What we’re talking about
A grant is cash that’s provided by a public or private entity to cover certain elements of your business’ development – with next to no strings attached. In most cases, they’re as near to free money as it gets. Though usually given out to non-profits and charities, grants do exist for for-profit small businesses, too. Generally they’re given out by larger organizations in the hope that this will further that organizations’ overall aims.
Sums range from the pretty modest to hundreds of thousands of dollars – with average grants coming in the tens of thousands. Sounds pretty good, right? The rub is that they’re pretty hard to get and are often very competitive, so knowing where to look and what to look for is essential.
Why it’s important
Given the expectations on you before or after receiving any money, it’s critical you find the grants that actually make sense for your business. Even after you’ve finished searching for available grants, there’s a huge amount of work to do. Success rates vary: for the EU Horizon grant it’s about 15%, for the EU Eurostars scheme it’s around 30%, and for Arts Council funding in England it’s just shy of 75%. That means you have a chance, but grant writing (sending off a proposal) is difficult to get right. Each application will have multiple stages and varying requirements. Throwing your hat in the ring necessitates time and resources, so there’s no point in applying to places where you don’t really meet the criteria, or pale in comparison to the competition.
After receiving a grant, you will be expected to spend the money in a manner deemed appropriate. You’ll have to stay firmly on the grantmaker’s radar, consistently reporting on your progress and showing your face when they need you for meetings and events. Again, this is a time and energy commitment – so you want to respect the grantmaker.
Things to note
Identify your impact. Public and private bodies are significantly more likely to give you money if your business is doing good in the world. At the very least, if you’re trying to get grant money as a for-profit entity, you need to be shaking things up. Putting your finger on your business’ social impact edge will help you narrow down relevant grantmakers and succeed in the application process. It could be that you’re innovating in a field like sustainability, education or health – or that, as founder, your gender or race is underrepresented in your sector. For example, our own Fresh Fund supports young black founders in the US and UK, while the US Environmental Protection Agency funds entrepreneurs dealing with issues like sustainable materials, air quality and land revitalization.
It’ll probably take longer than you think. If you need to raise cash quickly, this may not be for you. Combing through the multiple lists, forums and options will take a lot of time, and once you’ve found some contenders, you may also need to wait for an annual or biannual call for applications to open up. It will feel like you’re putting in lots of work and getting very little back – it’s very much a game of patience.
You’ll need to be flexible. Grantmakers will look to fund particular projects with specific requirements. They’re not going to budge, so consider where you can make your business fit. At the early stages of your business journey, you may well make minor alterations to fit in with what grantmakers want. Grants are also often given to encourage businesses to do things they wouldn’t have considered or prioritized doing otherwise – whether that’s becoming carbon neutral, working with other organizations across borders, or creating jobs for young people.
You might need to chip in. Often, you’re expected to meet a percentage (around 10% to 50%) of the financial requirements yourself. This is a way of showing that your business is viable and signaling your commitment to spending the money properly. You’ll need to decide whether your business can afford to put any money on the table.
How to apply for the right grants
1. Confirm grant funding is right for you. If you’ve got limited time and resources, focusing your energies elsewhere may make more sense. If you do need an injection of cash, make sure you’ve fully analyzed the other options available to you and confirm that grants are the way to go.
2. Get specific on your business and its needs. Pinpoint the specific areas of your business you’d like to invest in – be that research and development, upgrading your technology or launching a new project or product. You’ll probably have to bend this a little to fit with the grant being offered. Be clear on the values you don’t want to depart from, and the basic facts about your business – such as employee numbers, turnover, founding year and areas of impact – so you can quickly write off grants that fundamentally won’t fit.
3. Understand roughly how much you need, and how much you can contribute. Huge grants might seem attractive, but you’ll be dismissed straight away if it’s clear you’re not operating on that scale. You will need to do detailed, application-specific cost estimations later on but, for now, a rough ballpark range is enough. Are you interested in grants that you’re required to match?
4. Set up your research system. Create a simple spreadsheet where you can record and categorize grants as you happen upon them. You’ll want columns for links and deadlines – and can keep using the same spreadsheet to plot your progress as you start applying.
5. Start with what you know. Begin with the people and organizations you already know and admire. Share that you’re considering grant funding on your personal profiles online; ask staff for any recommendations; speak to other business owners for any tips or connections if they have them. You might also head to the websites of similar businesses with similar goals to see if they have any grant funding listed publicly. You’re initially looking for potential rather than perfect options. Scour Twitter, Facebook groups like this one, relevant industry publications, newsletters (eg, GrantDrop) and LinkedIn pages.
6. See what the government has to offer. Obviously, this will differ from country to country. To use the US as an example, small business grants are available on a federal and state level. National government agencies tend to fund non-profits, but do offer small business grants for research and development in fields like science and technology. You can also search for opportunities at state (or city) level via databases on grants.gov, sba.gov and eda.gov.
7. See what the private sector has to offer. Big companies – such as eBay, FedEx and Facebook – often have grant programs in place for small businesses. It’s also worth getting industry specific and investigating slightly smaller organizations whose aims are aligned with your own.
8. Look for foundations with funding. With 239,000 grantmakers listed, the US Foundation Center’s foundation directory is a hugely comprehensive database, although you will need to wade through a lot of non-profit-only grants. Although corporations and the government will offer these, too, foundations are a key source of demographic-based grants (ones for people in specific segments of the population).
9. Get critical. You should have a list of potential grants to apply for – it’s time to whittle them down. Go through the qualifying criteria and application process for each in detail ensuring you’re a good fit and it’s worth your time and effort. Is your business 100% eligible? Do the grant deadlines work with your roadmap? Have they funded businesses like yours in the past? Ideally, you might try to reach out and meet one-on-one with a representative of the organization, to show your face and learn more.
• Grants are not just for non-profits – there are a range of initiatives offered by governments, organizations and foundations for for-profit small businesses.
• Grants take a while to find, apply to and then receive. Identifying suitable grants involves lots of research and lots of patience.
• They’re also super competitive – you’ll be discounted straight away if you don’t meet their basic criteria and you may well have to adapt your future plans to fit a grant’s demands.
Perspective. This opinion piece from The Design Trust, Busting the myth of funding, explains that grant funding is hard to find, rather than just a ‘pot of money that you can tap into’.
Example. Looking through testimonials is a good way to work out what a grantmaker is looking for. Check out these blog posts by successful applicants to US-based Nav’s Small Business Grant: Junk Star Handcrafted Furniture, Three Tree Coffee and Running Dogs Brewery.