Grants
Contents
What is it?
Grants and subsidies are forms of aid given by governments or organizations (NGOs) used to stimulate certain projects (grants) / businesses (subsidies) from a political, ideological or social motivation. Funds obtained via this method do not need to be reimbursed and can be used for new or existing non-profit projects or business. Grants can be combined with loans, where the grant may cover the risks or softer parts. Subsidies may also cover running costs.
How does it work?
Most funds have pre-qualification criteria and a rating system related to certain subjects in the final proposal. Try to find a fund with aim and criteria best suited to your plans. Some donors are flexible and might be ready to adapt their criteria to your ideas. Most funds have a standard application form although completing an application entails more than paper work.
Who can use it?
Most funds have defined who may apply for a grant. Legal registration is mostly required. In many cases, you might need an intermediary legally registered in the country in which you apply for a grant.
Tips
- Try to build a good relationship with the grant provider, but avoid any act which might be seen as corruption.
- Show why you are the best choice to do a certain job/project and why the project is the best choice in terms of appropriateness, effectiveness or efficiency.
- Add a track record and prove that you are a social entrepreneur (including labour conditions and environment).
- Include your ‘operational’ or ‘business’ plan, including tariff setting and method of revenue collection.
Pitfalls
- Project/ businesses receiving grant money can become dependent on this money instead of generating enough income independently.
- It is necessary to evaluate beforehand whether the required time/energy and ‘dependency’ will pay themselves back.
- Risks that cannot be neutralized are often not calculated sufficiently beforehand, which causes problems when projects/ businesses are evaluated. This can have a negative impact on your creditworthiness in the future.
- Property rights/ ownership of the capital goods at the end of the project are often not defined beforehand.
- Before attracting grants, make sure you are able to meet donor’s requirements on reporting.
Who should you approach?
Please refer to this list of Grant providers
