This is part 3 of the Aidpreneur.com training on finding opportunities for RFAs, RFPs and RFQs.
Once you determine the geographic scope within which you or the company you work for will do business, your next step is to determine the type of funding you will pursue. When considering RFAs, RFPs and RFQs, there are essentially two categories: grants and tenders (or contracts), each of which have their own unique features.
As a reminder, because this particular training is focused on finding opportunities related to RFAs, RFPs and RFQs, I won’t be discussing other funding opportunities such as acquiring donations, using volunteers to perform your work, selling products (in the most traditional sense) or other avenues. These are discussed in other trainings here at Aidpreneur.
Let’s discuss the defining differences between grants and tenders (or contracts). At its most basic, a grant is a charge of funding that is provided to you or your company with the expectation that you will perform your best effort to complete the work. While grants regularly have milestones that needed to be achieved, there are no specific units of delivery that are required. To recap: grants are sums of money that are given to you or your organization to make your best effort to complete the work you’ve proposed.
In contrast, a tender (or contract) is a vehicle used to ensure that you or your company provides very specific deliverables to your client before they will compensate you for the work. And if you do not complete or deliver exactly what is outlined in your contract, the client is not under any obligation to pay your invoices.
Traditionally, grants are pursued by, and awarded to, not-for-profit organizations or charities, and individuals and contracts are the domain of for-profit companies. As you consider what type of funding you want to pursue, or if you wish to pursue a mix of both types of funding, there are two key criteria you should consider: how will you use the funds? and what are your reporting requirements?
With a grant, as I mentioned earlier, the client has the expectation that you will perform the work you’ve proposed at your best level of effort. As such, grants are often used for capacity building work, community development work, peace building and other pursuits that seek behavioral change. Because the results of this type of work are difficult to measure, grants are an appropriate vehicle; effecting societal change takes time, and bills have to be paid along the way.
In contrast, with the contract or tender, funds are usually earmarked for a specific deliverable such as physical goods, or specific technical assistance, such as research or evaluation activities. In these cases a contract is appropriate because the client needs to be able to determine if they’ve received exactly what was needed for their project or program.
In both cases, understanding reporting requirements is essential. In general, grants require regular reports on the progress of your project or program at set times, such as monthly or quarterly. With contracts, reporting is generally more limited because you are being judged against your ability to provide specific deliverables.
As I mentioned earlier, both types of funding can be pursued by any individual or organizational type; for example International Solutions Group is a for-profit company, but we have received both grants and contracts from our clients. In fact, one of the company’s largest programs was a grant from the United States State Department. Ironically, we implemented that program at the same time we implemented another of our largest projects, which was a contract from the United Nations Development Program. Implementing large contracts and grants side-by-side provided ISG with a good opportunity to contrast the two funding vehicles. We explore the management of these two types of agreements in our trainings on project management.
Beyond the reporting and delivery considerations associated with grants and contracts, a final, and perhaps most important criterion, is the availability of opportunities. Because you have already determined what your geographic scope will be, you can use this as a lever to determine how many opportunities are available in the geographic region you’ve chosen. If you are considering delivering services or products exclusively to a local market, you might determine that there are many more contracting opportunities than there are grant opportunities. It’s been my experience that as you move from the local to the international in terms of scope the availability of contracts versus grants achieve some balance, but ultimately, contracts are more plentiful.
As with your geographic scope, once you determine what type of funding vehicles you will pursue, write that down (preferably in the same place you written down what your geographic scope is). By writing down these decisions, you’re building a document you can easily reference when considering opportunities – which is a critical when determining whether or not you will pursue an opportunity.
After you have determined your geographic scope and the types of funding you will pursue, your next step is to identify the sources of those opportunities. This is the topic of the next section in this training. Thank you for participating in this training on finding opportunities for RFAs, RFPs and RFQs. If you have any questions at all, please email us at training@Aidpreneur.com.