Photo: A proud winner of the Anzisha grants sponsored by the African Leadership Academy.
Raising money is one of the toughest obstacles for people who need to support their idea, business, or project.
That’s why it’s such an exciting feeling when you win ‘free money’.
If getting a bank loan is not an option for you, or you’re not ready to accept outside investors in your business, then you need to seriously consider grant funding.
A grant is essentially ‘free money’ that’s given to you to support your idea, business or project.
In summary, it is money that doesn’t have to be paid back.
Also, grants can come in several different forms, such as prize money from winning a competition, or a donation from a philanthropic organisation, or an endowment from a wealthy family’s foundation, among other flavours.
After years of working with students and clients who have successfully raised over $5 million in grants and other types of funding, this article contains 10 important pieces of advice to guide you along the process.
If you stick to what you’re about to learn, you could significantly boost your chances of attracting grants that will help you start, grow, or expand your business or project.
1) Target the right sources
There are over 100,000 different organisations across the world that provide grants, donations, prize money, and other forms of ‘free money’.
There are just so many options. And if you don’t know the right ones to target, you’re practically going to get very confused.
Some of these organisations are owned and sponsored by national or local governments, like America’s USAID, Sweden’s SIDA, the United Nations Foundation, and the United Kingdom’s DFID, among several others.
Government-sponsored grants are some of the biggest in the world. For example, every year, USAID alone spends up to $50 billion in grants and related opportunities.
In the last 12 months alone, the top 50 corporate foundations have given away more than $3 billion in grants, donations, and other types of free money.
These days, we are seeing more and more grants coming from organisations that are sponsored by successful entrepreneurs, philanthropists, and wealthy individuals and families.
Currently, the Bill & Melinda Gates Foundation is the largest family-owned grant-making organisation in the world and has given away more than $60 billion in grants since its inception.
And that’s not all.
There are also thousands of grants that are sponsored by local and international non-governmental organisations (NGOs) like the World Wildlife Fund, the African Women’s Development Fund (AWDF), the Climate Emergency Fund, and several others.
2) Connect to their core motivations
Guess what? None of these organisations will give you money just because you asked for it.
Most grant-making organisations have a founding philosophy and usually have one or several core motivations for giving away grants and prize money.
In summary, they will give you a grant or donation ONLY IF you’re working on those things they care very deeply about.
The Global Innovation Fund (GIF), for example, only cares about 3 things: innovation, social impact, and poor people in developing countries. Therefore, if your business or project doesn’t have these 3 elements, you’ll be wasting your time asking the GIF for a grant.
The MacArthur Foundation, which gives out more than $200 million annually in grants, is focused on the following core motivations: climate solutions, criminal justice, nuclear challenges, and fighting corruption.
As a result, even if you have a breakthrough technology or an innovative business model that could eradicate world hunger, you’re very unlikely to get a grant from the MacArthur Foundation.
Some grant organisations are motivated by specific problems like hunger, poverty, illiteracy, disease, homelessness, etc. Some are focused on specific industries like agriculture, healthcare, education, technology, trade, etc.
Therefore, only focus on those grant-making organisations whose philosophy, core motivations, and focus areas are relevant to your business or project.
3) Be ready to compete
You’re not the only person who loves free money.
There are thousands of other passionate people like you out there who really, desperately also want to get their hands on the same grants you’re applying for.
Take the annual Africa Business Heroes $1.5 million grant that’s sponsored by the Jack Ma Foundation and the Alibaba Foundation.
Last year alone, over 12,000 people from dozens of countries applied for the grant, but only 50 people were selected.
From these numbers, there’s about a 0.41% chance that you will be selected for the grant.
While most people would love to get a grant to support a business or project, what they often don’t realise is just how insanely competitive the process for attracting a grant really is.
In fact, major international grant opportunities, like the $1 million Hult Prize, attract more than 250,000 applications from over 100 countries.
The odds of winning such a hotly-contested grant is even significantly less than 0.1%.
So, what can you do? Does this mean you shouldn’t even bother to try?
No, not at all. But you have to be ready to compete.
This means you need to develop skills in packaging and presenting your business or project in a way that gets attention and makes you stand out from thousands of other competitors who are in the race for the grant.
That’s exactly what our program does for entrepreneurs, innovators, and project developers who are trying to raise money to start, grow or expand their ventures.
In our program, you will learn how to develop and pitch a winning proposal, and how to avoid the expensive mistakes and critical risks that deny people the chance of winning a grant.
Using our strategy, our students have raised more than $5 million in a combination of grants, prize money, equity deals, and debt.
4) Make sure you fit the profile before you apply
Every grant comes with a specific and defined set of “eligibility and selection criteria”.
Unfortunately, many people don’t even bother to read these criteria. They just forge ahead with excitement and apply for the grant.
But guess what?
The very first thing most grant-making organisations look at before they start selecting candidates for a grant is if the applicant meets the eligibility and selection criteria for the grant.
Applications that don’t meet the criteria are ignored, deleted, or politely dumped in the trash.
This means that all the effort, energy, and sleepless nights you invested in developing your proposal and applying for the grant were a complete waste of time.
Take the $1 million Hult Prize grant I talked about earlier. It’s targeted at entrepreneurs who have bright and innovative ideas, or startup businesses.
But guess what? You have to be a university student to compete for the Hult Prize. This is a key part of the eligibility criteria.
The Cartier Women’s Initiative awards a $100,000 grant to 7 women around the world every year.
And if you’re a woman, it’s tempting to just dive right into the application process for this grant.
But if you read the eligibility criteria, you would realise that the grant is only for women-led businesses that are no older than 3 years, and are built around an original idea.
In summary, before you apply for any grant, just make sure you meet the criteria first. That way, you’re not wasting your time on the wrong opportunities.
5) Learn how to read, interpret and respond to grant RFPs
Every grant opportunity often starts with a ‘Call for Applications’ or a document known as an ‘RFP’, which is short for “Request for Proposals”.
The RFP is the document that details the grant-making process, the terms and conditions, expectations, and ‘ground rules’ of the grant provider.
In most cases, an RFP can be as short as a few pages or as long as this 178-page RFP from USAID for a $35 million project.
To put it simply, an RFP can be a boring document.
But if you plan to win a grant, you need to know how to read, assess, and digest an RFP so you understand the rules and guidelines that should guide your application.
In my experience, RFPs can be quite daunting for entrepreneurs who just want to raise some extra money to support their business. As a result, many people don’t pay enough attention to the details.
As part of our program, you will learn how to interpret and respond to the questions and requirements in the RFP in a way that helps you stand out from other competitors and applicants for the grant.
6) Proof and documentation matter a lot
As you apply for grants, make sure you can back up any information and claims with proof and supporting documents.
They’re likely going to ask for it.
For example, if you claim that your business has earned revenues of $150,000 in the last 2 years, do you have any audited financial accounts, invoices, POs, or bank statements to prove it?
If you claim your social impact project has impacted 5,000 people in rural communities, can you back this up with any reasonable heuristics, documentation, media statements, witness accounts, testimonials, etc.?
Many organisations that provide grants, donations, and other forms of free money are process-driven and documentation-based organisations.
You don’t want to make hyper-optimistic claims only to be caught out during the due diligence phase of the candidate selection process.
7) Is it really a ‘grant’?
Technically, a grant is free money that shouldn’t be paid back. Period.
But some organisations claim to give ‘grants’ that are actually grant scams, or a disguise for something else.
And unless you read between the lines, you may be walking yourself into a trap.
Take ‘refundable’ grants for example.
A refundable grant is money that has to be paid back. In reality, a refundable grant is actually a “zero-interest loan”; it’s a loan that has to be paid back without interest.
Another example is a ‘contingent’ grant.
This type of grant is free money as long as your business or project meets certain milestones, such as revenue growth, customer numbers, profit targets, etc.
And if the milestone or target is not met, then you may have to pay back the money with interest.
‘Services in lieu’ are also another kind of grant disguise.
With this type of grant, you don’t get any money or cash. Instead, you will be given access to services like free training, free consulting, free software subscriptions, and other free stuff.
This kind of ‘grant’ may not be that bad if you prefer these services in place of cash.
8) Explore the non-financial benefits of grants
Most people focus too much on grants and free money that they often miss out on several non-financial but very valuable opportunities.
There’s so much more you can get from applying for a grant, even if you don’t win.
There are usually opportunities for training, coaching, networking, media exposure, brand affiliation, strategic relationships, and many more.
In fact, some of our students and alumni from our program, like Anne and Will of Smart Havens Africa, have used this strategy to great effect.
Anne won a £10,000 grant and emerged a top finalist for the Africa Prize for Engineering Innovation, an annual grant competition that’s organised by the Royal Academy of Engineering in the UK.
In addition to media exposure, Anne and Will successfully attracted very experienced experts they met at grant award events to serve as advisory board members in Smart Havens Africa.
In summary: if you keep your eyes and ears open, a grant opportunity can benefit your business or project in ways that money alone cannot.
9) The money may never be enough
There are only a handful of grants that can amount to significant funding for your business or project.
Most grants lie within the $5,000 to $25,000 range.
Some grants are above $100,000.
And only a few are above the $1 million mark.
In fact, the higher the grant amount, the more fiercely competitive the process is likely to be.
As a result, grants alone may not be a sustainable or long-term source of funding for some businesses or projects.
Worse still, the amount of time, effort, and energy that goes into applying for grants and developing proposals may not always be worth it.
That’s why you need to cast a wider net and expand your options beyond grants and free money.
Every year, people around the world raise billions of $$$ by exploring other funding and financing options such as equity, debt, and hybrid options.
And in our program, we will teach you how to identify, target and successfully access other funding sources in a way that helps you achieve your goals of starting, growing or expanding your business or project.
10) If you don’t win, try, try, try again
In 2016, Magic Bus Ticketing, a Kenyan startup that simplifies public bus transport services, won the $1 million seed funding grant from the Hult Prize.
The prize, which was presented by former U.S President Bill Clinton, was a crowning achievement for the 4 co-founders of the Magic Bus team who had previously failed at previous competitions and grant opportunities.
Rather than give up, the team learned from the feedback and criticisms they received and improved their business model.
And then they tried again and again.
Finally, their persistence paid off.
Remember, winning a grant can be a very competitive process. Therefore, the more times you try and learn from your attempts, the higher your chances of winning in the long run.
As I always tell my students, when it comes to raising money, it’s not a “win or lose” situation. It’s actually a “win or learn” experience.
I wish you all the very best.
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Have you been trying to raise money on your own without much success?
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