The first important step in applying for a funding opportunity is to have a strong understanding of your own organization: its capabilities, needs, and long-term objectives. This understanding ensures that the funding opportunity is a good fit and benefits your organization, instead of overwhelming your abilities. Here are three things that are important to know about your organization before you apply for funding:
First, winning a donor’s contract means that you are subject to all the policies, regulations, and requirements of that donor. Especially for large donors like USAID, the requirements and reporting duties of the contract can be very demanding. To manage them, your organization must have its internal infrastructure in place, including robust financial, data collection, and human resource systems. If your organization does not have these capabilities, you will not be able to successfully manage the contract and could burden your business.
For this reason, smaller companies seeking to work in emerging markets should consider applying to grants from family foundations, leveraging connections with wealthy individuals, using online kick starters, or winning a subaward. A multi-million dollar contract with USAID could overwhelm your capacities and cause the contract to be canceled, instead of benefiting your organization. In contrast, family foundations offer a more flexible, manageable source of funding. Often times, they will be more willing to work with you and to tailor their grants to your proposed project. Do not hesitate to reach out to them with a proposal!
Second, ensure that the funding opportunity meets your needs and goals. In general, you want to find a funding opportunity that plays to your organization’s strengths and fits into its scope. The funding should be strategic and help to achieve your future goals. Be careful of chasing funding for the sake of money; doing so could force you to reshape your organization or add unwanted new areas.
For example, if your organization specializes in commercializing a type of fertilizer, then you should find funding opportunities that focus on fertilizer. If there is a funding opportunity that is trying to promote nutrition through improved varieties of potatoes, then that funding opportunity would not be a good fit for your organization. Unless your long term goal is to eventually expand into nutrition, pursuing the funding would force your organization into a mold in which it ultimately would not be successful.
Finally, it is also important to understand the type of funding opportunity and how it affects your organization. In general, funding opportunities fall into two categories - grants and contracts – with each determining what regulations must be followed and who owns the final project. Grants tend to be the most open and flexible, and the recipient owns the final product. Organizations with a specific project idea in mind should look for grants. In contrast, contracts tend be stricter and have more demanding regulations. The donor owns the final project, and specifies a project they would like to have done through the contract. As a result, larger organizations or organizations seeking to take on new projects should apply to contracts.
Now that we’ve discussed how to identify the appropriate funding opportunity, the next step is to understand the request for proposals itself! Next week, we’ll be exploring how to read and respond to funding opportunities.