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Tuesday, March 22, 2011

Grant writing tips: Business grants from the government

To receive a government grant for a business, the application must match the grant requirements as close to perfectly as possible. Knowing the purpose of the grant and demonstrating the business has the capacity to carry out the use of grant funds is also very important to acquiring a grant, otherwise the application is probably a waste of time and energy. 

Grant awards
Grants help finance startup businesses & non-profit entities
For profit businesses usually have less grant financing opportunities at the government level than not-for-profit businesses. Nevertheless, business grants can be worth the effort when seeking an alternative to interest bearing loans and personal capital in business financing. This article will discuss some of the key elements of acquiring government grants, namely the business type, application process, writing of the grant and grant writing tips.

Types of businesses most likely to receive grants

Government grant money is set aside to accomplish specific development goals. Whether such goals be charitable, economic or developmental in nature, many businesses will automatically be classified as less likely or ineligible to receive grant money due to the type of business it is. For this reason, if a business is operating for profit, receiving grants will most likely be more challenging if not impossible due to grant fund allocation requirements.

The technical terms for businesses that grant funds are often allocated for is based on tax exempt status outlined by the U.S. Department of the Treasury and Internal Revenue Code. Common tax exempt organizations are classified 501(c)(3) and include religious, social, public and not for profit organizations such as schools, social service programs, and associations.

Some grants are not competitive meaning many if not all businesses that qualify for the grant will receive some type of funding. These types of grants are termed 'formula grants' (Waddy. P.53). Competitive grants on the other hand will either gain or lose credibility based on the quality of the application which may or may not receive funding. A type of federal competitive grants is called a 'project grant'.

The application process

The grant application process takes time, and Government grants tend to involve a significant amount of searching and paper work. That is to say the application process can be split into to two main functions  Finding the right grant to apply for and  writing the grant. Finding the right grant to apply for is just as important as writing a strong application. The grant search process can take some time sifting through and analyzing the nexus of grants, expiration dates, and requirements and can be found through government databases a few of which are listed below.

Federal, state and local government grant databases

There are many databases and sub-databases of grants that are interlinked with one another. Taking the time to acclimate and review the different databases is useful in the grant search phase of the grant application process. A few of the online databases listing grants are provided below. If an organization is specific to a particular area of the economy or public service, one may also wish to search through Government departments dealing specifically with those areas of service.

• Catalog of Federal Domestic Assistance: http://www.cfda.gov
• Grants.gov: http:www.grants.gov
• The Grantsmanship Center: http://www.tgci.com/

Grant application items

Before the grant application is written several business items are likely to be needed as grant reviewers want to know a lot about a business and prefer to leave no stone unturned. Finding all the necessary information will likely involve speaking to various department managers and explaining why the information is needed. This in and of itself can take several hours and may require the use of privacy contract if the grant writer is working independently outside the business. A few of the items that may be needed in the application are the following:

• Business objective: Mission statement and purpose of incorporation
• Financial Statements: Balance sheets, Income statements, Cash flow statements etc.
• Tax information: Tax exempt status, income tax returns, Employer ID number(s)
• Historical performance: Past achievements of the business both operationally and financially
• Project descriptions and goals: Illustration of projects past, present and future and implementation.
• Forecasted earnings and expenditures: Projected expenses and earnings.
• Operational outlines: Detailed summaries of day to day business operations.
• Staff information: Number of employees, turnover information, staff biographies

'Writing' the grant

The actual writing of the grant is probably the most fun part because it can be thought of as a creative yet professional venture. An outstanding grant application may be a work of art that pays attention to every detail, is highly organized, extremely well presented, meets application requirements including graphs, pictures, forecasts etc, and is utterly convincing in every respect.

A strong grant is visibly appealing, professionally presented, contextually accurate, complete and thorough in addition to meeting the application requirements. The application requirements vary depending on the level of Government and type of grant, but can get very specific in terms of dollars and cents, project details, implementation etc. The whole grant writing process may take approximately 20-80 hours to complete.

Grants may be awarded based on a point system meaning each section of the application will be worth a specific amount of points and the more the application meets the grant requirements, the more points the application will earn. The applications with the most points at the end of the first screening will be reviewed further in the case of competitive grants.

Since the grant application process can take a lot of time and can be very important to a businesses success, skimping, cutting corners and not paying attention to the application requirements can mean a loss of business resources and time and thus it makes sense to spend time perfecting, reviewing and editing the grant application until it is presentable to the reviewers.

Grant writing tips

There are many government grants available but only a few ways to help ensure winning of those grants. For this reason it may be advisable to study the grant writing process before beginning starting the process of searching and writing the grant. The following tips may be worth considering in the quest for acquiring grant financing.

Be very clear and concise: Grant reviewers don't have all day and want facts not anecdotal information

Have a functional business: A business that is not proven to be functional via an operating track record will not be as competitive as a business that does.

Network: Keeping in touch with grant officials and other grant applicants to stay informed and inform.

Choose the business not the grant:  It is the type of business that will win the grant and not the other way around.

Allocate sufficient time: A rush drop that hasn't undergone final revision may contain mistakes and errors that can lose points in the review process.

Presentation:  How the grant is presented puts a face on the organization. In the case of first time grant applications, the presentation is especially important.

Research: Finding the right grant is an essential first step to acquiring grant funding. Ideally the grant will already be won before the application is even submitted.

To summarize, Government grants are not easy to acquire and are quite involved especially at the Federal level. The whole grant writing process takes substantial time and involves understanding the grant process, searching for the correct grant, finding a grant writer ,gathering grant application materials and writing the grant.

Specific types of businesses are by default tax exempt status more likely to qualify for grant application because of that status and thus eligibility for many grants depends on the type of entity applying for the grant. Although established businesses have a stronger positioning in competitive grant applications, properly completing all the steps in the grant application process from start to finish increases the probability of a business receiving grants.


1. Ellen Karsh and Sue Fox. 'The Only Grant Writing Book You'll Ever Need' New York. 2003 Carroll & Graf Publishers.

2. Thompson, Waddy. 'The Complete Idiots Guide to Grant Writing' New York , 2003. Alpha.

Image license: Anna Lena Schiller,  CC BY-SA 3.0