Tuesday, November 12

Why Do Some Grant Applications Fail

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Most of the grant applications available for business are competitive. The funds available for each grant is limited and so the government or grantor has to select those applications they feel best meet the grant program objectives.

But, after writing what you feel is a winning application, you are unsuccessful.  Why?

Well, in this article Bruce Patten from Pattens Group, a company that specialises in applying for and navigating the grants process outlines why some grant applicants fail and what you can do to avoid the same mistake.

As Bruce outlines quite often the committee or department will not provide quantitative explanations as to why your application failed to attract the funding. However, there are many common reasons why applications are unsuccessful. Knowing why they fail and avoiding these traps may increase your chances of success.

The main reasons for failed applications are:

The applicant is ineligible

The applicant did not read the eligibility criteria properly before preparing the application.  Some examples include:

  • Turnover threshold is too low or too high
  • Business entity type is ineligible eg company v trust

The project is ineligible

Again it is critical to understand the eligibility criteria and objective of the grant. If you application does not provide an eligible activity and the outcomes required, it will be rejected.

Project is presented badly.

The project needs to be presented to meet the eligibility requirements of the program. An example was a client who had 2 products and just wanted to merge them. Bad description. The application read the client had knowledge and experience making 2 products and would use that knowledge and experience to develop an innovative  new product. Grant approved.

The applicant has not provided information

Not providing the information requested makes it very difficult to impossible for those assessing it to approve it. Especially when the other applications have provided the complete information needed.

The funding amount requested is wrong

Requesting too little or too much funding can make your application fail.

We were approached by a company wanting $300,000 for a medical research project. After reviewing the project we increased the grant to $2.5m as the funding at the lower level could not be seen to be satisfactory. The $2.5m grant was awarded.

The project is not a fit

Applying for a grant for a project that is foreign to your business skills and activities is unlikely to succeed. Projects should build on the business current products, skills and market. If a deviation from them, the application should provide a clear explanation.

Project Objective

The project needs to focus on the grantors area of influence and importance. We had a client wanting to prepare an application for a cancer cure. They were shocked when we advised that is not the government’s interest. The government build hospitals, provides equipment and beds, and employs doctors and nurses. End of their responsibility. It is the doctor’s responsibility to cure cancer, not the governments. The government is interested in bed time, doctor involvement, reduced costs, patient back in the workforce. Grant of $2m approved.

Insufficient Matching Funding

Where matching funding is required it is critical to provide detail where that money will be sourced. You cannot suggest you will find it if the grant is approved. They need to know you already have the source of the matching funds arranged

Too Much Funds

With grant that require matching funding, the grant will not be approved if it appears you have access to significant other funds. This could be through your shareholders, directors or associates. It is important to address potential other funds even if these funds are unlikely to ever materialise into the business. Perception can become reality.

Not demonstrate need for funding

The government will not provide a competitive grant if the applicant does not show they need it.  Present a clear case as to why you need the funding and do not have sufficient resources available.

Need for funding

If you present a case for funding you need to explain why the project needs to be accelerated. What opportunity will be lost if the project is delayed and not commercialised quickly.

Insufficient Supporting Documentation

If you make statements or claims you need to be able to back them with supporting documentation and information.  Without them the grantor must reject your application.

Used incorrect forms

A simple mistake with dire consequences. Always check you are using the most recent application form.

Explanation of project is not clear

If the reader cannot fully understand the project and the logic behind it, they cannot in all conscience approve it. That is where an independent review and evaluation of your application is critical.

Benefits to wider community or industry

When looking at the benefits of your project, think outside your business and customers to the wider community and industry. What impact, directly or indirectly will your project achieve.

Management Capabilities

If the project is impressive but the management does not have the experience to commercialise the outcomes, the application will be rejected. If you do not have the required skills and experience to commercialise your project then appoint an executive committee or board of advisors with the necessary skills.

Conservative Application

The projections and estimates used in the application are conservative. While the need to not over exaggerate the projected results is relevant, it is also important not to underestimate the projections. Conservatism can lead to failure with a competitive grant.

For more information contact Bruce Patten from Pattens Group at grants@pattens.com or on 1800 PATTENS

Written by Bruce Patten: With more than 30 years’ experience claiming government grants, Bruce is regarded as the grants expert. He has a passion for helping new business get off the ground and has a long list of successful clients who have received the government funding they needed for research, development, management, commercialisation, exportation, small business support… and the list goes on.

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