23 Jul 2014

Tricky business: There ain’t no such thing as free money.

By Glen

Grant funding is great! Free money! You don’t have to give away equity and you don’t accrue debt. Lovely people want to give you money to do all kinds of good things.

Maybe. Kind of. Not exactly.

Grant funding makes a lot of sense sometimes, but there are a few things to keep in mind. Here are our five top tips:

 

Remember, It’s not free money.

People, even grant funders, want something for their money. A traditional investor wants something tangible – usually more money. Grant funders, on the other hand, don’t necessarily want their money back but it’s important to remember what it is that they’re getting out of the deal: they want impact for their money. They want to know that it’s going out and changing things for the better. Proving that impact is going to cost you.

Grant applications cost you time, focus, and energy to put together – several of our teams estimated it was around 80 hours work to prepare a grant application which leads right into point 2:

 

Pick your funder carefully

With venture capital, there’s an old adage that you should choose your investor with a little bit more care than you choose your spouse, and for good reason: it’s easier, usually, to separate from a loved one than to get rid of a difficult investor.

Grant funders are different: their support usually only lasts for the lifecycle of the project that’s funded, but it’s still important to choose the right one. Make sure you ask yourself what kind of support or networks do they can bring alongside the money.

Finally, don’t try to make your grant fit just because there’s money on offer: If you’re teaching young people about (say) exercise and diet, don’t apply to education funders thinking “well, they’ve got some money”. You’re wasting everyone’s time; time which is better spent finding the right funder, and building the right relationships with them.

 

Talk to them. Give them a call*

*maybe an email, first

Found your perfect funder? Brilliant. Read their funding requirements? You fit? Excellent. Downloaded the application and started filling it in?

Slow down, there, cowboy.

Seriously, give them a call. Find them at a networking event. Make a point to talk to them about what you’re doing. They might note that someone’s doing something similar, or give you some pointers to resources you didn’t know about. They’ll probably give you some tips as to when or whether this is the right funding call for your project.

Talking to them will help you understand what it is that they’re looking for and how you fit in with them. Then you can craft your application to fit their needs.

If there’s not something that’s appropriate to your project, they’ll be able to tell you that too, and when a more appropriate funding call is coming.

 

Be realistic

There are more people who want “free money” than there is money to give them. OK, keep this in mind, but it’s not just this.

Imagine the following situation:

There’s a £50,000 grant going, and you really need £75,000 to do your project. You decide that if you pay yourself half your wages and get people to tighten all their belts you can squeeze it in at £49,957, so you put that in your budget.

You’re not going to get that grant. People who read grant applications for a living have a really good idea of what it takes to make things happen. They don’t want you to kill yourself. They know they’re more likely to lose all their money if they give it to you on these terms.

Plan for things to go wrong. Plan for contingencies. Give yourself some room for learnings. Explain what you’re doing, clearly and reasonably, and give them every confidence that you can go forth and deliver the change you say you can.

 

Make your grant officer’s life a delight

There’s a new set of jargon in town called impact measurement. When someone gives money to a foundation that gives out grants, they want to know not just how much money they gave away, but what happened because of it.

You might not know how you’re going to measure the outcomes of what you do, but you should have an idea of what outcomes you expect. If you think that X action is going to lead to Y outcome, write it down, and talk about how you’re going to monitor whether those outcomes are happening.

This shows the people reading your grants that you’ve really thought through the chain of events in what you’re proposing to do – they call this your Theory of Change. Even if it doesn’t come out the way you planned, it shows that you have a realistic idea of how to measure your impact, and that you’re thinking about how to make their lives easier from the get-go.

 

Good Luck!