Avoiding the Grant trap

Summary: Money matters but not for money’s sake – do not fall into a grant trap

Fund raising often becomes a central issue in regeneration: not only because many severe problems cost money to alleviate, but also, in a longer term, to "release endogenous resources" – i.e. to find currently unused potential among the stakeholders, costs effort and money. Yet the issue is not just where and how to find the money – it is how to make sure that searching for money does not take too much effort and that funds raised can be employed effectively.

It is important to remember that there is no free lunch. Asking for grants almost always requires readiness for a compromise.

• Fund raising is a time-consuming effort, and in case of additional funding from external (e.g. international) sources requiring special expertise that is itself expensive to commission. It may save a lot of time and money adopting a sound approach to fund raising. The effort to get more money may be more effectively spent actually doing something in the field!
   
• Going for any available funding may result in getting funds for something that you do not really need to do. (Especially funding that seems easy to get) This may become worse than getting no additional funding at all as you will have to spend your time on carrying out something that does not really help. Therefore, it pays to take time to consider your needs seriously; having said that, funding institutions often have criteria, rules and constraints that make it difficult to fit the particular real life priorities of a neighbourhood into an eligible frame. Making concessions to the eligibility rules pays as long as the key issues and targets of the activity you want funded do not shift;
   
• When funding is allocated to the neighbourhood without clear strategy and measurable objectives it may create additional or voluntary activities that improve the picture and gives hope for improvement but do not really trigger any fundamental changes; furthermore, these activities may cease when funding is terminated.

The real challenge is not to raise the funds but to make sure that funding flowing in the area develops additional capacities and that the effect produced by this funding does not dissipate. You have to anchor the "enabled" stakeholders in the neighbourhood, otherwise they tend to leave the deprived neighbourhoods as soon as their situation improves, and your investment leaves with them. That may mean creating jobs for the unemployed, improving conditions for small businesses, and upgrading housing. However, identification with the place and emotional attachment is no less important than issues of material well being

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