It’s always interesting to talk about grants with someone who doesn’t have a background in grant writing, grantmaking, or institutional funding research. When the American Recovery and Reinvestment Act of 2009 was signed, “grant” somehow became a buzzword… and along with it came several myths that have burrowed their way into popular belief.
Myth #1: There’s a ton of free money out there for commercial businesses. I got an email all about it.
FALSE! First of all, unless you have registered to be on an email subscription list with grant websites like Foundation Center, Grants.gov, or GrantStation, that email you received is a big fat scam. As a development consultant, I receive dozens of junk emails with titles like ”How to Get Obama Money” or “Get a Grant!” Disregard these kinds of emails. Just click delete. Don’t even open them.
Secondly, most grants are awarded to these types of recipients:
- Nonprofit organizations with IRS 501(c)3 status
- Municipal authorities and other public agencies
- Research and educational institutions
- Native American tribal governments
- A very small amount to individual artists
The federal government does not provide grants for starting or expanding a business. Some Recovery Act funding has been made available to small businesses, but the project that the business is proposing must fit within the specific scope of the funding initiative and small businesses must be listed as eligible. To be honest with you, I have never seen a grant opportunity where a commercial business was eligible to apply. I have seen plenty of loan opportunities, but sorry, no free money.
Another note about Recovery Act funding: Since Recovery Act funding is aimed at making the greatest impact on the American population, the majority of funding is focused on larger cities. Rural area projects have a much greater chance of being funded by looking to agencies like the USDA.
Myth #2: Grants are a quick fix. I don’t need to establish a development/fundraising plan beyond locating and applying for grant funding.
FALSE! Just as a farmer should diversify his/her crops, a development professional must diversify his/her organization’s funding base. Grants are not a quick fix, as very few cover operational expenses and most require matching funds. A fundraising campaign should ideally include a combination of earned revenues (i.e., ticket sales, rent, advertising, program fees), memberships, proceeds from fundraising events, individual contributions, major donor contributions, endowments, bequests, corporate sponsorships, private foundation grants, and government grants. Not only does this look attractive on grant applications, but it ensures sustainability; if you lose a funding source, your organization remains viable.
Myth #3: A single grantmaker will sustain my project indefinitely.
FALSE! See answer above. Grants are intended to aid a project toward sustainability, not to sustain it indefinitely. When applying for a grant, you must have a plan for sustainability beyond what that grant will cover.
I hope this information helps you to dispell myths you may have heard about grants. Contact me at leia@leiaeubanksconsulting.com if you are interested in further consultation.
Best wishes!
Leia