Funding - Grants & Competitions

January 19, 2023

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There are 5 posts in this series:

Overview
Bootstrapping
Grants & Competitions
Debt
Equity

Grants typically provide money that does not need to be repaid. The winners and runners-up in many competitions may receive grants. That sounds appealing. However, grants often:

Require a lot of time to prepare the application
May require you to meet specific conditions or accomplish a specific objective
Are competitive
Announce recipients once or twice per year - perhaps many months in the future
May require a detailed report on the impact of grant funding by some deadline
May award less than the amount you were seeking
May require you to raise a matching amount from other sources

Applying for a grant may or may not be worth the time it takes.

In general, it may be worthwhile to apply for a grant if one or more of the following apply to you:

When the grant amount will be transformative for you
When the grant amount will provide most or all of the funding you seek
When the Mission Statement of the granting organization and goals of the grant program are very well aligned with your intended use of the grant funds
When you have previous experience with, or personal connections to, the granting organization
When your organization has time available to research and put together a strong application
When your organization is willing to undertake all requirements attached to the grant
When you don’t need the funds soon

When might a grant not be worth the effort?

When the actual cost and/or opportunity cost of preparing the grant application are a large percentage of the grant amount
When the maximum grant amount is a small percentage of the funds you seek
When you are not willing to have the granting organization oversee use of the funds
When your intended use of the funds may not be obviously consistent with the grantor’s mission
When the terms of the grant are ones that you are only grudgingly willing to comply with

While most grants you read about are probably for nonprofit organizations, grants to for-profit organizations also exist. Granting organizations tend to focus on one or the other.

If a grantor is itself a non-profit, they are not likely to support for-profit efforts. However, there are exceptions to this - particularly if the award can be described as awarding a contract for services to the granting organization. Examples of this might be an arts foundation supporting multiple artists who are creating works that will be displayed in public areas, or supporting people who are part of a research study to determine if training in specific areas results in better outcomes.

If a grantor is (partially) funded by a government allocation, they will most likely award grants to proposals that help them achieve the goals outlined in the government allocation, regardless of whether the grantee is for-profit or nonprofit. In Maine, a number of grants at the State or local level seek to develop Maine’s “commercial ecosystem”. They seek to support employment of Maine residents, or attract people with specific skill sets to Maine, or develop technologies or products for which Maine’s natural resources will provide a competitive advantage.

The other articles in this series each describe a few of the other funding sources in more detail.

Additional resources you may find helpful include:

For Profit Grants

Nonprofit Grants

Grants for Both

Maine Grantwatch
CEI Women’s Business Center Small Business Resources “Grant Resource Guide” (in the Business Financing section)

Competitions

To ask questions and/or learn more about funding for your business, register for a “Funding Your Business” workshop in the SCORE workshop calendar or request to meet with a SCORE Mentor (a free service).

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