Do You Have to Pay Back a Grant?
If you are new to the realm of grant funding, then you may wonder, “do I have to pay back a grant?” The short answer is no. However, if you do not abide by the rules outlined by the funding source, then you will have to return the funds.
While grants are “free money,” they do come with ‘strings attached.’ There are usually strict guidelines on how to win a grant. If you spend the grant funds on something without the approval of the funding source, you’ll likely have to return the grant.
Also, no grant maker will allow funds to be wasted, abused or used fraudulently in any way. Failure to abide by the stipulations set forth by the funding source will likely result in severe financial and legal consequences, including the possibility of being banned from applying for grants in the future and/or face jail time.
To summarize, you won’t have to pay back the grant as long as you follow these tips:
- Adhere to the guidelines outlined by the funding source.
- Only spend grant funds on products, services, etc. approved by the funding source.
- Submit your reports, statements and invoices on time.
- It’s best to keep both a hard copy and an electronic copy of all reports and records.
- DO NOT misuse funding, whether by fraud, deceit, stealing. or any other way. It’s not worth the risk.
What are the next steps?
Now, you may want to rush forward and apply for grants. However, you know what would be so much better? Instead, make sure you’re grant-ready! As part of your preparation, it may take you some time to gather all the required documentation. Once you are grant-ready, you are then set to begin your grant-search ‘journey!’
FIND: Funding sources generally award grants to benefit the community. They fund specific projects and programs – not business overhead expenses, such as rent, wages, etc. So if you don’t have an actual project or program in mind, it is doubtful you would be eligible for any grants.
APPLY: To apply for a grant, you’ll usually need to submit a detailed grant proposal as directed by the funding source. A grant proposal is more like writing an essay than completing a form. Furthermore, you’ll need to include a mission statement and budget proposal, along with your plan to carry out that mission. Accomplishing this requires good writing skills as well as knowledge of the proposal process.
NEED HELP? You could hire a professional grant writer. However, that would cost at least $500. Additionally, it may be worth mentioning that you can not use the winning grant funds to pay the grant writer either. Hence, we strongly encourage you to write your first grant proposal yourself. Then you could hire a grant writer just to look it over and ‘give it a polish’ instead. No matter how well-written a grant proposal, there is never any guarantee of winning a grant. If you’re interested in more of the specifics of grant writing,
When locating funding opportunities, GrantWatch.com is the leading grant search engine and database directory. Discover grants currently available, both for nonprofits as well as (for profit) small businesses You can even find grants for individuals. A MemberPlus+ subscription is required to view full grant details, including eligibility criteria and application information. For more information, visit the GrantWatch FAQ page.
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