The Grant Is Real. The Opportunity Isn't.

When a Grant Isn't Really a Grant

My last blog explained why grants for for profit businesses are so difficult to find.

This one explains something even more frustrating.

Not everything calling itself a grant actually is one.

I hate hearing that someone has been taken advantage of while looking for funding. Sometimes it's a nonprofit. Sometimes it's a small business owner. I've even had prospective clients tell me stories about paying a "grant writer" to pursue opportunities that were never really grants in the first place.

The IRS actively investigates organizations making misleading claims involving grants, scholarships, and foundations. Unfortunately, scammers are becoming more sophisticated, and some organizations operate in ways that are technically legal while leaving applicants with something very different than they expected.

Let's talk about the difference.

Contests Are Marketing

A common example is the online voting contest.

You've probably seen them.

Organizations are asked to submit an application, then spend the next month asking everyone they know to vote once a day.

What just happened?

Your nonprofit became their marketing department.

You drove traffic to their website every day for weeks.

Unless you're already a large organization with thousands of supporters, your chances of winning are usually slim.

Before investing that much time, ask yourself one question.

What's my return on investment?

Marketing Disguised as a Grant

A few years ago, one of my nonprofit clients received an invitation from a foundation asking for their sponsorship packet.

I searched for the foundation in my grant database.

It was there.

The foundation was legitimate.

So we applied.

A few weeks later our "award" arrived.

The grant wasn't money.

It was a discount on software sold by the company's for profit business.

The company had created a nonprofit foundation that offered grants in the form of discounts toward purchasing its own software.

Was it legal?

Yes.

Was my client disappointed?

Absolutely.

They had hired a grant writer, invested time in the application, and received a discount on software they neither wanted nor could use.

Personally, I think there are better ways to introduce people to your products.

Discounts Are Not Grants

I've also seen consulting firms advertise "grant programs" that ultimately provide discounts on their own services.

There's nothing inherently wrong with offering a discount.

Just don't confuse it with grant funding.

One puts money into your organization.

The other asks you to spend money with theirs.

Those are two very different things.

Read the Fine Print

Another opportunity looked promising until I found the terms and conditions.

Not an RFP.

Not a Notice of Funding Opportunity.

Just pages of tiny print.

Buried in those terms was a requirement that applicants share their participant contact information.

Think about that for a moment.

Would your donors, volunteers, or program participants appreciate receiving marketing emails because you applied for a grant?

Probably not.

Again, it may be completely legal.

That doesn't automatically make it a good fit for your organization.

Then There Are the Real Scams Too

Unfortunately, actual scams exist too.

Some collect detailed information about your nonprofit.

Others request banking information before you've even been awarded.

Some ask for application fees.

Others promise guaranteed funding.

As obvious as those examples sound, scammers are good at creating urgency.

When you're staring at an email announcing you've been "selected" for funding, it's easy to stop asking questions and start imagining what you'll do with the money.

That's exactly what they're counting on.

Follow the Money

The same question applies to many corporate give back campaigns and promotional contests.

Time is money.

Every hour spent chasing funding is an hour you aren't cultivating donors, writing stronger grant proposals, or serving your community.

Always ask yourself:

What am I giving in exchange for this opportunity?

Sometimes it's your time.

Sometimes it's your data.

Sometimes it's your mailing list.

Sometimes it's your credibility.

My Rule of Thumb

I've said it before, and I'll say it again.

There is no such thing as free money.

Every grant has strings attached.

The difference is that legitimate funders tell you exactly what those strings are.

If an opportunity seems too good to be true, too easy, or too fast, take a closer look before investing your time.

The best grants don't hide their expectations.

They put them right in the Request for Proposals

Questions I Ask Before I Apply

• Who is funding this opportunity?

• Is the award cash or a discount?

• What is expected in return?

• Am I giving away donor or participant information?

• Is there an application fee?

• Would I still apply if there were no marketing involved?