Writing a Funding Proposal

sought out. Oftentimes, funding to help support, expand, or improve your business can appear in both ways. Though this process may take substantial commitment of time and resources, the benefits of the funding will far outweigh any costs. This tool will help you determine how to find and apply for funding as well as common mistakes to avoid.

Where Can I Find Funding Opportunities?

The source of grant funding varies between each initiative and organization. Some are privately sponsored by foundations and others are supported by state or federal dollars.

Below are several common types of funding opportunities:

1. Government Agencies

   Government grants offer substantial funding opportunities for businesses but can be more competitive to secure. These grants are typically offered by federal, state, or local government agencies and may cover a wide range of industries and initiatives, including child care businesses. While accessing government grants may require navigating complex application processes, the potential benefits make them worth pursuing.

   Where to look:

   Look at state and federal websites. State and federal sites are frequently updated with open and available grants that may apply to your business. Start with broad research, for example at grants.gov, and from there, narrow your search to resources that may be more specified for child care businesses. Think about what federal agencies have a scope of work that your business may fall under, such as, the Department of Health and Human Services or Department of Education.

   Grants offered at the state level tend to be tailored more specifically to the needs of the residents of that state. State agency websites are a great place to start. Again, think of what agencies have work that overlaps with your own, check out the sites for Texas Health and Human Services to see what funding opportunities may be available. Search for the state grants department that would be responsible for publishing information on all available offerings in the state. Check your resources thoroughly and often to ensure you are staying on the forefront of new opportunities.

   Government grants are also offered by economic or community development organizations that aim to stimulate economic growth, support workforce development, and foster entrepreneurship within a specific geographic area. You can find your state or local economic development agency here. How economic development agencies share opportunities can differ greatly, but they usually have email lists you can sign up for to be notified about grants.

2. Foundations and Nonprofits

   Private foundation and nonprofit grants may be more challenging to find, but the success rate for receiving the grant funds tends to be higher. Oftentimes, these funding avenues provide the unique opportunity for a more personal connection with the organization, compelling them with your business’s mission and impact.

   Where to look:

   Use index resources like grantwatch.com to search for available grants across participating foundations. Search tools can refine your search to display results that only apply to your business. Don’t forget that your own network may be the best source of information. Consider contacting your local small business association or child care business owner’s network to find out what opportunities others have taken advantage of and see if they may be applicable to you. Ask for support from other business owners you trust and respect as they can support you from a place of mutual understanding.

3. Local and Regional Businesses

   In addition to government and nonprofit grants, businesses can also explore funding opportunities from other businesses. Many companies have corporate social responsibility (CSR) programs or philanthropic arms that offer grants to support initiatives aligned with their values and goals.

   Larger corporations often have well-established grant programs with defined application processes and criteria. These grants may be focused on specific industries, social causes, or geographic regions. To find these opportunities, research the CSR programs of companies in your industry or those with a strong presence in your local community. Look for information on their websites or reach out to their corporate giving or community relations departments to inquire about grant opportunities.

   Smaller businesses may not have formal grant programs, but they can still be valuable partners in securing funding. Local businesses are often deeply invested in their communities and may be willing to support initiatives that contribute to the well-being and economic vitality of the area. Approach small business owners or managers directly to discuss potential collaboration or sponsorship opportunities.

   When soliciting grants from businesses, it is important to demonstrate how your initiative aligns with their values and goals. Research the company's mission statement, CSR priorities, and past philanthropic activities to tailor your pitch accordingly. Highlight how your business or project can help them achieve their objectives while also benefiting the community.

   Consider offering recognition or publicity opportunities in exchange for their support. This could include featuring their logo on your website or promotional materials, acknowledging their contribution in press releases or social media posts, or inviting them to participate in events or programs related to your initiative.

   Where to look:

   Building relationships with business leaders in your community can also open doors to future funding opportunities. Attend local business events, join industry associations or your local chamber of commerce, and engage in networking activities to establish connections and raise awareness about your business or project.

How do I Know if a Grant is Right for my Business?

When considering a funding opportunity, it's crucial to assess if it aligns with your business needs and goals. Here's how to evaluate if a grant is worth pursuing:

1. Alignment with Business Goals: Evaluate whether the funding initiative's objectives align with your business goals. Consider if the grant supports activities like business expansion, quality improvement, financial relief, or program development.

2. Resource Availability: Assess if you have the necessary time and resources to fulfill the application and reporting requirements. Be realistic about your capacity to meet the demands of the grant.

3. Demonstrating Need: Determine if you can effectively demonstrate the need for funds. Gather evidence and financial documentation to support your application, showing how the grant will address specific challenges or opportunities in your business.

4. Fit with Eligibility Criteria: Review the eligibility criteria to ensure your business meets the requirements set by the funding organization. Consider factors such as industry, size, location, ownership demographics, or targeted program types.

5. Assessing Feasibility: Consider the feasibility of pursuing the grant. Evaluate if the effort required to apply is proportional to the potential benefits. Be mindful of deadlines and requirements to avoid investing resources in opportunities that may not be suitable.

6. Research and Documentation: Conduct thorough research on the funding opportunity to understand its scope and requirements. Save relevant website pages for reference and take notes on supporting documents provided by the funder. Ensure your goals align with the funding's objectives and eligibility criteria.

Writing the Funding Proposal

When it comes to writing your actual funding proposal it will be important to continually review the resources and requirements provided by the funding organization. Their tools and guides will provide you with the information you need to have the best chance of receiving funding. Follow their directions and you are on a path towards success.

Step One: Create your Business Overview

You will need to create a business overview. This will be a more in-depth look into what your business does, what you have accomplished and what your unique mission and values are. Flex your newly refined mission statement and set your business apart by listing qualifications or accolades that are specific to your business.

Step Two: Describe your Funding Needs

Next, you will dive into your business’s funding needs. This is the place to outline what expenses you intend to have covered by the funds and provide a justification for each expense. There are three major points you want to hit:

1. Prove the inherent value the funding has to your business.

2. Provide a timeline for your spending.

3. Outline what your overarching goals are for your business and the project that the funds will be contributing towards.

While it is important to demonstrate your need for the funds, it is also crucial to show your business’s financial stability. Similar to a lender, a grant funder does not want to be solely responsible for the financial success of your business. Show proof of contingency and a plan to maintain a positive cash flow to give the funding organization confidence in the financial health of your business. It is also beneficial to display an understanding of the community impact the funding will have. Show how it will improve your business, and in turn, how that will improve the community. Highlight specific examples of where change may be enacted or influenced by the funding.

Step Three: Write your Conclusion

The final element of your proposal is your conclusion. Think of this like the closing statement of your case. It should be strong, concise, and clearly reinforce your need for funding. Allow your conclusion to be a statement that stays with the application reviewer, reaffirms your need, and reiterates the lasting value of your business.

Step Four: Write Your Executive Summary

The first section of your proposal will be your executive summary. It is helpful to write this last since it is your opening statement to the funding group and summarizes what your business is, your impact, your needs, and your value in a concise paragraph. You may want to use an AI tool such as ChatGPT to help you develop an initial draft of your summary and assist you with brainstorming the language you want to use. Remember that software is a development tool, not your final product. Be sure to edit it to ensure it reflects your organization and proposal.

What happens next? Following up with your application:

The application is crucial to your success of receiving funding, but equally important are the steps following your application submission. To make sure you are set up for success:

1. Keep track of any login information used, contact emails to follow up to, and deadlines that may affect your application.

2. Use a calendar, paper or digital, or excel worksheet to help you stay on track. You may want to set a timeline for yourself to check your application status.

3. Check your email often and save communications and updates shared by the funding organization. Respond in a timely manner to any requests for supporting documentation and be prepared to adjust or amend portions of your application packet if requested.

4. If approved, keep track of reporting requirements, deadlines, and communication updates to ensure you stay compliant with the usage of the funds.

5. Be aware of the tax implications of receiving grant funding and know that most are considered taxable income in the year received.

6. Keep documentation of your spending following recordkeeping requirements for both funding and tax purposes.

7. Share your success and the impact the funding has had on your business with the funder!

Conclusion

Outside funding through grants is a great way to bolster the growth and improvement of your business. The process of applying for funding can seem daunting, but grant funds are an excellent way to support your business or jumpstart your plans.

As you apply for funding, use this handy list to help keep track of your requirements:

1. Follow the exact directions given by the funding organization when completing your application.

2. Use all available resources to support your preparation.

3. Use lists, tables, and spreadsheets to help keep track of objectives and requirements.

4. Keep communication clear, direct, and professional Keeping in mind that the funding organization is reviewing lots of applications.

5. Be sure to use the same email, name, and business name on all communications.

6. Keep all grant-related documents in a secure and easy-to-access place to prepare for reporting and monitoring.

7. Save updates shared by the funding organization and update your deadlines and plans for spending accordingly.

8. Stick to the deadlines set by the funding organization.

9. Maintain professional communication and complete all appropriate follow-up.

10. Keep all grant-related documents in your recordkeeping system for at least 7 years.