriate agency. Try to obtain a state grant first, because the competition is less fierce.

“Small Business Development Centers throughout the country...provide for cooperation between the private sector; the educational community; and federal, state and local governments.”

The USDA and the US Department of Commerce offer various economic development grants. They are generally focused on public works projects that can boost employment and attract new businesses to an area. The Commerce Department gives grants via the Economic Development Administration (EDA). Its funding application can be cumbersome; the hardest part is devising a Comprehensive Economic Development Strategy (CEDS) for your area. More information is available online at eda.gov. Businesses seeking grants should contact their local or state economic development organization.

Making Your Case

Statistical data is the most convincing proof for the claims in your grant application. Use census.gov to find various kinds of US Census data, from local area block-by-block statistics to national demographics. With some localities, information from the American Community Service (ACS) may be more up-to-date. If ACS statistics cover your area, use them to make your case. The Bureau of Labor Statistics (bls.gov) can provide unemployment figures, average price indices by sector, data on how Americans spend their time and information about consumer trends.

“Many localities have programs that assist local business...Most of the time, these programs are funded with monies from the federal or state government.”

States usually have planning departments that gather a lot of statistical data. In fact, you’ll generally find more help at the state level than at the federal level. State agencies may be able to share background information on previously successful, model projects; trade magazines also have good information about successful projects. Seek the data that is most germane to your application. If you are applying for law enforcement funds, then crime statistics, perhaps collected by the nonprofit you are trying to get funding for, will bolster your case.

“Documentation may include pictures, income surveys, studies, public hearing notices, annual reports, cost estimates, proof of matching funds and letters of support.”

Local governments also compile useful statistics about the number of different businesses, the amount of below-code housing, the level of tourism activity and the like. For some projects, you may have to conduct your own survey, for instance to assess an area’s sidewalks or to gather residents’ opinions. Complete, accurate documentation of the claims in your grant application is crucial to establishing credibility and winning funding.

Writing the Grant

Start by getting organized. Obviously, finish the applications with the soonest due dates first. Read the eligibility requirements carefully to screen out parameters that might disqualify your project. Such factors could include a location that doesn’t fit the funder’s geographic scope, a mission that doesn’t align with the grant’s purpose or the need for matching funds.

“Writing collaboratively is fraught with pitfalls and must be handled carefully in order to avoid hurt feelings, miscommunication and a poor product.”

In most cases, a basic letter of inquiry will be your first contact with a foundation. Unless the organization publishes specific guidelines, keep this letter to two pages and use it to introduce your project. Be sure you address it to the proper person. Keep your funding request in line with the foundation’s typical allocation. If making your project happen will require funds from other agencies, say so. Write with feeling and urgency about your proposed project and the way it dovetails with the funder’s priorities. Design a letter you can modify for future use with different funding sources. Many funders require such a preliminary letter.

“This process will probably take longer than you think...factors outside of your control come into play.”

If you apply for money from organizations that want full proposals, contact them first to determine your project’s eligibility. For grants without rolling due dates, call regularly so you don’t miss the notice soliciting applicants. Assess the cost in time and resources of applying for each grant in light of your chance for success and how well it fits your purpose. Be realistic when considering your resources, such as your staff’s ability to write grants and administer programs.

“Don’t be caught unaware. Keep following the process closely every step of the way.”

Focus on one section of the grant application at a time when you write. Grant givers want specific information, clear examples and project models that explain your work and your planned undertaking. Punctuation, grammar and spelling all matter. Mirror some of the language in the grant-giver’s solicitation. For instance, if the agency is dedicated to funding sustainable agriculture, pepper your application with that phrase.

“Women’s Business Centers provide assistance to the female entrepreneur. SBA also provides help to businesses interested in going international.”

With technical or complex grants, you may want help writing particular sections. If collaboration is necessary, first establish that the grant writer is in charge of integrating his or her information into the final product. If you must work with a committee, have the members review the work of one writer rather than attempting to combine written work from various people. Complete any preliminary registration steps early in your grant-seeking process to avoid snags. For examples, the online submissions interface and process at grants.gov is rather complex and using it requires first obtaining a Data Universal Numbering System ID (DUNS). Online grant applications will likely be the norm in the future. Generally, you will be able to download applications, work on them and upload them to return them to the funding agency.

Anatomy of a Grant Proposal

Most grant applications contain these components: a cover letter or sheet; a two-page summary of the application’s key points; a descriptive and statistical “statement of need”; a “project description,” which outlines precisely how you would use the requested funds; a section of “goals and objectives” specifying the exact steps you will take to implement your project and a statement about the project’s intended impact. Grantors will ask about your “administrative capacity,” that is, your ability to manage the project and the grant. Include a description of your organization’s other successful grant-funded programs. In the “budget” section, list the program’s costs and the exact way you would allocate the grant funds. In the “sustainability” section, suggest how you will be able to keep funding the project after the grant expires. You will usually need to supply an “evaluation plan” detailing how you will measure your project’s impact.

Administering Funds

Once you win a grant, the grant-giver will require some accounting of how you spent its funds. Foundations usually ask for periodic progress reports. Federal and state agencies will have more demanding requirements, such as the submission of planning documents. Some agencies have stringent labor requirements; others will audit your project. Study the “grant agreement” carefully so that you understand these requirements before undertaking your project. If you don’t fulfill your agreement, you may be asked to repay your grant. With some grants, funders understand that you may expend as much as 15% of the requested sum for administering the grant.

“Their goal is to improve local economic indicators, such as the unemployment rate and assessable base.”

If a government funder turns down your proposal, learn why by requesting a “debriefing.” Private foundations may be less helpful in this respect. Grantors reject projects for many reasons, from bad writing to poorly designed programs to competition from other projects that serve a greater or more desperate need. If you know more about why you were rejected, you’ll be better prepared when you re-apply or apply elsewhere.