1-Repayable grants and results based financing are also a good way to reduce this and to graduate companies across the risk / return / impact continuum. If only all these grant programs were also coordinated...hence my second point:
2-I actually thought about a coalition of Founders coming together to have standardised minimum info (company name, etc...) on a blockchain like ledger and convince/force grantors (sic?) to have the same format to fill in automatically for Grants (unique identifier etc.) so the Founders can focus on responding to the unique program needs and their unique differentiator so to they don't need to copy paste.
I love this. I would join the coalition! It's like the common application for colleges. With grants, everyone has a version of "what problem are you solving" with different italicized subtext and word limits. These are also things that could be standardized.
And I agree with phasing funding types, and a bit more coordination across funders. Would be nice to have smoother "handoffs" between the blended finance partners across the spectrum, so the founders don't have to start from scratch every time.
I think a reverse common app might be possible: wrote one application and then have GPT reformulate it into a application for a new grantor with only ~20% new material needed.
Yes, that is true. I could see having a 500 word summary of your impact (then innovation, etc.) and then get GPT to fit it into various word count limits, emphasizing the criteria of the award. Then the organization just needs to keep the central source of truth up to date. I've played around with this a little, but I bet you could write a whole series on how to perfect it (or maybe, that's another product in the works from you!)
Repayable grant has been tried but the grantor never gets repaid as there is no way to record this in a company's accounts (can't be debt so is recorded as revenue therefore it's never repaid)
Revenue based financing has been tried but doesn't work well (investors get 5% of revenue capped at 3x--but this is bad for everyone: high risk for investors and entrepreneurs have to pay back 3x)
An alternative I've heard is a revenue based grant: investee repays 5% of revenue until 1x is repaid.
I've deployed $150M+ as repayable grants (usually booked as zero interest loan) and got substantial repayments over 10+ years in Africa. It's been done. Depends on how it's initially communicated and implemented.
Ah, ok. Thanks for that. I've only seen about 3 repayable grants of $1m each, none of which were repaid. Good to hear you had different experience. What % repayment did you get roughly? Less than 50%?
This is very illuminating of a problem I know nothing about, not being a grant seeker. I'd say congrats on your award, but I can see that you're not relieved from participating in a complex and expensive process in the future by your current award. Though it makes me wonder if being an entrepreneur on the open market these days poses any better odds than grant writing.
Indeed some awards are a net drain on the ecosystem: more entrepreneur time is waste applying than the value of the award.
We created sunlight.capital where entrepreneurs can see how many applicants and winners there are for each award so they can see if it's worth applying.
I love your piece. As a former funder, I can say that a lot of my time was spent reading, reviewing and critiquing grant applications.. and sometimes rewriting the grants that were probably written by professional grant writers. There were $1M+ project scopes that needed to be re-written into the language of the foundation using our specific strategy terms. My job in program was translation. If you calculate the time on the other side of the equation, you have so much wasted effort on both sides! I like how you reimagine a better system and the metaphors really resonate. I always advise friends who are starting social businesses, start your LLC and seek funding from private donors and investors. There are no strings attached with private donors but lots of strings with grants. Your piece really resonates and best of luck with your enterprise!!
Thanks so much for the "insider" perspective on this. What really gets me is, all the "waste" comes from a good place. Desire to use donor money responsibly or align program investments to broader strategy, as you note! But my hunch (hope?) is that we are getting close to an efficiency tipping point that will force us to do that broader system reimagining.
I read your article, alarmed at how the people who run these things forget that their job is to appropriately evaluate applicants and then to GIVE THE MONEY AWAY, then to review the agreed impact . . . your points resonate!!
1-Repayable grants and results based financing are also a good way to reduce this and to graduate companies across the risk / return / impact continuum. If only all these grant programs were also coordinated...hence my second point:
2-I actually thought about a coalition of Founders coming together to have standardised minimum info (company name, etc...) on a blockchain like ledger and convince/force grantors (sic?) to have the same format to fill in automatically for Grants (unique identifier etc.) so the Founders can focus on responding to the unique program needs and their unique differentiator so to they don't need to copy paste.
I love this. I would join the coalition! It's like the common application for colleges. With grants, everyone has a version of "what problem are you solving" with different italicized subtext and word limits. These are also things that could be standardized.
And I agree with phasing funding types, and a bit more coordination across funders. Would be nice to have smoother "handoffs" between the blended finance partners across the spectrum, so the founders don't have to start from scratch every time.
I think a reverse common app might be possible: wrote one application and then have GPT reformulate it into a application for a new grantor with only ~20% new material needed.
Seems doable.
Yes, that is true. I could see having a 500 word summary of your impact (then innovation, etc.) and then get GPT to fit it into various word count limits, emphasizing the criteria of the award. Then the organization just needs to keep the central source of truth up to date. I've played around with this a little, but I bet you could write a whole series on how to perfect it (or maybe, that's another product in the works from you!)
Yes, we are working on this😉
Grantable is a product trying to do this but a bit clunky still.
Repayable grant has been tried but the grantor never gets repaid as there is no way to record this in a company's accounts (can't be debt so is recorded as revenue therefore it's never repaid)
Revenue based financing has been tried but doesn't work well (investors get 5% of revenue capped at 3x--but this is bad for everyone: high risk for investors and entrepreneurs have to pay back 3x)
An alternative I've heard is a revenue based grant: investee repays 5% of revenue until 1x is repaid.
I've deployed $150M+ as repayable grants (usually booked as zero interest loan) and got substantial repayments over 10+ years in Africa. It's been done. Depends on how it's initially communicated and implemented.
Ah, ok. Thanks for that. I've only seen about 3 repayable grants of $1m each, none of which were repaid. Good to hear you had different experience. What % repayment did you get roughly? Less than 50%?
This is very illuminating of a problem I know nothing about, not being a grant seeker. I'd say congrats on your award, but I can see that you're not relieved from participating in a complex and expensive process in the future by your current award. Though it makes me wonder if being an entrepreneur on the open market these days poses any better odds than grant writing.
Thanks for writing this.
Indeed some awards are a net drain on the ecosystem: more entrepreneur time is waste applying than the value of the award.
We created sunlight.capital where entrepreneurs can see how many applicants and winners there are for each award so they can see if it's worth applying.
Love sunlight capital. Just added a couple more reviews :)
I love your piece. As a former funder, I can say that a lot of my time was spent reading, reviewing and critiquing grant applications.. and sometimes rewriting the grants that were probably written by professional grant writers. There were $1M+ project scopes that needed to be re-written into the language of the foundation using our specific strategy terms. My job in program was translation. If you calculate the time on the other side of the equation, you have so much wasted effort on both sides! I like how you reimagine a better system and the metaphors really resonate. I always advise friends who are starting social businesses, start your LLC and seek funding from private donors and investors. There are no strings attached with private donors but lots of strings with grants. Your piece really resonates and best of luck with your enterprise!!
Thanks so much for the "insider" perspective on this. What really gets me is, all the "waste" comes from a good place. Desire to use donor money responsibly or align program investments to broader strategy, as you note! But my hunch (hope?) is that we are getting close to an efficiency tipping point that will force us to do that broader system reimagining.
As someone who has filled hours writing these grant applications, I couldn't agree more! Thank you for sharing this.
HI Melissa
Bravo for your MUCH DESERVED award!!
I read your article, alarmed at how the people who run these things forget that their job is to appropriately evaluate applicants and then to GIVE THE MONEY AWAY, then to review the agreed impact . . . your points resonate!!
Jonathan Yach
http://linkedin.com/in/jonathan-yach-mrics-m-inst-d-79024017