Grants or funding from organizations in order to foster economic development can be a very positive way to increase the economic climate in a local community and, in most cases, I am in full support of them. However, in order for a community to make any outside funding successful for them, one of the things a community must first do is assess the market potential for the program.
When a marketer is considering introducing a new product or service, one of the first questions he or she will address is, “Is the current landscape one that can support this product or service and make it profitable?” There are a wide variety of factors in making this decision including:
- Size of the target market for the product or service.
- The needs of the target market.
- The ability of the target market to purchase the product at a price/frequency that will be profitable to the marketer.
- The competitive landscape.
Similarly, when a community is looking at the potential of accepting grant funds that, in turn, require the community to start a new initiative, they should also be looking at these factors and determining if accepting the funds is the best thing for the community.
A national organization is offering a community a $10,000 first year grant and $1,000 each year thereafter to begin a new young adult program to facilitate youth community involvement. In order to accept the funds, the community has to form an organization under the grantee’s name and must agree to follow the mission, all the guidelines and all the bylaws outlined by the grantee. With this example in mind, let’s go through some of the assessments above:
- Size of target market – There seems to be enough youth in the community to justify a program for youth involvement.
- The needs of the target market – The high schools in the area offer in school and after school activities open to all of the young adults in the area. Local churches in the area each have their own youth groups and these youth groups do a lot of community service with the youth they serve. The community also has an active community foundation and they run a wide variety of youth involvement programs. This is our first red flag and leads us to question: Do the youth of the community need another option? Is the lack of involvement from the youth that aren’t involved because their involvement need isn’t being met? Or is to because of another reason?
- The ability of the youth to be involved – The young adults of this generation have more homework, usually participate in one or more after-school activities year-round, and, because of having two working parents, are shouldering more responsibilities at home. In addition, the current young adult groups in the community report that they have a hard time getting the young adults to show up on a consistent basis due to their other obligations. This is our second red flag and leads us to question: Do the youth of the community have time to participate in another group? Do they even have time to become more involved in their community? Are they already sufficiently involved in their community?
- Competition – As mentioned in the above assessment of needs, there are a wide variety of community involvement groups already in the community. Also, as already mentioned, the current community groups are struggling to maintain reasonable membership numbers because of the current commitments of the youth. In addition, each of the groups currently established have similar agreements with their grantees that make it difficult for them to work together or merge because each has to maintain the identity and follow the guidelines of their grantees. This is our third red flag: There is tough competition for youth involvement and another organization may either fail completely or further reduce the size of the other groups aimed at the same goal (since merging is not an option).
With the above information, should the community accept the grant funding? My recommendation would be no, unless they could use the funds towards one of the groups that already exists. Yes, the money is attractive, but in the long run, if the goal is to increase youth involvement, adding one more group may not be the solution and will probably hurt the community’s overall effort to increase youth involvement.
Obviously the above example is a bit of an extreme. And, again, most of the time, I support the use of grant funds to develop a community. But, the above is a good example using the marketing practice of assessing the current marketing landscape prior to launching a new product or service and applying similar criteria before accepting grand funds so that the community can focus only on grant funding that will create a positive long-term impact.