Economic development grant programs are excellent sources of funding because they do not require giving up equity in your company in return. Economic development grant programs can also be great sources of funding for both non profit organizations or even governmental agencies. In fact, the majority of economic development grants are administered to governmental agencies, with funding passing-through to private sector and nonprofit partners, supporting the economic development project.
While competition for this funding is stiff, the good news is that there are tried and true ways of securing economic development grants. The key to successfully winning economic development grants focuses on comprehensive research, alignment to the funder’s priorities, meeting eligibility requirements, following the guidelines, clear storytelling and perseverance.
Economic Development Grants
Economic development grants are typically administered by the U.S. Department of Commerce, Economic Development Administration (EDA). These are grant funding programs that help boost struggling communities in rural, tribal and urban regions. The purpose of these investments is to revitalize local economies and to create sustainable livelihood for its residents.
Here is a look at some of the funding programs offered by the EDA:
FY 20 CORONAVIRUS AID, RELIEF, AND ECONOMIC SECURITY (CARES) ACT: The Economic Development Administration (EDA) has published has published an Addendum to its Fiscal Year 2020 Public Works and Economic Adjustment Assistance Notice of Funding Opportunity (FY20 PWEAA NOFO) making $1.467 billion in CARES Act funding available to eligible grantees in communities impacted by the coronavirus pandemic. Eligible grantees typically include governmental agencies, tribes and in some cases, non profit or even for-profit organizations, provided that they are partnering with the communities impacted and can document strong support and involvement. Learn more about EDA CARES Act funding here. Deadlines: None - applications are accepted throughout the year but once the funds run out, Congress may not reallocate additional funding.
FY 2020 PUBLIC WORKS AND ECONOMIC ADJUSTMENT ASSISTANCE PROGRAMS APPLICATION SUBMISSION AND PROGRAM REQUIREMENTS: The The EDA has published the FY 2020 Public Works and Economic Adjustment Assistance Programs Notice of Funding Opportunity (PWEAA NOFO). EDA’s Public Works and Economic Adjustment Assistance (EAA) programs provide economically distressed communities and regions with comprehensive and flexible resources to address a wide variety of economic needs. Projects funded by these programs will support work in Opportunity Zones and will support the mission of the Department by, among other things, leading to the creation and retention of jobs and increased private investment, advancing innovation, enhancing the manufacturing capacities of regions, providing workforce development opportunities, and growing ecosystems that attract foreign direct investment. You can learn more about the 2020 PWEAA program by clicking here. Deadlines: None - applications are accepted throughout the year.
FISCAL YEAR 2020 REGIONAL INNOVATION PROGRAM: BUILD TO SCALE PROGRAM (FORMERLY KNOWN AS REGIONAL INNOVATION STRATEGIES): The EDA has published the Fiscal Year 2020 (FY20) Build to Scale NOFO, making $35 million available to eligible entities to build regional economies through scalable startups. This year's Build to Scale Program includes three competitions supporting entrepreneurship, acceleration of company growth and increased access to risk capital across regional economies.Learn more about the funding opportunity by clicking here. The deadline has passed but the program is typically renewed each year.
FISCAL YEAR 2018-2020 RESEARCH AND NATIONAL TECHNICAL ASSISTANCE (RNTA) NOTICE OF FUNDING OPPORTUNITY: The EDA has published the Fiscal Year 2018 - 2020 NOFO for Research and National Technical Assistance projects. This NOFO makes $1.5 million available for Research and Evaluation (R&E) projects and $1.0 million available for National Technical Assistance (NTA) projects. Learn more about the program by clicking here. Deadline: September 30, 2020.
For Tribal Governments and some other Governmental Agencies, the EDA also offers Planning Grants. These are typically small grants of about $150,000 over three years that allow Tribes and other Governmental Agencies to engage in economic development planning.
Economic Development Grants by the Numbers
The EDA is part of the U.S. Department of Commerce, which had a budget of $17.8 in 2019. It’s important to note that this budget is for the entire Department of Commerce, not just the EDA. Since 2015, the EDA has awarded nearly 2,200 grants to support a wide range of economic development projects in economically distressed communities throughout the United States. The size of the grants has ranged from less than $100,000 to a high of about $20 million. But let’s be clear, the majority of grants the EDA awards are less than $1 million. Of the nearly 2,200 grants awarded since 2015, only about 1.4% have been $1 million or more. And of the nearly 2,200 grants awarded since 2015, about 1,050 have been awarded to government agencies. Since 2015, the EDA has awarded 512 grants to nonprofit organizations. Awards to nonprofits have ranged from a high of about $8 million to a low of $12,500. And since 2015, only one EDA grant has been awarded directly to a for profit corporation. The data above was obtained from USA Spending.
Availability of Economic Development Grants to Businesses and Nonprofit Organizations
As noted above, the majority of grants offered by the EDA through its various programs are provided to governmental entities of various types. For nonprofit organizations, the likelihood of obtaining funding through the EDA (assuming you have all the right elements in place) is about 25%. Those odds aren’t too terribly bad. Now if you are a private company seeking funding through the EDA, the odds of success are quite slim to say the least. But that doesn’t mean that a private, for profit company should completely count out the EDA as a source of funding. The key to success is finding the right governmental and/or nonprofit partners to serve as the lead applicant. In these cases, your company would serve as a sub-awardee, not the prime recipient. This strategy is actually quite common. One note though - governmental and non-governmental awardees of EDA funds are generally required to follow free and open competition guidelines. Exceptions include minimum purchase thresholds and sole source agreements (which are not necessarily easy to obtain).
Strategies to Get Grant Approval
Grants are an excellent source of funding because providing that you abide by the rules and do what you said you were going to do, the funds do not have to be paid back. And though they don’t require you to earn profit in exchange for the financial backing, you do need to convince them that they are investing in a worthy advocacy and cause.
There are no magic strategies to winning economic development grants. But there are tried and tested methods to give yourself a winning chance.
Research is key. It is important to study the purpose and priorities of the EDA grant program to which you want to apply. This enables you to cater a proposal that will align with their objectives and vision.
First, it is important that you engage a broad range of partners. You must also clearly illustrate how helpful the funding will be for your organization or project. Telling stories from the ground about its benefits to actual people will be of significant help. Localize it in a specific community to avoid a vague proposal with no focus. If you have been successful in previous grants, indicate it to strengthen your position. It is also important that you quantify the impact of your proposed project. Don’t just guess. Lastly, clearly present the costs to show that you are in total control of the project.
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