How can grants professionals collaborate with for-profit organizations?
What are the benefits of including for-profits in your grant proposals, and what are the pitfalls?
Blending my contributions with input from others participating in the chat, here is some of the best information shared.
1) There are some grants out there for for-profit enterprises, but most of the time, for-profits receive grant funding by partnering with nonprofits that act as lead agency for federal, state and foundation proposals. In this model, for-profits are partners or subcontractors within grant proposals. Government funding sources are typically friendlier to for-profit partners than are foundations.
2) Show me the money! Grants friendly to for-profit applicants and partners come from sources including state economic development initiatives; federal programs operated through states (USDA has many such programs, namely co-ops); and federal programs for green building, healthy housing, energy, manufacturing skills training (particularly for STEM, through the U.S. Department of Labor), social and senior services.
3) There is promise on the horizon for more innovative approaches to funding social and environmental projects. In the future, we can expect to see more for-profits being funded via grants from social impact bonds. Check out these articles on social impact bonds at state/local levels and social impact bonds at the federal level.
4) Looping for-profits into your grantseeking strategy can help you build relationships and networks in your community. At the end of the day, a grant application may not be funded, but the effort of developing proposal together can make it a lot easier to collaborate in the future. We have a comfort zone of working only with other nonprofits – maybe it’s time for you to stretch a bit!
5) For-profits can be easier to work with than nonprofit partners. In my experience, for-profits are responsive, professional and hungry for grant money. If for-profits believe in funding potential for a project, they can devote serious short-term resources to grantwriting. They seize on the potential return on investment. If the for-profit is truly engaged in the grantseeking effort, they can assign people from human resources, finance and program management to the team.
6) But on the flip side, for-profits may have unrealistic expectations about grants. For-profits are typically not grant-savvy. You as the grants professional will have to explain funding guidelines and restrictions, and manage expectations. Be prepared to field questions about when the grant will arrive and what it can be used for – always cite the RFP and funding history/preferences of the agency as you explain what the funding parameters are.
7) The main challenge in working with for-profits is getting them to flip their value proposition from value to them (profit) to value to society (impact). For-profits usually haven't had to make the “social case” for investment in the products. This is a new paradigm. Not only may they need your help articulating their social impact, they may also need your help in explaining how they will evaluate their work, using the formative-summative evaluation techniques that nonprofits are more familiar with.
8) Administrative barriers may crop up too. If you are applying to a federal program, your for-profit partner may need to get a DUNS number and get enrolled in SAM (the System for Awards Management). The online magazine "Funded" has this great basic article on creating a SAM registration.
Join us for next week’s #grantchat! The topic will be “Getting Started as a Grant Consultant” at noon EST on Tues. July 16.