Grant Funding Opportunities for Native American Businesses
If you are a Native American and need funding to start or grow a business, you are undoubtedly wondering what small business grant funding programs are available. So, are there grants to help you start or grow your business? The answer is — maybe. In this post, we will debunk some of the myths about grants, explain how grant programs work, and share information on some of the existing grant programs available to help Native entrepreneurs get the funding they need.
In general, grants are most often provided by federal and state government agencies, large corporations, and philanthropic foundations. Occasionally, there may be opportunities for grants through tribal programs. Let’s examine each of these in more detail.
Federal Government Grants
Infomercials and numerous articles on the Internet will tell you the Federal Government puts aside millions of dollars in form of grants to support Native American businesses. This is true, however grant funds offered by federal government agencies such as the Small Business Administration, The Minority Business Development Agency, and the Office of Native American Affairs are most often awarded to nonprofit organizations that provide training and technical assistance to help people start and grow small businesses. The IDRS Acorn Project is one such program that specifically focuses on providing training and technical assistance to Native Americans who want to start their own business. Most of the funding this program receives to deliver services come from Federal and State Government grant programs such as U.S.D.A. Rural Development the Small Business Administration.
Some government grants are available for small businesses but they are designated for very specific programs. For example:
- The Small Business Innovative Research (SBIR) Program offers grants to help small businesses perform research and development that addresses the nation’s most critical scientific and engineering needs. These needs span the technology spectrum – from aviation and agriculture to medicine and manufacturing.
- The SBA manages the 7(j) Management and Technical Assistance Services Program which provides a grant to existing small businesses that can provide management and technical assistance services to other small businesses.
- The U.S.D.A. provides grants to help farmers develop housing for year-round and migrant or seasonal domestic farm laborers under the Farm Labor Housing
So you see, some federal programs offer grants to small businesses, but it’s not so individuals can “start” a business. The grants are given to existing small businesses that will use the funds for a very specific purpose that greatly benefits the economy or society in some way.
State/City Government Grants
Most small business grants available for regular businesses (such as retail) will come from local state or city agencies that focus on small business and economic development. One example is the Indian Equity Fund (IEF) Small Business Grant managed by the Montana Office of Tourism and Business Development. The New Mexico Regional Development Corporation (NMRDC) has two grant programs for small businesses. One is a micro-grant for individually owned businesses and the other is only for small businesses owned by a tribe.
Upon closer examination of these grant programs, you will notice the following characteristics which are common among most grant programs.
Grants are sometimes for specific types of businesses
The Indian Equity Fund for example is only open to businesses owned by a person who is a citizen of a Federal Recognized Tribe. There are some cases where a grant might only be offered to businesses in certain industries such as agriculture or aerospace.
Grants are often for very specific activities/purchases
Some grants require you to spend the money on something specific such as a piece of equipment or to send an employee through a training program. Even if the grant does not define a specific activity in the request for a proposal, you will have to clearly explain how the funds will be used when you submit your grant proposal. If your proposal states the funds will be used to purchase a pizza oven, you will be required to use the funds for that purpose and nothing else.
- The Indian Equity Fund grant can be used for things such as
Purchase of land, building and equipment
- Purchase of assets including furnishings, equipment and technology
- Selected use of working capital for business operations
- Grants are typically small
Most small business grant programs are designed to help as many businesses as possible which means the monetary amount of funds any one business can apply for will be limited. Look back at the two example grant programs. Notice under the Indian Equity Fund grant, the most a Native entrepreneur can apply for is $14,000 while under the NMRDC program the maximum amount is $2,500.
Grants often require matching funds
The Indian Equity Fund grant, for instance, requires you to match the monetary amount of grant funds you receive. If you apply for a grant for $5,000 to purchase a bull-dozer, then you will have to have $5,000 of your own money to put toward that purchase (and yes you will probably have to prove that you have the $5,000 and that you actually used it to purchase the piece of equipment).
Grants are primarily awarded to existing businesses
If you look at small businesses who have previously been awarded grants, you will notice the majority of them were already in operation, even if the business was still considered to be in the startup phase which is the first five years. Funders of these programs want to ensure grant funds are being used in way that maximizes the impact – in other words, they want to get the most bang for their buck. They know, this is more likely to happen when funds are given to a business that has already been started and operating at some level of sufficiency.
Grants are Sometimes Non-Monetary
Some grant programs provide services instead of actual funds. One such program is one provided by Los Alamos and Sandia National Laboratories called the New Mexico Small Business Assistance Program. Recipients of this grant receives technical assistance in the form of research hours and not cash. Another example is a program that was offered by the Cherokee Nation Small Business Assistance Center were grants were provided to help Cherokee-owned businesses with professional services such as website development, marketing and the services of a CPA to help them set up QuickBooks software.
Corporate Grant Programs
There are also cases where private businesses will provide grants as a way to increase awareness about their products and services or support a specific cause. A great example of this is the grant competition offered by Federal Express.
The company is obviously using this as a platform for increasing awareness about its services which is evident in the requirement for contestants to get public votes as part of the scoring criteria.
On occasion, a tribe might provide some type of financial assistance to its citizens. The Tolowa Dee-ni’ Nation provides up to $1,000 per year to its citizens which can be used for educational purposes or to help develop a small business.
The final word on small business grants
Applying for a grant is a competitive process where many small businesses will apply, but only a few will receive an award. Grant-awarding organizations require various pieces of information, but you should plan to include a cover letter, table of contents, executive summary, statement of need, project description, goals/objectives, methods/timelines and staffing. You must be able to write a grant proposal that displays your passion for your organization, and lists the ways your business will benefit your community with the grant money. It is imperative that you carefully read each grant application and follow the instructions very carefully.
While small business grants can be small and hard to find, any free funds or in-kind services you can receive will be helpful to grow your business.
The best place to start looking is within your own tribe. You might start with your tribe’s economic development department and talk with your tribal council to see if there are any other programs within the tribe that might be available. Next, see what programs are offered through your city or state economic development agency.
There are a few other national grant programs offered by private corporations and foundations. A list of know all known ongoing grant programs specifically for small businesses can be found on the IDRS Acorn Project website at https://www.nativebiz.org/grants. We post information about special grant opportunities on our facebook page. Please follow our page to make sure you don’t miss any announcements.