Federal Grants Available;
Indiana Companies Need to Apply
The National Institutes of Health (NIH) distributes more than $2.2 billion in small business grant money on an annual basis. For many years, Indiana’s piece of this and the overall federal funding pie has been far too small. One reason: Hoosiers aren’t asking for a large enough slice.
Many Indiana companies apparently believe the applications for these grants are too complex and time consuming. Jo Anne Goodnight, coordinator for NIH’s major grant programs, sought to dispel this notion during the February 20 Life Sciences Lunch sponsored by the Indiana Health Industry Forum and Barnes & Thornburg. Too few Indiana organizations are applying for the federal grants, but the large number of luncheon program participants may be a sign that times are changing. The presentation was telecast to 16 locations with a total audience of 236 people.
Growth in the state’s life science industry makes these grants even more important for Indiana companies. Goodnight detailed two avenues for obtaining NIH and other federal funding – the Small Business Innovation Research (SBIR) and Small Business Technology Transfer (STTR) programs. She focused on NIH funding in her presentation from Washington, D.C., but 11 federal agencies have SBIR/STTR allocations as part of their budgets.
Both programs are aimed at meeting the NIH’s goal of improving human health. NIH stresses the wide variety of options as one reason that more companies should consider applying. Companies are encouraged to apply even if they don’t find a specific match in the list of NIH project proposals. Any research project related to improving health will be considered and the only stated criteria is “providing solutions to real problems that affect real people.”
Of further interest to Indiana companies is the vast array of application assistance available. Both NHI and the Indiana Economic Development Corporation (IEDC) have programs specifically designed to help with this process. The IEDC will also provide matching funds to SBIR/STTR grant recipients. For its part, the NIH encourages applicants to communicate with them frequently throughout the process. Businesses can directly inquire about current NIH projects and receive help in matching their company with appropriate funding requests.
Companies eligible to apply are organized for-profit businesses with 500 or fewer employees. The business must also be 51% U.S. owned by individuals and independently operated with the company principle or chief executive primarily employed by the small business concern. The majority of small businesses meet and exceed these basic requirements.
Basics of SBIR and STTR
Both funds represent money set aside from the NIH external budget to support research and development that has the potential for commercialization. SBIR is the larger of the two and accounts for 2.5% of the NIH budget, while STTR weighs in at .3%. The SBIR directly funds projects, while the STTR facilitates research and development cooperation between small businesses and U.S. research institutions.
Money is distributed from both funds in one of two phases. Phase one distributions are limited to $100,000 and usually designated for feasibility studies. Slightly more than 19% of applicants are successful in their bid for phase one funding for both SBIR and STTR. Phase two success rates improve to 41% for SBIR and 26% for STTR, but only companies that received phase one funding are considered.
The funding in phase two is intended to fully fund research and development and the maximum increases to $750,000 over two years. There is a third phase described as the commercialization stage but no SBIR/STTR funds are distributed. The importance of this phase comes in recognizing it as the ultimate goal and planning for its funding during the phase one and two applications.
The money is there. Indiana companies should be encouraged by their prospects of sharing in the multi-billion dollar federal funding pool. Increasing competitiveness for these grants will benefit all Indiana industries, including the life sciences.
