Many energy communities rely heavily on grants to support their activities — particularly for energy solidarity measures. While diversifying funding was a key aim for all CEES Partners, they offer insights on the pro and cons of grants.
A key benefit of grants (as opposed to other financing mechanisms covered in the Energy Solidarity Toolkit), is that they do not require financial repayment. They are a type of ‘investment’ that is repaid through the generation of impactful outcomes that align with specific objectives of the public authority, foundation, corporation or organisation offering the grant. In contrast to donations, which are often unrestricted and collected in flexible ways, grants are generally purpose-specific and competitive, with strict conditions and reporting requirements.
To secure grant funding, ECs need to demonstrate their capacity to create impactful and cost-effective projects.
Grant financing can be especially vital for small ECs when aiming to launch a project with a high social impact – such as energy solidarity measures – that could negatively influence their bottom line. As noted elsewhere, as ECs typically aim to have relatively low profit margins, it can be difficult to cover the costs and staff time needed for activities that serve the community.
Successfully securing grants hinges on finding a balance across three critical elements:
- application and reporting requirements/efforts of the grant;
- the impacts that the EC will be able to deliver with the support (to what extent does what the EC wants to achieve align with the grants’ purpose or specific topic); and
- the appropriate level of funding available through of the grant.
Warning: Application processes can be a heavy burden
ECs, especially those with a small staff and limited resources, need to be aware that applying for grants can be time-consuming and onerous. It is not unusual, for example, for a team of 8-10 people to dedicate substantial time over 2-3 months when developing proposals for EU grants. Once an EU grant is awarded, substantial staff time will need to be dedicated to management and reporting procedures.
ECs need to consider several important aspects when preparing for competitive grant funding:
- Investigate available grant funding opportunities, considering both governmental and non governmental sources, to identify which are appropriate to the aims and goals of a given energy solidarity project. Review carefully all criteria for eligibility.
- When preparing an application, clearly define the goals, objectives and scope of the energy solidarity project. Identify the target beneficiaries and the anticipated social impacts.
It is important to identify grants that offer the best potential return on time invested and do not create risks later. Understanding what is required at each stage – from application through project execution (once a grant is awarded) and in reporting to secure final payments. The following questions can help ECs determine which grants to prioritise – and which may not be worth the trouble. Typically, grant applications require detailed information on the project plan, anticipated deliverables and outcomes, and cost estimates to justify the requested budget. Many also require supporting documents such as recent tax returns, proof of legal status, and letters of support (among others).
Once a grant is awarded, the REAL work begins. At this point, the EC will need to appropriately staff the various roles and procure other resources to carry out activities and ultimately deliver all aspects of the project. Most grants require some level of monitoring and evaluation along with reports that trigger the release of the final funds.
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