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Understanding Grant Funding

Updated on October 3, 2013
Grant Funding - Know the Truth
Grant Funding - Know the Truth


As a professional grant writer, I am surprised and appalled at the number of false and misleading websites that offer information and imply guaranteed grant funding. Hopefully, the information contained below will help you sort through the maze of online information pertaining to grant funding.

MYTHS/SCAMS REGARDING GRANT FUNDING:

Go back to school for free

Individuals cannot apply for grants to go back to school. These are provided through a variety of areas including the FAFSA (Free Application for Federal Student Assistance), www.fafsa.ed.gov. Grants are also awarded through individual schools.

Start your own business

Grants are not provided to start your own business, whether woman owned, minority owned or otherwise. This is an excerpt from www.SBA.gov - “The federal government does NOT provide grants for starting and expanding a business.” For more detail visit: http://www.sba.gov/category/navigation-structure/starting-managing-business/starting-business/loans-grants-funding/grants . That said, the SBA does provide loans to help with this type of venture. Contact your local SBA for details.

Provide you a house

Grants are provided to 501 (c) 3 organizations to help with low income housing. Some financial institutions will also help with low interest loans for qualified buyers and so-on. Individual grants are not provided for this purpose.

Guaranteed Grant Funding

One of the biggest scams is sending money to get money. Sadly, there are even books that tell you that this money is just sitting around waiting for you to take it...WRONG!. There are websites floating around that promise that they can get you a “guaranteed” grant. Basically, you send in money and they guarantee that you will receive a grant amount larger than what you invest. RUN as far away as you can from ANY group promising or guaranteeing a grant. Grants are awarded by the grantor and thus cannot be guaranteed.

SO WHAT IS GRANT FUNDING?

Grant funding is one of those terms heard regularly, yet many people are unaware of what grant funding supports and more importantly, what it does NOT!

Grant funding, typically is simply an award (usually monetary, but not always) provided by the government, a corporation or a private foundation to help support, improve upon, develop or sustain a community based project or program.

Government grants can be sought by a number of entities, both for profit and non-profit, depending on the project/program and the specific grant guidelines. These guidelines identify which organizations are eligible for funding and the requirements for submitting an application. Do not be misled; the official website for government grant funding is www.grants.gov.

Corporate and Foundation Grant Funding is primarily awarded to help support projects and programs to benefit local communities or help a nonprofit fulfill their mission. This type of grant funding generally is awarded to non-profit organizations, substantiated by the attachment of the organizations 501 c 3 IRS determination letter. (Other attachments may be required as well, again read guidelines carefully.)

Side Note: A 501 (c) 3 Designation Letter serves as documentation of non-profit status; however, although churches are not required to obtain 501 (c) 3 Designation for IRS tax exempt status, a grantor may still require the designation. In this instance, if grant guidelines state that the designation letter is required, contact the grantor before proceeding with the application.

Grant amounts from corporate and foundation grantors typically range from $500 to $10,000 or more, while government grant funding can be substantial.

Large non-profit organizations regularly search and apply for corporate and foundation opportunities. Unfortunately, many smaller non-profits, churches and faith based organizations fail to take advantage of these valuable funding resources.

Below are a few reasons why many organizations do not apply for grant funding:

Concerns about limitations and restrictions placed upon what can be said.

Private and foundation grantors rarely place limitations of this type. That said, always read guidelines carefully before applying.

Fear of the unknown

Sometimes lack of understanding fosters inaction. Grant funding is a legitimate funding resource designed to help organizations fulfill their mission to meet a variety of needs; although there are no guarantees of a grant award; failing to apply will ensure that your organization does not receive one.

Lack of time

Grant writing can be VERY time consuming, yet taking the time to make grant writing a funding resource priority can help offset costs that can ultimately affect success and survival of your program and/or project.

Understaffed

As stated with the aforementioned time deficit, utilize volunteers to develop a fundraising committee within your organization. As with any committee, designate a chair person in order to avoid duplication. Assign each volunteer a different responsibility. ALL fundraising ideas, grant applications and so forth can be scheduled and executed through this committee.

Grant funding (corporate and foundation) provide support for a variety of Areas of Interest. (Check grant guidelines for specific areas funded). Some areas include:

· Health

· Education

· Youth

· Community

· Capital

· Religious

· Art

Grant funding (corporate and foundation) typically does NOT fund:

· Religious organizations for religious purposes unless otherwise noted

· Political parties or campaigns

· Endowment creation or debt reduction

· Annual appeals/membership contributions

· Travel requests for groups/individuals (i.e. bands and sports teams)

· Scholarships

Grant funding is a great way to help support your organization’s projects and programs; however, caution and knowledge must be exercised during the process.

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