Understanding
Grants
Grants are seldom, if ever, available for a personal-in-nature
need or disadvantage. Understanding what grants are and are
not is essential. Grants are NOT “free money,” as
some publications and commercials would have you believe –
money just sitting around to randomly give away. And not everyone
or any business or even every nonprofit qualifies to receive
a grant award. Generally defined: Grants are amounts received
for carrying on an (IRS-approved) exempt activity.
Do You Qualify?
Grants are donations of money given to charitable 501(c)(3)
nonprofit organizations and public agencies in order to meet
specific, agreed upon goals falling in-line with the entity’s
(IRS-approved) mission. Grants may come from charitable foundations,
corporations, service clubs or government agencies.
If you believe your grant request falls under one or more
of the above or you’re not sure, please investigate such
“grant award guidelines” under the Internal Revenue
Service (IRS) rules and regulations – IRS Publication
557. Generally, neither an individual nor does a for-profit
entity qualify to receive a grant. And not all not-for-profits
are qualified either. There are exceptions to this, mainly
in the form of scholarships, fellowships, research, education,
and based on other specific goals and mission of a grantor.
Other Grants
Other forms of grants may be available in the areas of economic
development, environmental, or other social or economic topics,
the arts, etc. But such grant funding is typically awarded
to individuals having the required credentials and expertise,
or in some instances to established businesses able to substantiate
and be accountable for such grant support. There are always
exceptions with regards to “grants,” but rarely
are they available for a for-profit startup venture, as a
number of infomercials and print ads would have you believe.
The Bottom Line
Grants should not be a focus to planning or starting a business.
Other forms of funding may be available to you , based on
you and your business’s ability to perform and compete
in the marketplace. Such forms of financial assistance (e.g.,
low interest loans, award funding with and without an obligation
to payback, which is not a grant, debit and equity financing,
etc.) may be available from micro-lenders, vocational rehabilitation,
Social Security and other government agencies, organizations
and trade associations, and financial institutions in the
community.
If you first plan and structure your (startup) business around
traditional and alternative funding options and resources,
and you can still justify the business’s viability, and
you also receive a grant, award, gift, or other low-/non-obligating
infusion of funds or assets, then you and your business will
benefit. But if your business planning is centered around
grants and gifts exclusively, you may never realize your goal
of getting into business or being a viable competitor in today’s
business arena.
Remember, the business world is an able-bodied world, and
we need to compete on their level. Make sure you first qualify
to receive a grant before you start chancing for the pot of
goal at the end of a rainbow.
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