Understanding Different Types of Grants
There are generally three types of grants: government, philanthropy and local / place-based.
Government grants fall into two broad categories: business support grants and public good grants. Our experience at Open Food Network has been that business grants are generally easier to get and to administer, as opposed to public good grants.
Tax concessions are also available to for-profit businesses (eg R&D tax incentive) and to not-for-profits (eg Tax Concession Charity). If you are a small food enterprise experimenting with (and therefore taking risk on) new processes and systems, the R&D tax incentive could be better for you. It may be worthwhile getting a professional to help with the application, as it’s a schedule to your tax return and not all accountants have experience with this. Sean Moynihan (from Eaterprises Australia and Food Connect) has had experience preparing applications for community food enterprises and can be contacted here: firstname.lastname@example.org
Eligibility for philanthropic grants often depends on your charity status, e.g. Deductible Gift Recipient, Tax Concession Charity.
Types of philanthropic grants include:
- Organisation capacity (eg Lord Mayor’s Charitable Foundation – rare)
- Individual based (AMP, Myer, Ashoka)
- “Pro-bono” support e.g. legal.
Some trends in philanthropy:
- Traditionally grants have come from income generated by a capital fund, whereas philanthropic organisations are beginning to invest more of the capital itself in for-good projects i.e. social impact investment (which generates a social return and financial return).
- Financing organisations are using creative ways to minimise risk in their investment. For example, by using intermediaries to build capacity and filter potential investments (e.g. The Difference Incubator), offering “blended” investment which is part grant and part loan, or matching crowdfunding (e.g. SEFA crowd-funding match)
- There is some evidence of funds seeking to work together for systemic impact (e.g. AEGN Food and Agriculture group and Ripe for Change initiative).
This table from the School for Social Entrepreneurs Australia provides examples of different types of support available at different stages of development.
Local or place-based grants
This type of grant is from local government, regional development organisations or funds like FRRR. These tend to be smaller grants, but are a good place to start if you can frame your project around local outcomes.
When positioning for a local government grant be clear about whether you are targeting money based on environmental, health or economic outcomes. You may have an enlightened local government seeking systemic interventions across multiple outcomes (lucky you) but more often than not you will be framing a grant application to target one or other of the above sectors. Read this article for more tips on how to write a successful grant application.
If you want to ask any questions or continue this conversation, hop over to the Fair Food Forum
Image Credit: Isaac Bowen CC BY-SA 2.0
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