Both environmental non-profits and new green businesses benefit from grants that help fund their eco friendly mission. What exactly is a grant? Grants are sums of money awarded to finance a particular activity or facility. Generally, grant awards are not intended to be paid back. Federal agencies and other organizations sponsor grant programs for various reasons. There are many sources of grants, kinds of grant-makers, and strategies for securing grants. People base entire careers on helping specific types of organizations to locate grants. So how does one go about finding a grant? While there is no one-size-fits all technique to find and apply for grants, there are strategies to sort through the vast array of grants available.
This guide aims to provide a brief overview of types of grant-making organizations, and provides resources for further research. There are three main types of grant-making organizations supporting green organizations, 1) governmental agencies, 2) private foundations, and 3) charitable public foundations. In discussing grants, it is also interesting to note that there is a fourth entity which has entered the marketplace, 4) the Beneficial Corporation, also known as the B-Corp. These “fourth-sector” organizations advocate decision-making that supports the environment and community while also seeking profit.
(1) Governmental Agency Grants
The Government in the United States offers grants to various projects that it wishes to support. Many of these projects are environmental in nature. The Federal Government is the major source of governmental grants, yet state and local governments also offer grants from their own budgets in addition to acting as the distributors of a portion of federal grant funds.
Visit www.grants.gov to search a database of all grants offered by federal agencies, including the Environmental Protection Agency (EPA). Small businesses and non-profits are both eligible for grants listed on www.grants.gov.The advanced search option allows grant seekers to search by agency, eligibility, and category. This website also includes detailed instructions regarding grant applications.
Another database of governmental funding is the Catalog of Federal Domestic Assistance (CFDA) (http://www.gsa.gov/portal/content/101097) which offers a complete listing of federal assistance for state and local governments, non-profits, for-profits, and individual businesses. You should use this resource to locate a grant source and then contact the agency that offers the grant.
While grants offered by the EPA are included in the Grants.gov database and the CFDA, also check out the EPA’s grants website (http://www.epa.gov/ogd/) for more information about and instructions detailing applying for EPA sponsored grants. Furthermore, at http://www.epa.gov/ogd/grants/regional.htm there are links to each of the regional grant offices, providing additional information about grants for a specific region.
(2) Private Foundations: Corporate, Family or Independent
Private foundations are non-governmental, non-profit organizations that distribute funds from a single donor source.
Some corporations fund their own private foundations that disperse grants to non-profit and community organizations. These Corporate Foundations often provide grants to organizations and non-profits in the communities they serve or where their employees live.This provides corporations a vehicle to help non-profits and organizations, showing the community that they care while making their brand visible.Some examples of private foundations that give grants towards environmental work include Johnson and Johnson Family of Companies Contribution Fund and The Merck Company Foundation.
Family foundations are funded with an endowment by one family or individual. The board of a family foundation consists of at least one member of the donor’s family. However, “family foundation” is not a legal term and has no exact definition. Two examples of family foundations are the Billand Melinda Gates Foundation and The William and Flora Hewlett Foundation.
Independent foundations also rely on an endowment provided by one or a few individuals. However, with an independent foundation, the board makes grant-making decisions without input from family members of the original donors. Some examples are the Rockefeller Foundation and the MacArthur Foundation.
(3) Charitable Public Foundations
Public foundations are public charities that give grants rather than perform services. Distinguishing them from private foundations, public foundations must receive continual donations from a diverse group of donors.
One type of public foundation is a Community Foundation, which seeks to aid the residents of a particular region. Examples include the New York Community Trust and the San Francisco Foundation, both of which make donations to environmental organizations in their respective regions. Other types of public foundations may tackle a particular issue rather than focus on a specific region.
There are a number of databases with information about grants offered by public and private foundations:
The Foundation Center (http://foundationcenter.org/) connects grant-seekers and grant-makers, offers a comprehensive search of grant opportunities, collects research about philanthropies, and offers classes and educational programs regarding foundations and grants. Although some of the resources require a fee, there are many provided free of charge.
Another resource is the Minnesota Sustainable Communities Network Next Step website (http://www.nextstep.state.mn.us/index.cfm). This site offers a list of grants and loans for projects working toward creating amore environmentally sustainable future. This list targets Minnesotans, but many of the grants are open to groups nationwide.
Another interesting resource to look into is Seeking Grant Money Today, a blog written by a professional grant writer. This blog offers advice and information in a laid-back, approachable manner, as well as postings about upcoming grants.
In addition to foundations that supply monetary grants, some foundations supply in-kind services.
For example, the Taproot Foundation (http://www.taprootfoundation.org/) offers grants of consulting work done by volunteers. Business professionals help non-profits create better websites, logos, and names; categorize the organization’s donor information more efficiently; or improve the organization’s human resource department.
(4) New Frontier: B Corporations, the “B” is for “beneficial”
Usually in the United States we think of three sectors: corporations, governments (federal, state, and local), and non-profits. Each depends on the others. Non-profits rely on grants from governmental agencies and foundations funded by corporations and individual donors. In exchange, the non-profits help the government and corporations by supporting the environment and community. By performing charitable services, the non-profits decrease the pressure on governments and corporations to take on these tasks entirely on their own.
But what if corporations made a commitment to benefit their environment, community, and employees? If a corporation carefully did right by all its stakeholders (the people who are affected by the company’s decisions and actions) and not just their stockholders, perhaps there would be reduced pressure on non-profits. However, traditional companies are responsible only for earning profits for their stockholders and owners, and may find it difficult to incorporate the interests of other stakeholders.
This has led some business leaders to establish companies that are somewhere between non-profits and for-profits, creating an emerging “fourth sector” of companies that embrace environmental and social improvement rather than simply the bottom line. Sometimes called social enterprises, or for-benefit corporations, these companies commit themselves to considering the needs of the community (including employees), the environment, and stockholders.
All corporations often find it difficultto justify to their shareholders decisions that do not maximize profits. Therefore, an increasing number of companies have sought to add a “stakeholder interest consideration” requirement to their governing documents. A non-profit called the B Lab (B for beneficial) (http://www.bcorporation.net/) seeks to help companies become what it terms “B Corporations” through a system of ratings and certifications. Each prospective B Corporation takes a survey to determine its beneficial impact on the environment, the community, and its employees. If it scores above 80 out of 200, it may certify as a B Corporation. This requires the new B Corporation to change the governing documents so that the commitment to all stakeholders is legally enshrined, and so that this commitment will survive a change in management or ownership. Thus far the B Lab has certified 80 businesses and counting.
Currently, B Corporations and other fourth sector organizations do not have their own classification under federal or state laws. Some people believe that for-benefit organizations should be placed into a unique legal category in order for the movement to flourish, as this would clarify their part in the economy and attract investors and funders.
In Minnesota, two state legislators introduced a bill that would provide “socially responsible corporations” an opportunity to guarantee that the directors remain responsible to all the stakeholders and the public interest. However, this law would not create a new tax category. Proposed in February 2007, the Minnesota legislature has not yet passed this bill.
People have also suggested the need for specific tax categories for for-benefit organizations to help these enterprises find their place between for-profits and non-profits without being penalized by the current tax system.
Thomas Billiteri’s article “Mixing Mission and Business: Does Social Enterprise Need a New Legal Approach” summarizes arguments for and against specific proposals to changes in the tax law. (The article is available as a PDF at http://www.aspeninstitute.org/sites/default/files/content/docs/pubs/New_Legal_Forms_Report_FINAL.pdf). Nonetheless, as of the writing of the 2007 article none of these proposals had been integrated into a formal plan of action.
A new environmental organization must make choices as it defines its mission, create its structure, and locates funding. One of the first choices it will face is whether to become a part of the growing fourth-sector B Corporations, innovative but undefined, or to become a non-profit organization. The next decision will be to find funding. For an environmental non-profit this will most likely entail seeking governmental and foundation grants.
Hopefully you can use this information to start your grant search. Grant writing may be long and arduous, but as your organization flourishes with the funding that you find you will see that the results are well worth the effort, especially as you help the environment with your work. Good luck and happy grant hunting!
