The Truth About Business Grants
This article is a reprint of Wise Bread's contribution to OPEN Forum from American Express -- where small business owners can get advice from experts and share tips with each other.
It seems that anyone with a pulse has seen the zealot in the money suit bellowing from the White House lawn: "free money...yours for the asking." Even as I write this, the images fill my head like a bad sinus infection. The fact that the instigator can afford television advertising tells you something about how many people are willing to pay to be disappointed.
So, what's the truth about business grants?
The good news: They're real and thanks to the new open government policies, they're not too hard to find.
The bad news: Lots of people are after them and the application process is almost as irritating as the guy in the money suit.
Here are the basics.
The majority of grants available to private businesses are funded by government entities; after all, they're the ones with access to the press that prints the money. Generally, for-profit businesses are not eligible for grants from charities, corporations, and foundations, but if your project pertains to the arts, education, science, or a similarly targeted cause, you may be the exception.
Even with government grants, there's no free lunch. They're not actually giving away money. They expect something of value for it such as research, job creation, work performed, etc. In fact, many grant programs require "matching funds" — money from your organization or other sources that leverage their own.
A quick search for opportunities open to small businesses (companies with less than 500 employees) on Grants.gov turned up 587 open offers. Within that universe, the Small Business Innovation Grant (SBIR) program has the deepest pockets. Here are a few examples of projects they were recently interested in funding:
- Probes for micro imaging the nervous systems
- Inertially stabilized camera
- Next generation helmet system
- Longitudinal surveys of the elderly
So, what's the chance of finding a grant to expand your retail store? On one hand, slim. On the other hand, if the business is located in a blighted area, you're a disabled veteran, and you offer free computer time for disadvantaged youths — you might just have a chance. Likewise, if your expansion involves hiring the disadvantaged, job training, job creation, energy conservation, pollution reduction, or a myriad of projects Uncle Sam has targeted as part of the massive American Recovery and Reinvestment Act (ARRA) program, you may just be eligible for your slice of the American pie.
If you don't mind lots of paperwork, frequent disappointment, and many strings attached, here's a quick guide to the slow process of finding grant money for your business:
1. If you qualify for any special small business designation — such as minority-owned business, disadvantaged business, woman-owned business, or veteran-owned business — start the certification process. In some cases, it will give you preference over non-certified businesses.
2. Complete the Central Contractor Registration (CCR) application at Grants.gov. Before you begin you'll need:
- a Tax ID (TIN) or Employer ID (EIN) from the IRS (this can take a couple of weeks);
- a DUNS number from Dun & Bradstreet; and
- the NAICS industry codes that describe what you do (you can look them Census.gov).
Once your CCR is approved (typically about a week), establish a login, complete your profile, and register for email or RSS alerts on grants that match your interests.
3. Read up on grant proposal writing. A number of government web sites offer guidelines, checklists, and even sample proposals; among them Grants.gov, CFDA.gov (Catalog of Federal Domestic Assistance), and Department of Defense.
4. Take advantage of the Freedom of Information Act to access successful grant proposals.
5. Look beyond the obvious. I received an email a couple of months ago that said: The State of Utah, UT is inviting you to participate in Bid #NO10008 - Public Education Campaign for Novel H1N1 Influenza . . .
From the downloadable packet, I learned that the State of Utah had received a federal grant to help educate the public about Swine Flu. They were requesting bids from companies that could create a media campaign to fulfill the grant obligation. So, while private companies were not eligible for the grant, they could still benefit.
With a bit of digging on grants.gov I learned the source of the federal funding was Opportunity #: CDC-RFA-TP09-902-H1N109 issued by the Center for Disease Control (CDC).
If I owned an advertising firm, I'd figure out who, in my State Department of Health, handles H1N1 issues by Googling: H1N1 and my the name of my State. I'd call or email telling them about my company's qualifications, and ask if they were accepting proposals. If they were, a careful read of their Request For Proposals (RFP) would help me craft my pitch.
6. Think "common good" — if you have a project that serves the needs of the nation (i.e. job training, back to work, employing the disadvantaged, reducing healthcare costs, curbing pollution, increasing safety, etc.) there's probably government money to fund it. Put your fingers to work Googling relevant phrases such as workforce training grants, disabilities grants, pollution grants, etc. Since many of the federally funded programs are administered locally, add your state or city to the search terms. Or visit your state and local government web sites and do a search on "grants." Be sure to sign up for their RSS feed while you're there.
7. If you find a grant that's closed to private businesses, find a non-profit that might want to collaborate on the project and share in the proceeds.
8. While Grants.gov does a good job of cataloging federal grant opportunities, also add yourself to the mailing list or RSS feed for any agencies that are particularly relevant to your business. Links to the primary federal grantors is available at FindingMoneyAdvice.com. For non-government grants, the FoundationCenter.org offers a subscription-based online tool that allows you to search for grants based by type, location, keywords, recipient, and a number of other parameters.
9. Be in it for the long haul. Most grant solicitations are issued at specific times of year. Often, the deadline for proposals is very tight. Plan ahead so you don't arrive at the party just as the dishes are being scraped.
10. Watch for scams. Where there is opportunity, there are opportunists. Don't pay for information that's available free and don't fall for one of the grant-mill pitches: "We'll send your proposal to thousands of sources of free money..." Likewise, while there are legitimate grant consultants, don't pay someone who's going to borrow your watch and tell you what time it is. Be sure whomever you hire has successfully obtained similar grants in the past.
11. Dot your i's cross t's. Applying for grant money is an exercise in precision. One misstep and you'll be out of the running.
If reading this leaves your temples throbbing, you already have a good feel for the business of grants. But if you have a unique solution to the world's problems or a special technical capability, take two aspirin and go for it.
Disclaimer: The links and mentions on this site may be affiliate links. But they do not affect the actual opinions and recommendations of the authors.
Wise Bread is a participant in the Amazon Services LLC Associates Program, an affiliate advertising program designed to provide a means for sites to earn advertising fees by advertising and linking to amazon.com.
