There is free money out there for your business, but the trick is knowing how to get it. Here's 8 grant-seeking techniques for obtaining public or private funding.
There is free money out there for your business, but the trick is learning how to ask for it. If you are looking for money for an existing or new enterprise, you're likely to encounter difficulties finding grant funding, but it's not impossible. Grants are generally given to non-profit organizations for programs and services that benefit the community or specific group of the general public. Most funding institutions don't provide grants to individuals who will use the proceeds to start or develop a for-profit business.
As with any rule, there are exceptions. But usually when an individual does secure a grant that assists his or her enterprise, it is typically for a very specific objective—such as developing products that improve the quality of healthcare—and not general operating purposes, says John G. Porter, Ph.D., a certified grant writer (CGW) and executive director of the American Grant Writers Association. Various government agencies offer grants for business activities that fit their specific missions.
Last year, Durham, North Carolina-based start-up PlotWatt, which created a service to help home homeowners save on their electric bills, received a $40,000 development grant from the North Carolina Green Business Fund, under the American Recovery and Reinvestment Act. Using existing electric home monitors and an internet connection, PlotWatt analyzes data to show how much electricity is consumed and wasted. This lets homeowners know exactly how much each household appliance is costing them—from running the air conditioner to using the clothes dryer.
PlotWatt's grant application bested hundreds of businesses applying for the North Carolina Green Business Fund, which awards individual grants totaling up to $500,000 for the select purposes of saving energy, generating renewable energy or promoting energy efficiency. For Luke Fisback, founder and CEO of PlotWatt, the first step in writing a winning grant proposal he says was to "thoroughly read and reread the grant application, which was posted on the internet."
Fishback believes that most grants very explicitly state how to meet their requirements. "You have all these check boxes to go through when applying for grants. It is important that you follow the rules and you don't leave any box unchecked," he says.
A crucial second step: Fishback contacted the administrator of the grant to find out if there were any additional training sessions. "I attended one of their information sessions to learn about the do's and don'ts of this particular grant."
No matter if you are seeking government or private funding, a well-written grant proposal clearly states your objectives, sets forth a plan, and provides a realistic budget.
The following are eight more tips on how to write a winning grant proposal.
1. Don't Chase the Money
You have to qualify, qualify, qualify. "Make sure your mission and purpose fits closely with the funding entity's mission and purpose," says Porter. Don't apply for a grant because your business sort of, kind of fits it. Don't tailor what your business does to get the funding. In hindsight, Fishback learned that very important lesson: "Only apply for grants that look like they're specifically written for you, your business," he says, about having applied for many other grants and being turned down because he didn't fit their mission.
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2. Prepare to Do Extensive Legwork
Identifying state agencies, private foundations, and other organizations that give grants to individuals or small businesses requires considerable time, effort and research. For starters, look in your own backyard to find grant-makers that have previously funded projects or services for businesses like yours. Many state economic development agencies provide small business grants and other types of financial assistance. The Small Business Administration offers information about government agencies. Another resource is Business.gov, which is the U.S. government's official site for small businesses. Also, visit the web sites Foundations.org and The Foundation Center, which list directories of foundations.
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3. Determine Your Approach
Once you identify potential funders, determine how you intend to approach them. Make a personal contact and cultivate relationships by e-mail, telephone call, office visit and/or letter of inquiry, advises Beverly A. Browning, Ph.D., author of Grant Writing for Dummies (Wiley, 2009) and director of the grant writing training foundation in Buckeye, Arizona. Browning says during this stage you want to determine 1) their interest in your project or company, and 2) what they would like to see first as the initial document of entry (i.e., letter of inquiry or concept paper). Many funding organizations now prefer that requests be submitted first in letter format before accepting a full proposal, according to The Foundation Center, a national resource service for grant-makers and grant-seekers.
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