The Truth About Grants – Ten Basic Points

As my first of many upcoming blog posts about grants, I’ll start by addressing some misconceptions. We will keep this one short and simple, as an early primer on how things work or don’t work.

 

  1. There is no “free money.” That is an outright lie. It is a scam that will only result in you paying for worthless books and services. If you do not believe me, check with your unicorn.
  1. Unless you are a 501(c)(3) non-profit organization, you will not qualify for 99% of the available grant funding out there. Some governmental grant opportunities are open to for-profit entities, but foundation and corporate grants, almost without exception, are restricted to non-profits.

Some grantmakers will help individuals (with extreme financial hardships related to medical expenses, for example) or provide scholarships to students. The amounts of these types of awards are generally very small and, if you are an individual hoping for grant funding, you are not likely to have your problems solved through this. As for money for college, I would check with your school’s financial aid office. Outside of what they are already aware of in terms of possible grant sources, you may be on a wild goose chase. Still, you can subscribe to The Foundation Center searchable online database for grants for individuals for a low monthly fee. (This IS a reputable source.) Do your own research on what might be available to you…and DON’T BE FOOLED by these advertising links online that say otherwise about how supposedly plentiful money is for going back to school.  (SEE: free money)

  1. Grants are competitive. There are no guarantees that your application will be approved. You have to be better than all other applicants if you hope for successful outcomes.
  1. No one will give you grant money to buy a house or start a business. You need loans for these things. Grants for businesses are almost non-existent and really restricted to certain fields, such as new technologies, etc. In other words, you won’t get a grant for opening a pizza place, hair salon, or cleaning business. If you are lucky enough to score a contract with the government for a service you provide, it is not going to be funding for start-up costs. And, if you are a brand new company, you probably won’t score very high in such an application in comparison to a well-established business that has proven to be fiscally solvent.

 

THE REST OF THIS POST IS SPECIFIC TO NON-PROFIT ORGANIZATIONS

  1. New non-profit organizations will struggle to get initial funding. While it is not impossible to win grants in your early years, you are largely untested and do not yet have a track record. Expect to hear a lot of “no” responses. Keep trying. You need to build on your successes. (You will continue to receive rejections even once you are established. There is limited available funding in comparison to the number of applications received each year by grantmakers.)
  1. No funder will be your sole funder. You need to diversify your funding streams. Also, grants should only be a part of your overall funding strategy.
  1. Funders will look at your other sources of support. If you have not done any fundraising yet through events and private donations… get cracking. Having nothing in the bank is probably going to also mean that a funder will not invest in you. Additionally, if you cannot afford a grant writer, it stands to great reason that you probably are also not in a financial position to interest most grantmakers. It does take money to win money.
  1. Grant writers get paid regardless of whether or not you receive funding. They are providing a valuable service to you and the standard billing practice involves a pre-paid retainer. Also, percentage deals are considered unethical and will result in application rejection by funding sources. Furthermore, a grant writer cannot “win” money for an organization that is not fund-worthy. They can increase your chances of success, but the responsibility for outcomes is 80% that of the applicant organization and their own merits. Proposals can only be as good as the agency itself.
  1. Grant applications are not rocket science, but they are not simple either. They are not a basic form, but, rather, a written presentation that makes your case for funding. Many people who want to go after grants think they can have an application prepared for $50-250.  This is unrealistic, especially if you haven’t yet prepared core materials as a template. Early preparation for the grants process usually takes at least 25 to 30 hours—to do it properly. For most non-profits, expect to double that time expectation. If you hope to go after a governmental grant, you should expect to pay at least $3,000-4,500 (and up) if you hire a grant writer. These are complex applications that also happen to be quite lengthy. If your application is connected to legal statutes and licensing regulations, expect the price to go up on this accordingly.
  1. The average rate for an experienced grant writer in the United States is $65 per hour. The more skilled the professional, the higher the rate. Some consultants charge $150 per hour and up. You get what you pay for. Think twice before you count on an intern or entry level person to handle an aspect so critical to your organization’s fiscal well-being. Same goes for the very common hope that a grant writer will volunteer their services. You are not likely to have much luck on that. And, grant writers mostly serve the non-profit industry. Since this is how they make their living, you shouldn’t ask for a reduction in price due to the fact that you are a non-profit. That just shows that you really do not yet understand how all this works and that non-profits, just like everyone else, have to pay for the services they need.

 

About Cos

Mary E. Costello (a.k.a. "Cos") is a Social Worker by education, trade, and spirit. A former human services administrator and advocate in the disabilities field, Mary started Creative Edge Consulting in February of 2005. As an independent non-profit consultant, Mary now helps organizations start, improve, expand, and sustain their critical services. In her "spare time," she feeds her addiction to politics and policy, advancing social justice, and trying to find the funny where she can. Life is short. Do something meaningful.

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