Is there a thing, such as “too much” grant money?
Just recently, I stumbled across a link on my LinkedIn wall, where the start of a new business was being advertised – a business that’s sole purpose is to advise other companies on how to access grant money in in Africa. The business is called Africa Grant Advisors and can be found here.
At first I thought that such a business is a great idea, as it supports others and can act as a multiplier for the realisation of projects, as it supports access to grant money. But this was a thought of the first second. With more time to think about it, I realised there is something wrong about this, and I am going to explain why I believe so.
When a business person decides that there is enough potential to start a new venture which income is purely generated by advice sold to other businesses to access grant money, this shows a number of things:
- There are enough companies in the market that would like to access the grant money
- There is a big gap between the grants available and the companies that may need it
- There is surplus of grant money that does not reach the desired target group
If these three factors were not given, setting up an advisory on grant access would not make sense.
I believe the focus here is wrong though! The advice on how to access grants does not solve the actual problem, which is that the grants issued from donor organisations are:
- too specific, so that a lot of projects / companies do not fulfill the criteria to access it
- have too high formal requirements for companies to access it and thus companies do not even apply for it
- have a too complex application process, so that companies do not find the resources to apply for it
- are too small, so that the effort in accessing it is too high compared to the return
- or are too large, so that the projects where it could be applicable do not add up to the required volume
In my believe, the advice on grant money certainly supports businesses in getting more grants secured and thus realising more projects.
However, I think the problem needs to be addressed one step before that, which is at the level of the grant issuing bodies. They certainly have to gain a better understanding of the market, the projects and their typical parameters and constraints in order to provide better matching grants in the future. Also they need to understand, that when running a business, there are sometimes higher priorities then filling out application forms – for example to realize a project, based on a real business case without any grant money.
Whether there is such a thing as “too much” grant money? I don’t know. But I certainly know that there seems to be a gap between the grants available and the supposed recipients. The proof for this to me is that a business can thrive entirely on closing this gap.
What are your thoughts on this? Do you believe there is too much grant money available in developing countries? And if so, why do you believe this? Or should there be even more grants made available? Let me know in the comment section below.