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April 13, 2006: If you are a producer and you
are thinking about applying for federal grant funds, Elizabeth
Higgins of Louisiana Tech University’s Rural Development
Center has news for you: It’s not free money.
“It’s a gamble,” Higgins says. “There
are trade-offs in time.”
First of all, she says, you don’t know if you are going
to get a grant; then, if you do, you are obligated to carry
it off. And sometimes, Higgins says, your vision of how a
grant project fits into your operation shifts radically between
the time you write a proposal for a particular grant cycle
and the time implementation rolls around.
The bottom line, she says, is that you need to carefully
evaluate whether the time and resources you will inevitably
put into fulfilling a grant would be best spent elsewhere.
“Just because it’s money doesn’t mean it’s
good money. There’s always a cost to it.”
Higgins was on hand for the fifteenth annual Southern Sustainable
Agriculture Working Group conference in Louisville, Kentucky
last January to outline a number of grants available for producers
who want to conduct on-farm research, offer educational programs,
or tack a value-added component onto their operation.
She listed these positives concerning funding of projects
for the farmers attending her “Grants for Producers”
workshop at the conference:
- They can allow you to test new ideas with less personal
financial risk.
- They can strengthen a project by adding valuable resources
and collaborators.
- The information you collect may prove useful regardless
of whether you get funded. (The grant-writing process can
help you to evaluate your ideas and develop a business plan.)
“The best projects to seek grant fund for are those
you would be willing and likely to do with your own money,”
Higgins said. “You have to slow down and evaluate…If
this isn’t something you would be doing with your own
business, then it’s probably a bad idea.”
A common misconception about federal grant funds is that
they can be used to build infrastructure—such as a new
building or truck, or a saw mill—Higgins said. That’s
far from typical, she said, a fact that holds doubly true
for for-profit enterprises. “The grants that are there
[for infrastructure] pretty much all go to the public entities.”
Get your ducks in a row
Another useful bit of advice Higgins offered would-be grant
seekers was to begin the process as early as possible once
you are convinced an available grant is a good match for your
project. That includes meeting federal administrative requirements
such as have a DUNS (Data Universal Numbering Systems) number
that identifies your business and having a legal name for
your business. These take time, she said, sometimes up to
several weeks, and there are other hoops to jump through depending
on the grant.
When downloading grant application packets off of government
sites such as www.grants.gov,
Higgins said, it really helps to have the full version of
Adobe (versus the free Adobe Reader), which enables you to
fill out the forms electronically, save them and make revisions
and additions over time. Academic versions of the program
(available to students and teachers) can be had for around
$60, she said, and older versions are sometimes found on eBay.
Higgins rattled off a litany of grant program websites as
well as internet resources for grant writing and research
(see “Useful Grant Resources” sidebar). Access
to the Internet is critical in the competitive arena of successful
grant writing, she said.
Value-added Producer Grant (VAPG) Program
“There are very few grants for for-profit businesses,”
said Higgins. “This is a glaring exception.” These
USDA-funded grants require a one-to-one cash or in-kind match,
she said. Grant proposals are usually due sometime in the
spring or early summer. At this article’s publication,
the 2006 funding cycle had just past, with the annual Notice
of Solicitation of Application (NOSA) having been published
on December 21, 2005 and applications accepted until March
31, 2006.
The grants may be used for planning activities and for working
capital for marketing value-added agricultural products and
production of farm-based renewable energy. Eligible applicants
include independent producers, farmer and rancher cooperatives,
agricultural producer groups, and majority-controlled, producer-based
business ventures.
The Planning Grants are easier to write, Higgins said, whereas
Working Capital grants require developing a solid business
plan that can include financial details, feasibility studies,
survey work and any other applicable research.
While the grants won’t pay for infrastructure, they
can be used to cover expenses such as rent, travel, promotional
materials and office equipment related to the business. These
grants can also help forge partnerships, say between a farmer
and a canner. “It’s a way of bringing a non-producer
into a project and getting it funded,” said Higgins.
Eligible uses of planning grant funds include legal assistance,
feasibility studies, business planning and developing a marketing
plan. The maximum grant award is $100,000. Eligible uses of
working capital grant funds include operating and paying the
normal expenses of a business venture (with some limitations).
The maximum working capital grant allocation is $300,000.
For the 2006 funding cycle, $1.5 million was set aside for
projects requesting $25,000 or less. “…That’s
an advantage to smaller producers writing their own grants,”
Higgins said. “The federal government is matching dollar
for dollar what you’re doing on your farm, so it’s
a great deal.”
Ineligible uses of funding include starting or expanding
a farming operation, regular costs of production, purchasing
farm equipment, and permanent improvements to a farm or ranch
(including buildings, machinery and land).
Higgins said some of the positives of VAPGs include that
you don’t have to share your results, you can improve
your business with a significant level of funding, and that
the grants can provide both salary and working capital. Negatives,
she said, include the highly competitive nature of this national
grant program and the rather detailed proposal and reporting
requirements.
(See “Useful Grant Resources” sidebar for a template
to guide you through the VAPG-writing process, courtesy of
the University of Nebraska.)
SARE Producer Grants
These grants fund farm-based research and marketing and
demonstration projects to be shared with other farmers and
ranchers.
Eligible applicants include producers or producer organizations
interested in conducting research or marketing projects related
to sustainable agriculture. The projects must include collaborators
such as other farmers, researchers, extension agents, governmental
groups or NGOs, or others who help with planning, data collection
and dissemination of results.
Eligible uses of funding include costs of sampling and analysis,
project materials and supplies, outreach expenses such as
field days, travel, and outside labor costs (and your own
project-specific labor).
Ineligible uses of funding include starting or expanding
a farm or farming operation, buying equipment, permanent improvements
to a farm or ranch, full meals at field days or other large
gatherings (snacks/refreshments are okay), and testing of
commercial products.
Projects may be funded for up to two years for a maximum
of $10,000 for an individual producer or $15,000 for a producer
organization. There are no match requirements. Proposals are
generally due in the fall (look for an announcement in the
summer).
The application is relatively simple, and grants are evaluated
on a regional rather than a national level. On the other hand,
the funding level is relatively low, projects require collaboration,
and you are required to share your results.
Other grants available to producers include:
Higgins helpful hints for grant seekers
BE CAUTIOUS ABOUT IN-KIND CONTRIBUTIONS
- Infrastructure, including machinery is not generally considered
an in-kind contribution.
- When paying for services such as consultation, you must
document that the rate is what the service provider normally
receives (or must defer to IRS set standards for the service).
“The more you use federally established rates, the
less paperwork you have to do.
- “Don’t put something down as in-kind that
you can’t document.”
- “If it won’t pay for it in the grant, you
can’t use it as a match.”
- Using a civic facility such as a church hall: “If
it’s usually free, then you can’t use it as
a match…You have to show that it usually costs something.”
- “With a match, it’s better to err on the side
of conservative than it is to eek out every penny as a match…for
your paperwork sanity.”
START EARLY
So you just missed the boat on this year’s Value Added
Producer Grant cycle, but that puts you in perfect position
to follow Higgins words of wisdom and get moving on 2007 right
now. “The most difficult part is getting the financial
stuff together,” This you can do, she said, by utilizing
the resources of organizations like the Small Business Development
Center (www.sba.gov/sbdc)
and your local extension office.
GIVE THEM EXACTLY WHAT THEY
WANT
Respond specifically to the criteria that are the basis for
scoring, putting the most time and effort into those items
that are weighted most heavily. It doesn’t much matter
how well you did with the minutia if you missed the big picture.
FIND THE EFFECTIVE AVAILABLE
TOOLS AND USE THEM
Higgins’ ace in the hole for writing several successful
VAPG proposals was the template designed by the University
of Nebraska and available to the public (see “Useful
Grant Resources” sidebar). “I am three for three,”
she said of her track record using the tool.
BE THOROUGH
The most basic, and also the most important, rule in filling
out a grant application packet, Higgins said, is to complete
all forms fully. Approximately half the applications for a
grant she was recently involved with were round filed because
of missing information, she said.
TAKE A STEP BACK
Finding a holistic perspective is also a good strategy, she
said. “If you can tie it into the economic benefit for
the larger community, you’ve got a stronger proposal.”
Statistical data such as population and poverty level can
be useful tools for demonstrating a need for a particular
project. Illustrate the larger impact of your project and
you’ll gather extra points.  |
