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Playing the grants game: experts tell about money for the asking.

Anyone who has applied for a loan knows it's not easy to ask for money -- even when the amount will be repaid, along with accrued interest. The rigors of that soul-bearing process may explain why many grant administrators have trouble drumming up applicants. How many hoops, one wonders, will I have to squeeze through to get someone to give me thousands of dollars?

"It's unbelievable," says Mike Sims, Director of Business Development for the non-profit Kenai Peninsula Borough Economic Development District, Inc. (EDD). "There are millions and millions of dollars people never ask for. They don't realize money isn't that hard to get if you know how to ask for it. First," he explains, "you've got to have a good premise, a sound need. And second, you have to know where to go to get the money."

Grant writers agree that there are three arenas to explore for grant opportunities. Currently, federal agencies and private foundations offer the most potential. In state government programs, the third arena, many grant budgets have been pared to the bone. Like most recession-hit states, Alaska can no longer match the largesse of past years' grant programs. Even so, the state continues to offer important business assistance through regional economic development centers. What follows is a brief tour of grant sources and effective grant writing techniques recommended by professional fundraisers and economic development experts.

The Prime Sources

Federal grants. For listings of current federal grant opportunities, Sims refers frequently to the annual Catalog of Federal Domestic Assistance, and the federal newspaper, Commerce Daily.

Diedre L. Bailey, Director of Grants and Sponsored Research for Alaska Pacific University, and owner of Resource Associates, a business specializing in grant writing seminars and consulting, combs through each day's issue of the Federal Register, looking for appropriate grant opportunities. An exhaustive record of the federal government's day-to-day business, the Register also lists every grant opportunity in the federal domain, from the Department of Commerce to the National Science Foundation.

Subscribers to the Federal Register can opt either for second-class delivery ($340 a year) or first-class delivery ($1,000 a year), Bailey notes. For some grant writers, an investment in speed may be worthwhile, considering the time it takes to deliver second-class mail to Alaska. "The difference may mean gaining a couple more weeks to prepare your proposal," she says.

Both Sims and Bailey mention the untapped potential for Alaskan entrepreneurs offered by the federal Small Business Innovation and Research (SBIR) grants. As an example, Bailey recalls how a Kodiak enterprise won a $50,000 SBIR grant from the Department of Agriculture to test a shipping container designed to keep scallops alive while en route to their markets. "Hundreds of these federal grants go begging for applicants," Sims adds.

Private foundations. It's an eye-opening experience to leaf through the annual publications that list foundation grants. There's a grant for every dreamer -- from laboratory innovators to poetry publishers, from beekeepers to filmmakers. The major annual guides to foundation giving are The Foundation Directory (which Sims calls the "private-side Bible"), and The Taft Corporate Giving Directory. Another excellent resource is an annual compendium called The Directory of Research Grants, which lists both private and governmental grant sources by topic. Both Bailey and Sims recommend the Grantsmanship Center, headquartered in Los Angeles, for the excellent grantwriting workshops it conducts around the country (including Alaska).

Large corporations offer grant programs, usually for research that advances new products and markets. Funding recipients often forget, says Sims, that strings are attached to business grants. Corporations may manage the funds more closely and expect the grantee's efforts to conform to the organization's mission.

State grants. These are not boom days for state grants, says J.P. Godfrey, an Alaskan business consultant serving small- and medium-sized companies. "Unless you're a minority or Native applicant," he comments, "a lot of the money has dried up." However, he notes that Alaska's Science and Technology Foundation continues as an important source of support for entrepreneurial ventures.

Whether the season for state grants is boom or bust, grant listings are published statewide in both the metropolitan and rural newspapers. For more immediate information about grants, you can ask to have your name placed on state departmental mailing lists.

Beyond the limited pool of direct grants, the state funds the Alaska Regional Development Organizations program (ARDOR). Sims' Kenai Peninsula Borough Economic Development District is one of ARDOR's 13 regional organizations that offer expert business consulting, including advice on how to locate grant sources and put together winning proposals.

Typically, the federal government provides block grants to each state, with broad mandates to support programs such as rural assistance, says Sims. Then the state distributes the funds to organizations such as Sims' Kenai Peninsula Borough EDD or to individual organizations and businesses.

Funding Often Connected

A federal connection sometimes is an important factor in applying for state funds. After the Kenai Peninsula Borough EDD won a $50,000 grant from the U.S. Forest Service to conduct research and prepare a strategic plan addressing the beetle kill problem in Kenai forests, the EDD received a matching $35,000 from the state Department of Commerce and Economic Development to advance the war on beetles.

Some state grants are available only to community applicants, notes Godfrey. For example, the Department of Commerce's Economic Development Administration awards REDI (Rural Economic Development Initiative) grants to municipal and village council governments. Businesses may be eligible for REDI grants through a joint proposal with a government agency.

Godfrey outlines a hypothetical scenario in which developers, working with a coastal town government, submit an overall economic development plan to the EDA with a request for funds to get a dock project under way. The community's vision includes a follow-on request for funds to develop a marina. The long-term plan would launch a number of new businesses, provide added revenues for existing businesses, and pump up local job opportunities.

Sounds great. So what's missing in this picture?

The applicants, says Godfrey. Local government leaders often are unaware of such grant opportunities and lack the know-how to promote their vision in a way that solicits long-term governmental investments. And that, adds Sims, is where ARDOR's regional economic development centers can step into the picture, offering leads and advice about how to pursue them.

Above all, Sims urges, don't limit your grant-seeking activities to just one of the above arenas. He recommends promoting a good idea on all fronts. If you can successfully solicit start-up funds from your local government or a non-profit organization, you may have a better chance of winning federal and state matching funds.

Proposing Success

Grant writers frequently compare their work to that of a detective. Building a consistent grant program involves searching out source organizations and forging relationships with their personnel. "That's the key to building and maintaining funding," agrees Bailey.

When possible, it's a good idea to arrange in-person meetings or telephone conferences with funding decision-makers. Such meetings are an excellent chance to display your character, concerns and professionalism. More important, your competitive chances will rise as you explore what the proposal reviewers are looking for, request feedback about your own prospects and learn about any workshops or literature resources the funding organization may provide to applicants.

As you seek opportunities to get acquainted with funding officials, make sure you locate the actual decision makers. Although it makes sense to cultivate federal agency personnel as you pursue a federal grant, your effort might be wasted. In fact, the federal government -- to decentralize the funding process -- has handed much of the decision-making authority over to state and regional offices. If that's the case in your situation, a local meeting may be your best bet, let alone more convenient.

Never underestimate the importance of political clout in your pursuit of funding, experienced grant writers advise. If you are applying for private sector or state funding, seek the endorsement of state and local political figures. Enlist the help of your representatives and senators when applying for federal funding. Few politicians will pass up the promise of publicity that accompanies an award of federal funds to a local project.

In general, a typical grant announcement outlines key points for grant applicants, such as eligibility and selection criteria, as well as those all-important deadlines for requesting and filing applications. When you find a promising grant listing, call or write for the application or Request for Proposals (RFP), which will list step-by-step proposal guidelines.

While reviewing a grant application, Bailey notes any special vocabulary used by the program administrators and makes sure she uses those terms in her proposal. "The application gives a picture of what the program people think is important" Bailey says. It's a good idea to reflect back their language "to show you live in the same world."

Writing Craftsmanship

A successful proposal combines the art of persuasion and the precision of a legal document (nearly an impossible combination, some might suggest). Above all, the proposal is a sales presentation. As all good presentations, it lines up the facts, sizes up the audience and maintains a high level of confidence, without losing sight of its objectives. Every student of rhetoric knows how important it is to fathom the wants and biases of each particular audience; learn what these desires are -- both conscious and unconscious -- and appeal to them often throughout your proposal.

Just as important, be sure of your facts. Avoid presenting important data in a series of unrelated "factoids." Instead, develop your case into a logical, coherent argument. Careful wording will be crucial if you've crafted a winning grant because, in most cases, a successful proposal becomes the contractual document. Specify and promise only what you're willing to see incorporated into a firm contract.

As you write your proposal, factor in the amount of time your office will require to administer the actual grant, including support services. "You have to carefully consider what the grant is going to cost you," Bailey says. She advises institutional grant writers to think twice about writing proposals for less than $100,000. Smaller grants are just as labor intensive to manage, but offer lower returns on the time invested. Further, a proposal will never get off the ground unless it's honest. "Don't pad budgets," Bailey warns. "Agencies quickly sniff out those added margins."

When the Answer Is "No"

Imagine you've mobilized your entire office and pulled together a major grant proposal. You've had your fingers crossed for months now, and today you received bad news. Your proposal ranking fell short of the winners' list. Now what? After giving yourself a few minutes to pout, get on the phone to request a de-briefing from the selection committee. If possible, obtain the proposal reviews and comments that led to your ranking. Above all, try again next year. With your fine-tuned second draft and a new set of proposal readers, your chances are much improved.

There are any number of reasons for a proposal to be eliminated during the first review. Mike Sims gives grant writers a handout titled, "Tips from Proposal Reviewers," which lists the most common proposal failures, including: non-responsiveness -- the failure to respond to specific requests for information; using empty, pompous language; making claims rather than citing facts; masking unoriginal ideas with many footnotes and citations; rambling through the proposal with no clear objectives; failing to present a solid project management plan; and assembling the proposal from boilerplate material.

Most of these problems can be traced to a basic lack of clarity about the project itself, which means the proposal writer sat down to write too soon. Clear objectives will emerge only after you've done your homework by gathering and organizing your information and you've wrestled with its implications at every stage -- from staffing to budgets.

If you're serious about learning the ropes of the grant business, volunteer to be a field reader for a federal grants competition in your field. Because federal agencies are short on qualified staff who can evaluate the enormous number of grant proposals they receive each year, most of them use a "peer review" system. A stint as a field reader yields a host of benefits. After learning the factors that distinguish winners from losers, you can apply the know-how in your next grant application. Meanwhile, you've become acquainted with the agency staff in your field and have gained insights into the type of projects they favor.

Keep in mind the true purpose of most grants, Sims advises. "Very few grants are given so you can do better in business. They won't give you money for a new gas station pump. But yes, they may fund a study to see if an area needs a new gas station." Sims warns prospective grant writers away from another common misperception. "People think they can live off grants, but they can't. Grants lead to specific end results."
COPYRIGHT 1992 Alaska Business Publishing Company, Inc.
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Title Annotation:sources of funding for small businesses
Author:Kilcup, Jodi
Publication:Alaska Business Monthly
Date:Oct 1, 1992
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