Advice on starting a microgrant program
April 23, 2019
I ran a personal microgrant program called Helium Grants for two years. After reading ~4,000 applications and awarding nearly $40,000 in grants to 26 people, I’ve decided to put it on indefinite hiatus and focus on other projects.
Since starting Helium, I’ve gotten questions about how to start a microgrant program, so I figured I’d capture my learnings in one place. Some of this advice overlaps with previous posts I’ve written; this one is my best attempt at a cheat sheet.
I’ve split this post into two sections: managing logistics (all the boring but necessary stuff) and designing for impact (lessons learned to make an exceptional program).
The brass tacks of managing a microgrant program with minimal overhead.
Easiest way to manage applications is to use a Google Form. Set character limits for the text fields. People will want to send you attachments, emails, videos, etc. Be firm about only receiving applications via form, it will make your life easier.
Use a separate email address. Be explicit about only responding to email sent to that address, it will help you maintain your sanity. People will send you personal emails, or try to contact you through other means. It’s not on you to respond.
This is maybe the most common question I’ve gotten, and unfortunately I don’t have a helpful answer. The only thing I did to “advertise” is tweeting about it occasionally from my personal account. I also added a mailing list to the website, which accumulated a few thousand subscribers. I emailed that list occasionally: usually when applications opened, and when grants were awarded. I didn’t track how applicants find Helium, but that’d be an easy question to add to the application.
I probably should have been more deliberate about this aspect, but I personally enjoyed having this level of deliberate inefficiency in the process. Going out and soliciting applicants (or even gathering data on where they came from) seemed like work to me, and I only wanted to do Helium if it felt like fun. I guess my only advice here is not to overthink it: you might be pleasantly surprised by the applications you receive.
I eventually went with application cycles that are accepted on a rolling basis, with grants awarded at the end of each quarter. That meant I could let applications passively accumulate and not think about Helium until the last week of each quarter. Of course, a lot of things tend to happen at the end of quarters, so maybe use different deadlines (ex. once every four months). I’m not high-confidence that this was the best way to manage applications, but it worked okay for me. My general goal was to try to “batch” the work involved so I wouldn’t have to think about Helium all the time.
Turns out, other people want to give microgrants, too! I liked that Helium could be a service of sorts to other individuals who wanted to learn about personal grantmaking, but didn’t want to spin up their own program.
Most of the grants awarded didn’t come from my personal money, but from other sponsors. It was win-win all around: there were more grants available, I had more money to work with, and sponsors got an easy way to learn about grantmaking. I didn’t solicit sponsors: I just advertised that others could sponsor Helium Grants on the website, and I guess that’s how people found it. If you’re feeling ambitious, I bet you could get many more sponsorships (monetary and in-kind) by talking to both individuals and companies that are relevant to your grantmaking space.
Ask sponsors to transfer money to you before sharing applications, which demonstrates commitment. I let sponsors decide whether they wanted to choose the grantee, or have me choose (it was about 50/50). I used to give sponsors the full list of applicants, but in the last cycle, I shared a list of 15-20 finalists to choose from, which ensured that our decisions were more closely aligned and reflected a more coherent perspective. The sponsors seemed fine with it, and I liked this approach better.
PayPal, Venmo, and TransferWise made this easy, although if I grew the number of grantees per cycle, I’d probably have to come up with a different plan. There were a few outliers where I had to do something else, but in those cases the grantees knew what they needed, so I didn’t have to do any extra research. Note that some of these services have daily or weekly transfer limits, so plan accordingly.
Taxes and legal
I managed to run Helium without forming a legal entity, and grants are personal gifts, which meant I had to do zero paperwork. However, this is also because the total amount of money I processed was relatively small. If you’re giving away larger grants, or doing this as a corporate program, pay attention to the gift tax (if you’re in the United States), etc. I’m neither a lawyer nor an accountant, so do your own research, but speaking solely from my own experience, it is possible to run these programs at smaller scales as a personal project.
Designing for impact
These are all common challenges that I both experienced and have seen in other microgrant programs.
Don’t just give away money.
This is probably the most common mistake and the most common misconception about grant programs, and I’m no exception, as I learned it the hard way. Treat grantmaking as an investment, not a giveaway. Philanthropy is no different from traditional investing: you can be “dumb money” who just writes a check, or you can find ways to add value beyond dollars.
I think companies are especially susceptible to this behavior. They might start a grant program because they have extra money to play with, but then don’t really follow up with grantees or do anything special. Eventually, they get bored and kill the program. A number of applicants wrote that the validation mattered more to them than the money. Returns are measured by social capital: if a grantee does something admirable or interesting in the world, they make you look good.
Think of grantees as a portfolio.
Evaluate applications not just based on individual merit, but by the story you want to tell about the grant program more generally. This is not just for your benefit, but for the grantees’. They, too, want to be able to say, “I got this grant” and have that mean something. Think of it as creating a portfolio, both in terms of building an overall “brand”, but also in terms of creating a cohort. Grantees want to get to know other grantees. If they’re doing similar things, or are similar types of people, they can support each others’ work, which creates additional value beyond your initial grant.
Be specific about what you’d like to fund.
At first, I tried to make Helium super generalized: “no-strings-attached grants for whatever you want”. While it’s exciting to go broad, the lack of criteria makes it harder to choose applicants. It’s also harder for applicants to know if your program is the right fit. Over time, I developed a clearer point of view, so I tried to adjust my criteria accordingly. I’d recommend trying to develop that point of view early on to avoid changing things around, which gets confusing for applicants.
Don’t be too specific about what you’d like to fund.
Be specific about your grantmaking areas, but don’t get too specific about your ideal applicant criteria. If you say you’re looking for a “motivated self-starter”, people will tailor their applications to look like motivated self-starters, but what you’re really looking for are exceptional candidates whose abilities are evident by reading between the lines.
Try to get applicants to open up about themselves in a more freeform way. For example, I prefer asking “What are you most proud of?” over “What is your most significant accomplishment?”. The former tells you how the candidate thinks; the latter means they’re more likely to tell you something that they think others will find impressive. Similarly, I asked people to “share 1-3 links about themselves” instead of being explicit about which types of links. It turns out that different people interpret that question very differently.
Running a microgrant program is both easy and hard
If this all sounds like a lot of work, it is. Sort of. While managing the program itself didn’t require a lot of hours, it felt like a lot of responsibility, which translated into mental overhead. And as I learned more about how to design grant programs, I always felt there was more I could or should do with it that I wasn’t doing.
Hopefully, sharing some of these learnings will help you get started faster and avoid some of the mistakes I made. I still maintain a list of other microgrant programs, which includes a few templates to get you started. If you decide to start your own microgrant program, let me know and I’ll add yours to the list. Happy grantmaking!