What Grant Funding Actually Involves
Money that need not be repaid, in exchange for obligations that continue for years.
Grants are attractive because the money is not repaid and no ownership is given up. The cost is compliance, and it is a real cost that many recipients underestimate.
The restriction
Grant funds are restricted to the purpose in the award. Spending outside it, even on something obviously beneficial to the organization, can require repayment.
This means grant funding is not general working capital. An organization with substantial restricted funds and no unrestricted reserves can be simultaneously well funded and unable to pay its rent.
Reporting
Expect regular reporting on activity and expenditure, records that must be retained for defined periods, and in some cases audit. The administrative effort is real and should be costed into the application.
Where a grant permits a contribution toward overheads, claim it. Applicants routinely omit it in the belief that a leaner request is more competitive, and then discover the program is unfunded on the administrative side.
Matching requirements
Many programs require the recipient to contribute a proportion from other sources. Establish whether in-kind contributions count and what documentation is required, before assuming the match is available.
The timing
Grant cycles are slow, and many programs reimburse in arrears — the organization spends first and claims afterwards. That requires working capital to bridge, which is the practical constraint that excludes many small organizations.
Where to look in New York
State and city agencies operate programs for small businesses and for particular sectors and neighbourhoods, and there are federal programs with a technology and research focus. Community development financial institutions also lend to businesses that banks decline, sometimes alongside grant programs.
Whether to bother
Calculate the hours a bid will take, and compare that against the value net of restriction and reporting. For a small award with heavy compliance the honest answer is frequently no, and recognizing that is more useful than applying to everything.