This article assumes that much (20%+) of your revenue will come from grants for the foreseeable future (5+ years) and it’s worthwhile to invest in doing it right.
This year you’re going to be great at fundraising and here’s why: you’re starting with a plan. You know there is free money out there but somehow, even if you win a few, it seems to be a game where you don’t know the rules. That’s frustrating.
“Tactics without strategy is the noise before defeat.” -Art of War
To begin we need a strategy. From a big picture perspective, the strategy is that Grant writing is a sales process. This may seem odd (and it is odd) but once you start with this framework it makes everything make a lot more sense.
If you say “but I don’t know how to do sales” don’t worry. I believe you do. Here’s why:
You have been doing sales your whole life.
Dating is sales, getting hired is sales, getting into college is sales, convincing a friend to go on a road trip is sales.
Any sales process has a sales funnel:
At the top you have a lot of leads with Awareness of your product.
At the bottom you have a few sales who take Action to buy your product. Hopefully.
If you don’t start with a lot of leads you won’t have any sales.
So let’s start with the leads.
make a list of potential funders
To get started, here’s a spreadsheet of 300+ grants, accelerators, conferences and impact investors that I’ve curated. It’s the best of the best I’ve found for grants in Africa. It’s free to use.
(There are other funder lists for other sectors. If you are a non-profit in the US, GuideStar has a great database.)
To make this easier, get clear on the following:
With these three pieces of information you can filter the leads in the spreadsheet to something manageable.
Let’s say we want to win at least one grant this year. It’s realistic to apply for one grant per month. At roughly a 10% win rate, which is conservative, you should win one. Then, working backwards, you’d ideally need to be in touch with 25 grantors . And to do that you’d need to research 100+ (because not all grantors are going to be a fit).
You might be saying “whoa! that’s crazy. I can’t do all of that.” First, you now have a database of 300+ funders so you have a head start. Second, you can’t research 100+ grantors today or this month, but over the year you can. That’s why we are making a plan.
And you need a plan because this is a big project. It’s going to make up 20% or more of your revenue this year. If your annual budget is $1,000,000 expect to raise $200,000 to $1m in grants.
Of the ones who fit your criteria, figure out how they work. Is it a blind application like NIH or do they only work through referrals like Jasmine Investments. Do they make a decision by committee like InnovateUK or do they have one person who makes the final call like GIF. What are the chances of winning? I avoid Prizes as usually 1,000+ people compete for 1 winner’s spot. Government funding is usually a higher chance of winning but usually have an arduous application and reporting process.
Note: if you already have grants you plan to apply for this year, go ahead. This blog series will only make your grant applications more effective as we go through this process together. My goal for you is that by the end of this you will increase your win rate by 10 percentage points. That is, if you were winning 10% last year then you’ll be winning 20% the year after this. That’s my goal for you. That means you can either double your organization’s income or halve your work.
online audit (of your company and your personal brand)
Remember that grant writing is a sales process and for a sales process you need marketing support. Even though the grantor plans to make an unbiased decision about whether to invest in your organization, they are human. If they have heard of you before they are more likely to buy.
Here’s how they might have heard of you:
There are other organizations applying to the same grant as you. How well known are they compared to you?
I like to summarize the results compared to competitors.
The 3 on the right have raised a lot more money than those on the left. Can you see any difference in the data?
You’re right, they have a lot more online traffic, backlinks, followers and news mentions.
You might say “but maybe they got more news mentions because they were more successful.” And you are certainly (partly) right. But at one point, just like you and everyone else who started something great, those organizations on the right had zero news mentions. Everyone starts at zero.
Here’s my template for doing your own Online Audit.
More tools for tracking:
What’s coming up later this year
Mark off half a day each month in your calendar to work on this project. I find that if I’ve already committed the time I’m more likely to do it.
Second, sign up for this newsletter here so you'll get the next article on winning low-hanging fruit.
Good Grantor; Bad Grantor
Good grantor asks the entrepreneur “what impact metric is the most important in your business and is cost effective to measure?” Bad Grantor gives a laundry list of 5-20 impact metrics they want measured, regardless of how useful they are or costly to measure.
Good grantor has a short application form to quickly evaluate if there is a fit with the enterprise. Bad grantor asks the entrepreneur to write down a 20 page business plan as the first round of an application before they can talk to the grantor. SNV CRAFT and GIF do this well.
Good grantor knows the entrepreneur is extremely busy and on the verge of mental breakdown and burnout and respects the entrepreneurs time even by paying the entrepreneur if they are late to a meeting. Bad Grantor thinks they are more important than the entrepreneur and shows up to meetings when they are ready. A16z (a VC) does this well.
Bad Grantor believes that seeing an entrepreneur would make their decision biased and tries to avoid meeting the entrepreneur. Good Grantor knows that human connection is one of the most important things and that trying to remove bias in this way causes more harm than good.
Bad Grantor lets the entrepreneur know if they are awarded funding 6 to 18 months later, when the funding is likely no longer relevant to the entrepreneur’s goals. Good Grantor knows the best entrepreneurs are in high demand. IF they don’t fund them someone else will and they move fast.
Bad Grantor is okay with procedural delays like waiting to get a check signed for 2 months. Good Grantor knows that a 2 month delay could put an entrepreneur out of business and fights to push finance approvals through.
Bad Grantor thinks that sending $1m in funding 2 years later is still worth $1m. Good Grantor knows time is money, with a discount rate in startups around 40%, $1m two years late is only worth $360,000. Saying they gave $1m would be a lie.
Bad grantor gives an entrepreneur 1 time slot option to present their business to the board. Good Grantor finds time in the entrepreneur’s busy schedule for the board to come to the startup’s office.
Bad Grantor doesn’t allow project management costs to be included. Good Grantor requests that at least 10% of the budget be for overhead to avoid burnout and ensure the sustainability of the project.
Bad Grantor has an application deadline. Good Grantor has rolling application deadline to be ready for entrepreneurs when they need the money. DOEN does this well.
Bad Grantor believes that micromanaging a company to come up with innovative ideas is the solution. Less innovation means more micromanagement is needed. Good Grantor knows that any team capable of coming up with meaningful innovation will be exceptional. And Exceptional people don’t work well with micromanaging. Gates Foundation does this well.
Bad Grantor is a bean counter. Good Grantor is a sounding board to bounce innovative ideas off of.
Bad Grantor goes home at 4:45. Good Granor goes home when their portfolio companies don’t need them anymore.
Bad Grantor communicates through an info@ email address. Good Grantor gives their personal email and whatsapp to their portfolio CEOs.
Bad Grantor has an opaque application process. Good Grantor is transparent about the application process. USAID GDA does this well.
Bad Grantor says “I know you asked for $1m but what can you do with $200,000?” Good Grantor asks “what would happen if the budget could be increased?”
Bad Grantor has bureaucracy creep until a $1m grant requires $1.1m of paperwork. Good grantor has one metric.
Bad Grantor won’t reinvest because they don’t want organizations to be “dependent.” Good Grantor has a fund set aside to increase the funding of their most successful investments. Gates Foundation and SBIR do this well.
Kyle founded Grant&Co after running a biogas company in Kenya for 5 years. We raised a lot of grant capital there. And now we help other entrepreneurs raise capital.