I would like to add a new element to the discussion.
We’d like to hear your thoughts and questions on how business plans and grant proposals differ, and what social enterprises should be thinking about when writing business plans, both for themselves and for social investors.
One area I’ll flag up as something I’ve heard from several social investors:
Language matters. Some social investors coming from a finance background (as is the case with investors seeking financial returns, and with many venture philanthropists) might be unfamiliar and even uncomfortable with traditional development language. Social impacts are important, but social investors also want to hear about opportunity, strategy, and realistic assessment of risk.
However, a business plan cannot be a simple re-write of a traditional grant proposal. The fundamental difference is that business plans – whether they’re for a non-profit or a commercial company – look several years into the future, and take into account the overall organizational strategy, opportunity, competition, risks, proof the organization can seize upon that opportunity, and expected returns (social and financial, to investors and others).
I’d be very interested to hear additional perspectives on business plans, as well as questions from practitioners. While this may seem like a simple task, it is one that often requires a fundamental shift in mindset and organizational culture to achieve.
Thanks
Jessica.
16 Comments
Purpose and use of business plan versus grant proposal
Hi Jessica,
Maybe an obvious comment for some practitionners, the major difference between a business plan and a grant proposal is its purpose and use. From our perspective, a business plan must be a management tool for the social enterprise, used to track performance, to ensure alignment with mission & strategic objectives and annually revised while a grant proposal is tailored to funder requirements, mostly used by the applicant for external reporting purposes.
A a social investor, besides trying to assess how realistic a business plan is, we do pay attention to how it is used by the management team, built up, communicated within the organisation, owned by key staff, etc.
Anne Henricot
Executive Director
Philippson Foundation
I guess I would go to the
I guess I would go to the individual situation and the relationship, if
any, between the parties. A grant proposal (from my experience) comes
usually as the result af either an expressed need by the granting
organization, or unsolicited (not usually very productive) to a general
focus of the grantor. As an introduction to from a new and unknown
entity, I believe a business plan would be helpful. Unfortunately, in
today’s environment. One cannot depend upon being acknowledged by a
Grant organization unless you are known to them personally.
If you send an unsolicited proposal to a most granting organization,
you’ll semply get a form letter saying, “...we don’t accept unsolicited
proposals.” However, if you’ve established some relationship, a
business plan can be very helpful creating a dialog. However, it all
depends upon the protocols of the grantor.
In fact the Business Plan and the Grant Proposal have different purposes
but have similar information. Basically, in the simplest of terms…it
answers the questions: Who are you and what have you done? What do you
plan to do? If I give you this money, how will you spend it and what
will be the outcome?
Jerry
——- Original message ——-
From: seepnetwork”
Hi Jessica, I agree with
Hi Jessica,
I agree with Anne as that is exactly what I have to do. Our business plan keeps us in line with our mission as an organization and one of our biggest challenges is when we have to write up for a grant proposal that doesn’t fit entirely within our mission.
As a project implementer one of my main challenges is to make sure that the project don’t take away from the Foundations mission and if it differs its my job to bring it in perspective by the end.
James Bell
General Manager/Project Coordination
Area Youth Foundation
Thanks for clearing this
Thanks for clearing this out, I am sure a lot of people make confusions on business plans and grant proposals, I know I did. That would explain why I always have a Trianz business consultant next to me.
First of all, most
First of all, most Foundations have no idea what should be in a grant
proposal … talk about arbitrary and vague, if you doubt me, review a
half dozen or so grant submission guidelines. A business plan is a more
useful document. Although many are somewhat arbitrary, it still
requires specificity and some actual accomplishments on the part of the
supplicant. We would all (especially the poor) be better served if The
Business Plan and NOT the Grant Proposal were a requirement since the
plan attempts to show what value will accrue and there are, at least,
some measures that can be applied to the outcomes … as in “profit.”
The pro forma financials required in a business plan provide the
knowledgeable reader with a sense of potential and an objective method
to measure performance. Since there are no standardized accepted means
for an NGO to demonstrate actual performance in terms of social value,
(with the excepetion of Community Analytics) subjective and arbitrary
means are most often applied. The abject failure of the global anti
poverty effort is more a failure of the funding agencies to effectively
specify outcomes. It is also a result of the nepotistic “old buddy,”
network and the swinging door between funders and the funded. This
question exemplifies the depth of the problem.
The first question often asked in grant review meetings is not … what
value will this proposal bring, but “who do we know in the NGO?”
This should stir some response.
Jerry
——- Original message ——-
From: communities@seepnetwork.org
To: jeromepeloquin@fastmail.fm
Date: Thu, 22 Oct 2009 21:45:59 +0000
Subject: Comment for Discussion: What’s the difference between business
plans and grant proposals?
Difference between Grant proposal and Business proposal
The difference between grant proposal and a business proposal starts from our psychological perception of the two, some people see business proposal as an avenue to trade values for mutual cooperation while grant proposal is seen as an instrument of soliciting for support. Whether this is right or wrong is subject to debate, however, this has formed the basis on which some people approach grant and business proposals, respectively.
You may choose to believe or not, grant proposal is like a less privileged brother asking a well to do brother to lend some help and be sure that his help will be well utilized. While the well to do brother is saying prove to me in black and white how you will utilize my support before I give it to you.
On the other hand a business proposal involves two parties bringing values to the table, on the same footing for consideration. None is at the mercy of the other.
George Oboli
Lagos, Nigeria
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Georeve Comunications is an organisation formed by social enterpreneurs in Nigeria (Africa) to provide management services to NGO’s aand charity organisations.
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George Oboli
Business Plan
Nyabinda Naman O.
Hi Team,
-Business plan is a sequential arrangement giving a clear layout how the business is intended to be conducted, run and the time frame of all the activities to be carried out.
In most of our programs, business plan forms the basis of action plan that guides the operation within the time frame allocated. The description above is my own version but they are subject to challenge or correction.
Thanks
Naman Nyabinda
AMPATH-Kenya
Difference between Grant proposal and Business proposal
Nyabinda Naman O.
Hi Team,
The difference between the two is the same, but it depends on the perspective you are looking at it.
-Grant Proposal in my view is a well structured, written document seeking to ask or requesting for a non refundable resource(s) towards a needy (organization or individual) to enable her or him fixed demand. While;
-Business Proposal is a written document showing details of the kind of business an individual or organization has an intention of starting. The document in itself can be used to source for fund i.e. it’s a tool for sourcing funds. The description above is my own version but they are subject to challenge or correction.
Thanks
Naman Nyabinda
AMPATH-Kenya.
It seems clear from these
It seems clear from these responses that respondents have little
knowledge of neitiher a Business Plan, nor a Grant Proposal.
Jerry
——- Original message ——-
From: communities@seepnetwork.org
To: jeromepeloquin@fastmail.fm
Date: Sat, 24 Oct 2009 21:51:04 +0000
Subject: Comment for Discussion: What’s the difference between business
plans and grant proposals?
It seems clear from these
It seems clear from these responses that respondents have little
knowledge of neitiher a Business Plan, nor a Grant Proposal.
Jerry
——- Original message ——-
From: communities@seepnetwork.org
To: jeromepeloquin@fastmail.fm
Date: Sat, 24 Oct 2009 21:51:04 +0000
Subject: Comment for Discussion: What’s the difference between business
plans and grant proposals?
Difference between Grant proposal and Business Proposal
Hello Team
It is good to be back with a lively forum. The definition given by Nyabinda is the basic classification and correctly emphasizes on perspective. However, the evolving nature of purely business, social enterprise and non-profit that have now integrated in more ways than ever before necessitates for clear articulation.
In my view any proposal whether grant or business has to follow a structure that delineates the goals, objectives, modalities and end-line product. While in the non-profit sector the product may not always be visible or can be calculated in terms of cost-benefit analysis and that is where a grant may differ from business proposal trying to match the product with the cost. But grants do not always fall into the category of non-refundable assistance. The calculation is made differently – the grant given needs to show desired result and that is the product.
The business proposal on the other hand can be profit making, social enterprise and can also include non-profit. Because in all these sectors there is an end-line deliverablse be it a manufactured item, cultivated produce, capacity building and providing captial for SME. As more integrated approaches of human and community development augments and the involvement of corporate sector through CSR enhances there will be greater amalgamation between grants proposal and business plan. At the end of the day both the document seek financial or in kind assistance and support.
Thanks and regards.
Habiba Tasneem
Institute of Hazrat Mohammad (SAW)
Dhaka, Bangladesh
The business plans are the
The business plans are the things we plan for the future and grant proposals are those which are ready fo the business action to take place.
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In my own view any proposal whether grant or business has to follow a structure that delineates the goals, objectives, modalities and end-line product…
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