Facts about Government Grants: Hint--Most Are Actually Contracts
2020 was the year that a lot of people, nonprofits and small businesses became aware of a new round of government grants. There was barely a news cycle that didn’t talk about what company was the latest to apply for an SBA (small business administration) grant . Even Instagram influencers were applying to federal programs to keep their brands afloat. (And yes, we have thoughts on that, but it’s not the time or place.) Most importantly, nonprofits became acutely aware that in order to diversify their funding, especially during a time when donors started to drop drastically in some areas, they needed to add government grants to their prospecting slate.
Still, government grants are a tricky area of expertise and for most small nonprofits they are not always a good fit in terms of time expended and opportunity. Knowing some basics about government grant writing can save you hours of staring at your screen making your eyes go dry as you scroll aimlessly through a government database. We’ve all been there. Here is a quick list of facts you need to know before applying for federal grant money:
Government grants tend to be large amounts of money and are seen as payments to contractors.
Deeper dive: For example, if you scan the grants offered by the USDA, you’ll see that they give out large sums to food banks to provide food distribution and free meals on a state level. This could mean millions of dollars each year and the government sees that particular food bank as a sort of contractor doing social services that the government doesn’t have the logistical capacity to do. Most government grants are similar to this sort of setup.
There are standard award floors and ceilings and the government has a set amount in place for each grant that you can see in advance.
Deeper dive: Unlike some foundation and private grants who do not guarantee a specific amount to be awarded, the government is incredibly transparent about how little they will give and how much they will give. They have a floor--the lowest amount to be awarded, and a ceiling--the highest amount to be awarded. They will clearly state this on each grant so you know what you can expect.
Transparency is key with these awards since the money being given out is taxpayer money; however, that also means get ready for a ton of oversight, auditing, and paperwork.
Deeper dive: Each administration that comes into the White House determines what their goals are for the next four years and this directly influences which social causes will be granted federal money. As taxpayers, our money is used to fund these grants so the government does its best to ensure that every single penny is accounted for. That being said, this means that the application process is going to be a lengthy one and you can expect to be asked for documentation on every single line item in your budget. During the award process, there will also be audits and the final reports could take months to complete. You can see this as ‘half-empty’ and a huge painful reminder of bureaucracy, or see it as ‘half-full ', a nice way to guarantee taxpayers that their money is being well used. (Ok fine, yes it’s an annoying process as well).
Since you are applying for a type of contract, you need to have hard evidence and data to support the outcomes of your work.
Deeper dive: The government is not known for taking chances on unproven concepts. IF they are giving out $500,000 (and that’s likely the floor of their award amount) they want to know that the nonprofit doing contract work has proven their value and success. We would not suggest applying unless you have years of demographics, data, and numbers on your side. You also want to have already worked with an evaluator to put together a literature review that proves your evidence-based approach to programming. Not there yet? Stick to foundation and private grants as you build up your nonprofit’s numbers.
Many of the grants available are considered “Cooperative Agreements”.
Deeper dive: if you are a public health nonprofit this will likely come up. Cooperative agreements mean that you are working closely with the government and the award money is not necessarily considered a grant. No, you don’t have to pay anything back, it's not a loan. However the money is categorized differently and it likely means that you won’t be able to operate independently, but in tandem with a government agency. For example, if your nonprofit works in vaccine trials and needs funding then the government is likely to award you a cooperative agreement.
After reading the above you might think that federal grants aren’t a good fit for your nonprofit, but even though they can be tedious, there may still be good opportunities in the federal funding arena. For example, you may want to apply for an AmeriCorps grant (National and Community Service agency). Numerous small to medium nonprofits use AmeriCorps government money to help fund their “boots on the ground” work by being able to hire workers through paid government stipends. Or maybe your nonprofit is focused on the arts and you have applied for funding through the National Endowment on the Arts. While most government grants are large contracts directed towards established nonprofits, there are still opportunities for those starting out. Like we saw in 2020 and 2021, many nonprofits applied for an SBA or SVOG grant that opened up due to COVID-19.
Mockingbird was especially aware of this need during the past year. That’s why we started to offer up consultation and admin services to those looking to apply to these types of government grants. Being based in Los Angeles, we have seen many arts nonprofits go through the SVOG process (Shuttered Venue Operators Grant) -a grant offered to theatres and live performance groups who had to shut down. This grant covers numerous types of operations and if that one doesn’t quite fit your nonprofit work then a Small Business grant could help instead.
Interested in finding out how to apply or what we can do to make that process an easier one for you? Contact us here to schedule an initial call. Or if you are ready to get started on other types of government grants we have an in-house specialist who solely works with government grants and is an expert in the federal programs life cycle.
