What is a Grant Proposal?
Understanding grant funding opportunities for small business growth
Grant proposals are often thought to be exclusively for nonprofit organizations. However, many small business grants from funding agencies exist to support positive change and sustainability in the business sector. Small businesses should consider looking at grant opportunities to support projects, expansion, and needs without the burden of taking out a business loan.
Small business grants are increasing in availability, especially following the pandemic when and the need for businesses to need extra support in recovering from the economic impacts. Small businesses are vital to communities, particularly companies that offer an essential product or service. Moreover, businesses often offer measurable outcomes and opportunities desirable for grantmakers and funders. Grant programs can support businesses as they develop, grow, and work towards their mission and vision. Small business grant applications and processes are often competitive and highly desirable for small companies. Due to the high competition, small businesses must understand the grant writing process, the goals of the funding organization, and ways to build a successful grant proposal. This article will describe the function of a grant proposal and the most important elements for potential grantees to consider in the grant proposal writing process.
What is a grant proposal?
A grant proposal is a formalized request for funding investment into an organization. As discussed, the organization can be a for-profit company or a non-profit entity. Non-profit organizations typically use grants to support fundraising initiatives at the organization. Grant proposals serve the purpose of outlining a proposed project or business opportunity that a funding source can help support. Effective grant proposals can provide grantmakers with details about the organization or business, such as information about their mission, goals, business plan, and current funding levels, so that the funders are oriented to the current need for the business.
Local or state government agencies usually provide small business grants. Additionally, small business grants can be offered by private organizations, social service organizations, or other types of public health or local issue initiatives. Often, these organizations will issue a request for proposals (RFP), an open call for grant proposals. RFPs can be released regularly or with a one-time funding opportunity. Unlike small business loans, grants are not required to be repaid. However, there is often an expectation with reporting on deliverables, milestones, and progress from the funds invested into the business or project. Additionally, selection for a grant can be competitive and so having a complete, robust, and strong proposal is necessary to stand out among other applicants and potential grantees.
Grant proposal requirements
A successful proposal from a business will need to include different elements, depending on what is required from the funders or provided grant template. Every grant can differ slightly, but generally, there are key pieces of information that should be provided by grant seekers in their proposal (these elements are outlined below). Reviewing sample grant proposals that other businesses have submitted can help provide context for what a successful proposal entails.
- The organization’s history and mission. Grantmakers want to know about your business and why they should invest in your cause. To be able to do that, it is often necessary to provide details on how your business came into existence and the ongoing mission you are working towards. This part of the proposal can be in narrative form, describing the story behind your business. Of course, even in narrative form, it is important to be concise and direct so that reviewers can understand the context of your business efficiently and clearly.
- Executive summary. An executive summary will provide a large-scale view of why your business is in good alignment with the grant and how the grant will help the business work towards its cause. The executive summary will also provide an overview of the rest of the grant application so that the funders understand a roadmap of your application and what the main points will include. Using formal language is often recommended, along with points of what you want the funders to remember as they review your grant proposal.
- Needs statement and problem statement. When putting together your proposal, one of the most important sections is to explain the actual need of your organization and the problem you are seeking to address. Describing the statement of need and problem in clear, data-based, and measurable terms. You want to make sure that the funders understand the scope of the problem and why it is important to address it through your business model and through grant support.
- Project description. The project description part of the grant proposal is designed to explain where the funds would be used. Usually, this is considered a project — whether at a non-profit or for profit entity. The project description will explain what your business hopes to accomplish. Providing this detail in a step-by-step format can be helpful for readers to process your overall vision for your business, especially in describing the amount of funding needed to make this project come to life. You may consider providing a project budget with project costs as part of the appendix to your grant application.
- Goals. Goals should be written as specific, measurable, achievable, realistic, and time-bound (SMART) as possible. The goals described in the proposal should directly address the problem already identified in the grant proposal. Providing the time frame will help funders see how the project will grow and build over time, particularly with more detail on how the business will monitor the progress of the goals as funding is invested in the organization.
- Methods, project management plans and timelines. Providing a clear methodology for how you will achieve the goal with the provided funding is essential. This part of the grant proposal provides more detail about timelines, collaborators, and the “how” of your project’s process. This section supports the goals section because it can provide more granular objectives that support the larger goal that is being addressed and worked towards. You may consider having your team members who are experts on the operational part of the project review this part of the proposal. This way, no detail is left out from the perspective of implementation.
- Staffing. This part of the grant proposal is helpful to summarize the human labor needs to complete the project. Funders often like to know what human resource needs exist and how much of the funding will support these types of costs. Moreover, delegating the responsibilities and tasks for team members will provide evidence that the project can be accomplished, and that the business has the resources necessary to make it happen.
- A cover letter. A cover letter will introduce the grantor to the business and why they are a strong candidate for the grant program. The letter typically will cover the high-level details of the grant request and give initial context before providing more detail in the grant application. The cover letter can provide the headings addressed in the application, along with contact information for the funder to have for future communications. The cover letter should speak specifically to the grant itself, specifically why the business would be worth investing in.
Submitting the grant and beyond
Writing the grant proposal with necessary elements is the first step of many in the grant making process. Upon completing your proposal, you can submit the grant application and any other required documentation. This documentation may include project budgets, incorporation documents, or a project outline as necessary. Of course, before submitting, it is always a good practice to review all of the materials created to make sure they provide any required information the funder would like to know.
Once submitted, it is good to follow-up with the organization or funder and thank them for their time. Typically, funders will provide a timeline for what to expect as they make their ultimate decision and selection of grantees. You can also save a copy of the application for your records and reference in case other grant opportunities emerge that align with your business needs. Another aspect to consider while waiting is gathering letters of support that you can provide to the funders later in the process. Some grant applications may require these from the beginning, so it is important to review any requirements by the funder from the start of the application.
As mentioned, the grant application process can be highly competitive, especially for small businesses that can use the extra investment to grow or expand the business. However, once you have a template to work from, you can more easily apply to other opportunities and spread the word about what your business hopes to accomplish. Attending networking events, seeking more resources, and connecting with other small businesses may be a way to understand the grant terrain more fully.
Are you ready to have a better understanding of small business grants and how these can support your overall business funding and operations? Are you ready to leverage your business funding needs into a successful grant writing proposal?
Heartland is ready to help.
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