Grants are an excellent way to fund priority projects and activities and best of all—they don’t need to be paid back. Of course, there’s no such thing as a free lunch and there are strings attached to any grant funding opportunity. Understanding those conditions and determining if you’re capable of satisfying them is one of the many things that that should be done before you apply for a grant.
So how do you know if your organization is ready to apply for a grant?
When do you need the funding?
If your business is in urgent need of funding, a grant is not going to be a good solution. Grant cycles vary but, often, government opportunities open only once or twice per year; if you’ve just missed a deadline, you’ll have to wait for another grant cycle before you apply.
Furthermore, the grant approval processes can vary from a few weeks to several months in the case of large federal opportunities. In some instances, grants will be paid out only after you submit a claim with invoices supporting your expenses. That means you will need to have sufficient cash flow to float your project while waiting to be reimbursed.
It’s also important to take into consideration the amount of time required to apply for a grant and the resources and documents you’ll need to have in place. Some grant applications are straightforward while others are more time and labour intensive.
Do you have a defined project in mind?
Grant programs are designed with specific objectives in mind. Oftentimes, these objectives are tied to government mandates and priorities, such as investing in green technologies, upskilling and reskilling workers, and exporting Canadian products and services.
As such, most grantors want to fund specific projects with measurable key performance indicators, outcomes and outputs. It is rare to find a grant opportunity that will support your business’s general operating expenses.
Before you apply for a grant, it is important to have a project plan in place. If you have already begun your project, you’ll need to find out if the grantor will provide funding for the expenses you’ve already incurred or if they will only provide funding for future expenses associated with the project.
If you have not yet started your project, you'll need to have a robust project plan in place to persuade the grantor of the viability and feasibility and be able to articulate why your project will contribute to achieving the program’s goals.
While project plans will vary, some general information you will want to have on hand include a description of the project, a budget, a headcount plan, a workplan and timeline, and measurable performance indicators as well as a description of how you will measure and track your impact over time.
Do you have time to write the application?
Some grant applications are straightforward, while others are more intensive and require extensive time to adequately address all of the questions and sections. Ensuring you have enough time before the grant deadline to fill out the application form and obtain any supporting documents is a crucial step that will help you increase your chances of success.
If you’ve written grants in the past, you can likely re-use some of the content you’ve prepared before, such as your business’s mission statement, business model, or clientele. However, if it’s your first time writing a grant, you might need to prepare these elements from scratch.
Additionally, some grantors require extensive supporting documentation, such as letters of support from any partners, audited financial statements, project plans, articles of incorporation and more. Budget in extra time to gather these documents and reach out to third parties if required.
It’s also important to note that the style of writing needed to write grants is quite different from other forms of writing. Grant writing tends to be direct, formal, and highly structured while also being customized to reflect the grantor’s program objectives and intent. If you find writing challenging, you may benefit from hiring a professional grant writer to help you prepare your application.
How will you finance your project?
While grants for registered charities and non-profits will often cover up to 100% of the total project costs, grants for incorporated businesses and individuals often want to see that the applicant has other sources of funding, such as grants from other entities or their own contribution. This is because grant-making entities, such as local governments, want to make sure that the businesses they support are equally invested in the project.
While preparing your budget, it is important to clearly identify how much you are expecting the grant to cover and where the rest of the funding will come from. Furthermore, as mentioned above, there may be a delay between when the grant is approved and when the funding will be disbursed. As such, being able to demonstrate you have sufficient cash flow to float your project will be important to show the grantors.
Can you effectively manage the grant requirements afterwards?
Depending on the grantor, you may be required to submit regular progress reports as well as financial reports and claims attesting to how the grant funding has been used and if the budget and project is on track. To effectively prepare for these reports, you will have to build in processes to capture and measure your progress towards the key performance indicators, outputs and outcomes you defined in your application. If you’re not already doing this, this can be another barrier to your ability to effectively manage your grant.
Furthermore, government grant making organizations often have a rigorous process to ensure their funding is used exclusively for the project described. If you work with an accountant or if you have an in-house finance team, it is vital to discuss these financial conditions in advance and create a process to track project expenditures separately from other organizational expenses.
Failing to adequately track your use of the grant funding and/or project progress can seriously impact your ability to secure grant funding in the future. Additionally, severe breaches of your grant agreement's terms may result in a partial claw back of funding.
If you want to find out if you are grant ready, contact Froese Law today to schedule a FREE 15-minute consultation.