Helen E. Quick
It is not news that capital (both debt and equity) has become more difficult to obtain in the past several years, even for companies in the healthcare industry that many tout as "recession-proof." However, during this period of capital constraint, one source of capital has grown exponentially: government grants.
The American Recovery and Reinvestment Act (ARRA) enacted in January 2009 and the Patient Protection and Affordable Care Act enacted in March 2010 outline several grant programs and initiatives that include direct grants from federal agencies and "flow-through" grants from states and local governments. These grant opportunities not only include grants for traditional recipients such as colleges, universities, and hospitals, but also include opportunities for healthcare businesses-such as home health agencies, long-term care facilities, physician practices, and other providers-that have not traditionally participated in the grant marketplace. The Affordable Care Act even includes a grant program for small-business employers both in and outside of the healthcare industry that are interested in providing wellness programs for their employees. The federal government has combined all of these opportunities onto a comprehensive website (www.grants.gov) where potential applicants can click their way through step-by-step instructions that help them access several possible opportunities for grant money.
Although the opportunities are plentiful and the applications for these programs appear straightforward, submitting a successful grant application is by no means easy, nor are there any assurances that qualified applicants will be awarded any grant money.
Just Like Making a PBJ
Steve Harrington, chair of the Grants Office at the law firm Nelson Mullins, and one of only 250 grant professionals in the nation to have attained the Grant Professional Certification from the Grant Professional Certification Institute, likens the grant application process to a particular tried-and-true junior high school exercise.
In this exercise, the teacher asks each student to write instructions on how to make a peanut butter and jelly sandwich. The teacher then takes each submission and, in front of the class, follows each student's submissions to the letter in various attempts to create a delicious PBJ. If the student's instructions state "Put the peanut butter on the bread," the teacher simply takes the jar of peanut butter and puts it on the bread. If a more astute student actually instructs to "spread the peanut butter on one side of the bread," the teacher actually opens the jar of peanut butter, but without further instructions regarding a knife or other kitchen tool, the teacher is left to use his or her hands to attempt to spread the peanut butter on the bread. Along with much laughter and cleaning up of a sticky gooey mess, this exercise demonstrates that even the simplest questions can include traps for the unwary if not approached thoughtfully and methodically. Grant applications present a similar challenge.
Key Steps to Accessing Grants
Grant applications can be long and time consuming, and they require planning and organization to achieve results. Often, companies new to the grant-writing process will hire an expert to assist in the process, with options including paying a flat fee for detailed guidance to get started, or paying a monthly retainer to continuously identify opportunities and submit application after application. But whether or not your organization has hired a grants professional, it is important that you be aware of all the steps required to take full advantage of appropriate grant opportunities.
Develop a plan. The first step should be to complete a needs assessment and master plan. This plan should include a review of the organization's overall funding needs and "wish list" for the near term.
Identify opportunities. Next, you should work to match those needs with potential grant opportunities and to position your company to successfully compete for those opportunities. This "matching" process should include an ongoing review of grants offered by state or federal agencies and active communication with these agencies as to possible future opportunities not yet published.
Consider whether a partnership is warranted. Many grants require that the grant applicant demonstrate a broad array of qualifications that may be beyond the healthcare organization's reach. In these instances, a partnering strategy with another organization that fills in some of the gaps in skill sets and qualifications not provided by your organization may be the most successful approach. These partnering relationships should be treated like any joint venture, with written agreements, and forethought and planning as to how to handle a myriad of contingencies.
In these instances, a partnering strategy with another organization that fills in some of the gaps in skill sets and qualifications not provided by your organization may be the most successful approach.
Complete the application. The process of answering each question in the application then begins. Bearing in mind the lessons learned from the PBJ sandwich exercise, each question should be answered with specificity and in a simple manner. Generally, this means that industry jargon and undefined acronyms should be noticeably absent and all answers should be factually accurate and without exaggeration.
Last, and perhaps most important, the answers should be in complete sentences and free of typos. Far too many grant applications are tossed into the "no" pile for being sloppy or failing to run a simple spell check before submission.
A Capital Source Not to Be Ignored
Remember, despite all the hurdles that must be overcome and the resources required to slog through the grants process, if your grant is awarded and the money received, there is no arguing that it is probably the cheapest source of capital available. And the sampling of the grants currently available under ARRA and the Affordable Care Act may be one of the most plentiful capital sources available today. There may be no better time than now to work on your grant application skills.
Helen E. Quick is a partner, Nelson Mullins, Washington, D.C. (email@example.com) .
Steve Womack, FHFMA, CPA, is a principal, Spectrum Health Partners LLC, Franklin, Tenn. and a member of HFMA's Tennessee Chapter (firstname.lastname@example.org) .
Publication Date: Monday, November 01, 2010