Recently a start-up CEO described the acquisition of government funding as a “nightmare” and subsequently didn’t bother attempting to acquire any.
A few other startup’s took the plunge and just shook their heads over the “nightmarish” amount of effort it takes not only to access the funding but to actually deliver the funded project.
Several non profits have been informed that their core operating funding is now cut by 63% and will be available on a competitive basis.
The recent launch of The Funding Portal http://www.thefundingportal.com/ is a clear signal that there is a dire need for those companies or non-profit organizations interested in acquiring funds from government.
Acquiring government funding requires an understanding of government programming and the ability to translate between government and business. You should also be aware that the level of effort to acquire and report on $15,000 is very similar to $1,500,000.
After well over a decade of helping to acquire over $200M in government funding, here are a few things I learned that may help your organization access these funds.
1. Plan the application process with plenty of lead time, don’t start the day before it is due
2. Seriously consider partnering with other companies, non profits or higher education
3. Build a relationship with agency program managers, treat them as a partner and ask for advice wherever possible
4. What is the long term vision of your organization, your strategy to achieve this vision and does your project address agency and government priorities? ie are your strategies aligned with the government
5. Understand what the rules governing the use of the funds are up front (not after you have spent half of the funds
6. Demonstrated capability of the organization and implementation team is essential
7. Have a realistic expectation of when the project actually starts (i.e. cash flow)
8. Set up your proposal so it serves as your implementation plan including performance indicators
9. Clarity of thought is critical, (your proposal from the first page to the last page (including financials) needs to be clear, concise and cohesive) and written in a language the government will understand
10. You need to have skin in the game, governments are pushing hard at spreading risk
26 Jul / 3 Realities of Government Funding
Public sector funding has been undergoing major shifts for many years with the impact being felt across a larger base of constituent organizations. Change is inevitable, what is important is how your organization deals with it.
There are 3 indisputable realties of government funding:
1. It will always be there
Funding has been available from government programs for decades and it will not go away. It will however shift as economic and social priorities shift.
2. Change is inevitable
Governments are very large and thus adopt and adjust their programming slower than the actual need. This if your organization has a good handle on the current and future needs in your sector, you should be able to anticipate the direction of change, be prepared and reap the benefits. Really smart organizations will influence this change by working together with government agencies in a partnership modality.
3. Accessing funding is the easy part, delivering and maintaining compliance is the challenge
Many organizations I talk to make the assumption that, “…its just government money, they don’t really care.” Truth is, accountability is increasing by leaps and bounds and thus government programming is increasing reporting and compliance requirements and ensuring recipients deliver what was promised. Change control can be real tough! It is critical that your organization understand this and be prepared from the strategy stage of your funding endeavour.
Many organizations build partnerships, put together a consortium or engage with stakeholders for a specific short term goal.
This approach will result in long term failure and potentially significant financial and legal risk.
So what should you not do when considering a partnership, consortia or stakeholder engagement exercise:
1. Consider the relationship as a transaction
Many partnerships and consortia are formed for the sole purpose of acquiring funding from public purses or some other transaction. This type of transactional approach will result in failure. Ask yourself, “What do we do after this original transaction?”
2. Focus on “What is in it for me?”
Partnerships, consortia are supposed to be about achieving something not possible by any one organization. The question that must be considered is, “Whats in it for us?”
3. Start discussion with legal counsel
Partnerships, consortia and stakeholder engagement exercises are about trust, building and maintaining, a relationship. Bringing in legal counsel at the starting line suggests a complete lack of trust.
4. Focus on short term gains
These relationships are supposed to be about achieving something 5, 10 or 25 years into the future. Questions must be framed with this in mind and consider asking the impossible questions.
5. Try to retain control through Governance
Most governance bodies for consortia are put in place exclusively for self-interest versus long term strategy, growth and the greater good of the consortium. These types of relationships are about letting go, trust and strategy not command and control.
Lets face it, the strategic plan you spent months on developing, hundreds or thousand of man hours and similar amounts in consulting fees isn’t helping move your organization forward. Well, you are not alone; the majority of organizations that go through the strategic planning process also fail. Statistics put this rate at between 70%-90%. If a clear strategy and a plan to realize this is so critical, why do most organizations fail?
Two simple reasons:
1. there is no REAL strategy
2. there is no REAL plan
Strategic planning itself is part of the problem, yes I did state problem versus challenge! Organizations typically dive into a strategic planning exercise doing nothing more than planning with the term “strategic” tacked onto the process.
Real strategy needs to be developed before any planning exercise is even started. This strategy must consider a 360 degree view of internal and internal influences current and future. Strategy must differentiate your organization from others whether this is product, service, location etc.
Without differentiation there is no strategy.
From there plan development begins at the end. By that I mean the plan is developed starting at the end future state for the organizations and moves backwards. Ask yourself, “What do we have to do/acquire/stop doing in year 4 to reach year 5?” “How will we know we have reached this state?” “What do we consider success?” “Where do we need to invest and how much?” Where do we need to stop or reduce investments?”
At SPGroup we help you with strategy development followed by plan development and implementation. In other words Strategy and Planning.
It doesn’t have to be difficult.
Innovation is a tricky thing to measure so I guess it is easy to get confused when reading reports that rank innovators on the basis of research revenues or research expenses.
In Canada, Nortel was ranked as the top innovative company for many years due to its massive investment in research, today it no longer exists.
In the United States, P&G (Proctor & Gamble) increased their R&D budgets in late ’90′s to increase innovation in the company. The result was a significant loss of market share and termination of the CEO, a first for the company.
Studies have shown that large organizations are typically not innovative due to their size, hierarchical structures, bureaucracy, orientation to process. Of course there are exceptions.
The most innovative companies are typically the small, start-ups that are bootstrapping because in order to survive, they have no choice but to be innovative.
On the university front, the top “innovation” performer in higher education in Canada is the one with the greatest revenue. But does this mean they are the most innovative? I doubt it, especially since this is a measure only of the research enterprise and nothing else.
Innovation isn’t about how much you make or how much you spend, its more about what you do with what you have.
So what do you have and what are you doing with it?
Lets face it, competition for scare dollars is everywhere.
Many non-profit organizations (NPO’s) are feeling increasing pressure to do more with less while government regulations are adding escalating complexity and administrative burden.
Donors are becoming either more selective or strategic and are being approached by a growing number of organizations for funds.
Governments, foundations and other agencies are demanding more strategic approaches by NPO’s to reduce financial risk, lever funding, augment participation of others and transition towards sustainability of these organizations.
It is necessary for NPO’s to partner because:
1. 2 + 2 = 7
2. The risk of no longer existing is significant
3. Government funders are not suggesting partnerships but rather demanding them! http://www.tbs-sct.gc.ca/rpp/2012-2013/inst/csd/csd02-eng.asp
Strategic partnerships between NPO’s are challenging but can be accomplished if approached in the correct manner and done for the right reasons.
Are you ready?
Negative comments on the budget continue to spread across Canada.
This in itself is part of the innovation dilemma we face.
We tend to point fingers and blame the government for everything
- tax structures do not support innovation
- granting systems do not support innovation
- big business are punished by governments
- small business are punished by changes to government programs
- higher education research programs are too focussed on results
- This program sucks That program sucks.
- In its simplest form innovation is about YOU and your organization, not the government.
YOU are responsible for making the most out of what YOU have, not the government.
YOU are responsible for making this world a better place, not the government.
Pointing fingers is easy, being innovative is not.