Games Beyond Entertainment
One of the biggest changes in game development the past decade is the fact that games are moving into ever more markets and sectors of life.  A big part of this has been the entry of games into areas like education, health, civics, and defense.  Much of this work has been funded through grants and contracts from government and non-government organizations.  

While no one keeps perfect statistics funding on a global basis that fits this description has easily been in the hundreds of millions - mostly for research oriented outcomes.  Some of this funding is also for market-ready developments -- some of which are direct or which arise from those research oriented efforts.  

Understanding how to raise funds for development from the grants-based world is a useful element for any studio or otherwise enterprising game developer.

There are a variety of government grant programs that have been responsible for funding game development related work.  They fall into the following broad categories:

Development Grants
Outside the United States there are various programs such as the Nordic Game Fund that result in direct underwriting of games.  These grants which usually run the gamut from small funds of $50K up to $1M are usually the result of economic development set asides by local or national governments designed to spur growth in key sectors of an economy.  They often are then transferred to approved councils made up of experts and local officials who hold grant competitions and then award the funds to recipients.  Some of these funds might run more traditional incubator programs, while others are almost more akin to game development competitions.  Some are more focused on games in new markets or other innovative "blue ocean" territories even in entertainment sectors.

Research Grants
Research grants are the most commonly awarded grants for game development.  The issue however is that such grants are not structure to actually fund development outright. Instead game development is funded in the name of accomplishing the research objective.

For example, if your research objective is to see if a multiplayer game can improve learning outcomes related to economics then such a grant might allow for funding of a basic space trading multiplayer game such that it had the properties the grant applicant outlined as useful for testing to see if the such a game could achieve the out-of-game objective.

Keep in mind that research grants may not necessarily fund a game, if the case could be made that modifying an existing game is faster, less risky, and less costly that would be fine, as the goal is the answering of a research question not the funding of your amazing game idea.  Often the funding for games in the name of research is also structured to produce the minimally viable product (MVP) to support the research.  This can still be a polished, marketable game, if the funding is high enough and your approved plans require such a level of production to achieve the objective.  More and more, grant award judges understand the need for highly polished games however big or small to drive motivation and outcomes.  They also are savvier about asking whether a "full game" or any game is needed vs. off-the-shelf or moddable solutions as well.

Research grants come in many shapes and sizes and will vary from country-to-country but here is a brief run down of the ones available in the U.S. which is both unique to the U.S. but also mimic'd in abstracted fashion by other countries:

NIH Grants: The National Institute of Health is the largest funder of health focused research in the United States.  It has several grant mechanisms that it uses to fund its goals and research.  These include large multi-year grants (RO1s) which can be in the millions, and smaller multi-year grants for formative work (R34s) which offer smaller amounts of funds (perhaps $1M over a few years) but act as stepping stones to higher-end grants.  These grants are absolutely focused on non-profit institutions and research-based outcomes.  Once those parties have the funds though they may work with for-profit development partners to build the game. NIH also offers SBIR/STTR grants (see below) and smaller grants for researchers own professional development.

Other Health Agencies: NIH is but one major agency that focuses on health.  Other parts of the government also fund work including HHS (Health & Human Services) the cabinet agency that includes NIH, and the Centers for Disease Control.  Many of these grants are often smaller, and often they use an SBIR/STTR mechanism (see below).

NSF Grants: The National Science Foundation is a major funder of game-oriented work as it offers programs that are focused on discovering how to improve learning outcomes, and unlock various computer science goals such as artificial intelligence, crowdsourcing, and much more.  The majority of their grants are multi-year efforts with good-sized funding that must move through major research universities and established non-profit research labs and centers.  Once those parties have the funds though they may work with for-profit development partners to build the game.

DoD Grants: The Department of Defense is a large funder of game-based work.  It's longtime commitment to simulation and interactive-based training.  The DoD is a large byzantine organization in the U.S. and many parts of it fund game-based work in a variety of ways either through direct competitive contracts and especially through SBIR/STTR grant programs.  While a large portion of work is funded to build deployable deliverables to support DoD activities, the sheer size and needs of DoD work also sees it funding a lot of research based work into games including learning sciences (through DARPA e.g.) and health related work (often through TATRC the Army's Telemedicine and Advance Technology Research Center) that improves both battlefield and off-battlefield medical and health advancement.

Other Agencies: Governments are not small and while some agencies are more active in having research funds to disperse there are many who have funded games in some fashion.  It's important to understand that as games permeate our lives there are opportunities in many areas.  Grants for games have come from the Department of Justice (e.g. training law enforcement), Homeland Security (training TSA officers), NASA (expanding understanding of science and space), USAID (helping global development and diplomacy), NEA/NEH (Expanding support of arts & humanities by funding games), and agencies you've likely never heard of like the Institute of Museums & Library Sciences which supports a variety of programs at the nation's libraries and museums including games for learning, and public engagement.  Indeed, the government's funding of games is increasingly helping spread the diversity of what videogames can do by the diffuse nature of the areas of our lives it supports.

SBIR/STTR Grants: A critical cross-section area of government funding of games that all developers should be aware of is the SBIR/STTR program.  This is a congressionally mandated effort to make sure small businesses are included in federal spending on innovation and research.  SBIR stands for Small Business Innovation Research and STTR stands for Small Business Technology Transfer Program.  Every agency that has a certain threshold of grant-based spending must provide a portion of it through the SBIR/STTR mechanism and these grants only go primarily to for-profit small businesses.

SBIR/STTR programs are constantly generating new grant opportunities and increasingly they have specific solicitations that are open to games or even primarily request games as solutions to the challenges they're aimed toward.  While the general outline of the program is the same across all agencies that produce them each agency produces it slightly differently.  

The basic outline of these programs is as follows:

• SBIRs/STTRs are open to U.S. based businesses with fewer than 500 employees.  They don't always require an institutional/academic partner but many encourage it as the goal is to foster research and innovation developed in the U.S. into new products and services that grow the economy and solve national challenges.
• An agency will gather ideas of challenges under its domain (e.g. CDC might identify challenges related to reducing the spread of viral diseases or teen pregnancy which are two areas it focuses on.) these ideas are then turned into requests-for-proposals that are pushed out under the SBIR/STTR program.
• Developer will respond to the proposals with their ideas.  These applications include budgets, partnership outlines, and more.  Since SBIRs/STTRs also focus on commercializing technologies they often include language about paths to deployment and commercialization.
• A slate of reviewers is put together to review the submissions.  Reviewers, as with many government grant programs are peers in that field of activity and often include academics with domain knowledge and if its game-oriented practicing game developers and designers too.  These reviewers read the grants and vote on various facets of them and the best ones if they score well are potentially funded.  Acting on these scores the program managers managing the program will finalize the recipients and then proceed to a contract.
• Once a contract is complete funding commences.  However, SBIRs/STTRs are funded in stages.  Phase 1 is an exploratory/formative stage and can be a small amount of funding (e.g. $100,000) where an idea that is funded is matured through a series of formative design and research steps.  All phase 1 recipients then get a chance for follow-on funding to Phase 2.  Phase 2 is much more funding (can be over $1M) and is only open to those who were funded in Phase 1.  Requirements are harder and reviewers bear down more on the specifics developed under Phase 1.  Some SBIRs/STTRs can go to a Phase III with further funding often to support the pivot to fully deployed and commercialized product but it's rare.

It is also possible that some SBIR/STTR projects are fast-tracked and the award includes both phases under one approval process where you see Phase 1 and Phase 2 get funded under a single review mechanism.

STTR is a special version of the SBIR program that is focused on collaborations between university/non-profit labs and small businesses.  In this derivative of the SBIR program a small business submits a proposal to license a technology developed in a university lab and commercialize it further for market.  The lab gets 40% of the funding to further the work and support the transfer while the small business gets the rest.  The small business is the lead applicant and obviously the technology licensing terms between the university and the applicant must be worked out and clear.  STTR opportunities are rarer than SBIRs but are excellent ways for university programs in areas like computer science to see their work make it into games and game technologies.

For all developers in the United States interested in the best pathway to funds for their work the SBIR/STTR program is their best bet.  Read more about this program and fund offers at www.sbir.gov.

NOTE: Many states like Maine have small innovation grants of their own.  Often under $50K in size these programs are used by states to encourage their native small businesses to do the very early work to go after high-end federal SBIR/STTR programs.  These small grants often come with classes and other meeting structures that can assist you in preparing an SBIR/STTR application.  The federal government also runs such programs as well.

Foundation Grants
Governments aren't the only grant making body though in almost all respects it is indeed the largest.  Public and private foundations like Robert Wood Johnson Foundation (which funds Games for Health Project, and Health Games Research) or MacArthur Foundation (which co-funds Institute of Play's/EA's Glass Lab project and other game-based educational work) are just two of several dozen foundations that have funded game-based work to improve areas like education, health, healthcare, and more.

Foundation grants are not too different from government grants except they can be a mix of open-invitation call for proposals and private invitations to submit ideas.  Program managers at these foundations act like scouts, developing relationships and ideas for program investment areas.  Sometimes they are the decider, other times they put together advisory boards.  Often such decisions then have to flow upstream at a foundation all the way to the board of directors which then hosts periodic votes on program manager presentations.

Foundations of this sort come in all shapes and sizes and can also include corporate foundations that provide grants to pursue basic ideas of philanthropy often in-line with the core mission of the company.  For example, AMD Foundation has been a key funder of game-based programs that involve getting youth more involved in programming and building games.

It is difficult to target foundations with unsolicited proposals.  Many, in-fact don't accept them.  The best way to find grant-based funding from this cluster of grant givers is to study their sites and identify their submission processes, often waiting for RFPs they may produce and then actively submitting to those programs.  While many foundations must fund non-profits to maintain their tax-exempt status some of the largest will provide some funds to for-profits once in a blue-moon.

Government Contracts
Grants are funds that are approved as a grant process often with the goal of research or spurring development where it doesn't exist.  They are research and economic/social development tools.  They are the primary means by which governments will fund game development but they are not the only means.  The other process that governments are involved with game development and technologies is through direct contracting.

A direct contract is a purchase of a game because it accomplishes a need that a government agency may have.  For example, if the Department of Transportation needs to train some portion of its inspection force they may decide that a game might be the best way to do that.  They would internally build the case for this, gather data, and once convinced this might be the best means of training inspectors they would post an Request for Proposal (RFP) perhaps preceded by a Request for Information (RFI) which is more of a light background check vs. a full proposal that is evaluated.  The judging isn't too different from a research grant except it may not involve outside experts evaluating the proposals.

A contract, once awarded, binds you to the deliverable, a schedule, and milestones and isn't too different from a publishing contract except with governments you'll find a lot more paperwork, different forms of oversight, and strict rules governing meeting the obligations of the contract.  

Among the entire government the Department of Defense is the most active at contracting games to fulfill objectives.  Most other agencies aren't as far along and have far lower training budgets.

Foundation Contracts
Just like government contracts, foundations will (very rarely) do the same thing and contract a company to produce a project for them as they might the creation of a Web site that supports foundation activities.  There is no single way to see where such opportunities allow but it is a pathway that has taken place before.

Recommendations
There is a lot to know about tapping into government and non-government grant and contract opportunities than can be presented in one article.  Here are some closing recommendations that will help you as you dive into this more:

1. Cultivate partners
Many developers are small, and under-equipped to handle the paperwork, the requirements, and the workload of many grants.  Furthermore, as for-profit companies they are not necessarily allowed to submit to a slew of grant-based opportunities (for example NIH grants with the exception of SBIRs are not awarded to for-profit entities) but, you can be part of a team that wins the award.  In such structures often a university or non-profit prepares the grant application and drives the project, and they present a game-development partner as the source of production.  You then contract with the grant recipient.

Of course to do this you need to cultivate such partnerships with various groups who are capable of submitting such grants, and you also need to prepare various materials (usually on spec) that help with the grant application process.
The best partners will be local partners who you can meet with regularly and develop strong working relationships.  These can be university professors, community non-profits, hospital-based researchers, and more.  

2. Build useful core technologies
Many grants are research-based and don't fund development to large levels of funding. Increasingly the shift is to mobile-based games, cross-platform solutions, and social-network capable games -- which is not unlike the industry as whole.  Research-based games also need to protect player identities and comply with regulatory systems like HIPPA, COPPA, and more.  They also need to track gameplay, and provide a means to assess player outcomes and behaviors inside the game.

You can build advantages by building technologies that lower-the-cost of building games overall, but more specifically with tracking player outcomes, with enabling cross-platform deployments, and complying with various rules like HIPPA.

Another strategy here is to look ahead as to the real edgier parts of the industry where government interest/research interest is likely to be.  Right now that might involve biometric games using sensors, learning communities/multiplayer learning, and procedural content.  There is no perfect crystal ball but its not impossible to figure out through reading and conversations with people who have their ear to the pavement to get a sense of where your own work might set you up to more readily give you an advantage in a grant application opportunity.

3. Attend events and meetings
There are many meetings where you can learn more about grant-based programs and funding.  They come in two forms generally.  First are online or in-person meetings designed to directly gather and support applicants to various government agency grant and contracts programs.  Scan agency Web sites and grants.gov for information about these and look for state & local programs that help prepping such grants.

The other form of meeting are meetings on topics where you're likely to learn more about the domain and those who are funding it as program managers, previous recipients, and peers gather to discuss the field.  For example Games for Health Conference (which this author owns and operates) is often a place to meet program managers and previous recipients of grants for health-based games and games research.  Likewise Games, Learning, and Society at University of Wisconsin sees it's share of NSF and educational funders/funded participants.  Games for Change is another that sees attendees with government grants from agencies like NEH, NSF, and NIH.  While these game conferences are perfect opportunities you also can investigate events specific to the subject domains such as the American Public Health Association annual meeting or AIR, the Association for Institutional Research conference.  

4. Understand applied games and challenges
Most grant programs are not interested in games per-se.  They are interested in solving problems in their portfolio, which they may be convinced can be done with a game.  The key point is that you must really understand and show that what you're addressing is an unmet need, not just a game for games sake.  If you can't answer why a game brings a new idea to solving a problem that remains unsolved, or well solved, you're not going to get far. 

Furthermore, understand how program managers and their respective institutions tend to push forward and seek ever more innovation these days.  A few years ago a single-player game to address improving nutrition might have been an interesting research question but today program managers are more interested in how a social-network game running in a mobile environment supporting someone at the point-of-purchase might help.  Program managers and reviewers don't stand still, they want to support work where few have trodden and once an area has had some investment (good or bad) they can move on.

5. Understand how funding generally works
Many developers and others also fundamentally don't understand how much of grant based funding works.  Learning the gist of it helps a lot to frame the opportunity.  And what is that gist?  In a nutshell it is this:

"The majority of grant based funding goes to universities and non-profits.  These recipients get the "gross award" but especially with universities that award is lowered by their Indirect Cost Rate (essentially overhead) or the non-profits overhead.  Thus, a grant of $4M over four-years might essentially result in dispersible funds of $2-3.2M depending on the recipient.  Not all of these funds result in funds for development as they also have to support staff on the recipient's end and research work (e.g. recruiting participants) and equipment they will use.  The result is a headline of a $4M grant award to Local University X might mean that 20% of that award is spent on the game's actual development.  Often these budgets are baked in at the grant submission process with developer partners and consultants being agreed upon prior to submission.  Finally, many institutions will use local employees and students to build their prototypes not outside developers."

The above outline isn't perfect but it's pretty much the norm even if certain practices aren't optimal.  Understanding it though helps you set expectations and strategies for being among those who benefit from this type of funding.

6. Plan, and write well.
Most grant applications are huge pieces of work requiring strong writing and planning to achieve.  They are often supported on spec and include preparing specially designed bios, letters of support, and well cited workups of the idea and solution.  They're not whipped up in a day or two.  A good month of work 1-3 people is more the norm.  Needless to say, clear writing, well structured ideas, and precise claims are critical.  Having judged some applications you'd be surprised how many promising ideas die in review because the claims about the idea are wildly under-supported and communicated.  It is not the job of reviewers to save your grant from your poor submission.

7. Don't Depend
Grant-based funding should not be the majority of your work as a studio.  Perhaps as tiny independent developers it can be, but in general, the batting average of grant wins is low, and the work isn't the most lucrative.  Moving from grant-to-grant as a sustainability mechanism is hard and most studios doing this don't fare-well long term.  Even if you're able to keep the IP from the work, most grants don't supply oodles of funding to help transition it to full commercial status.  

The best studios pursuing this work will use it as a great supplement and expansion of their business.  If you do pursue a larger percentage from grant funding it probably should be with an eye of building a portfolio of commercialized work in a specific sector of activity.

For example, ORCAS, a health apps/games developer based in Oregon has used several SBIR wins to build a market-ready portfolio of mobile health solutions it is now marketing to consumers and health businesses.

8. Square Pegs are Bad Approaches
Too often the assumption of neophytes is that grants exist to help them with the idea they've had for years.  That's not how these system works.  Don't seek the square peg into the round hole solution.  Instead, to win at this game, read the grant opportunity, start with a blank paper, your experience, and ingenuity, and solve the problem.  Approaching the grant-based world because you still haven't gotten a chance to build that epic educational game about music theory you've always wanted to make is a recipe for failure.

9. Advise and consult
As talent in the game industry the grants game isn't always about being the developer of record.  Many grant recipients are in need of advisors, testers, and more.  Some of these positions are paid, offer honorarium, or are free but in any form it's a great way to contribute to these styles of projects and learn more about the entire process for future efforts of your own.

10. Read & Play
Finally, read a paper, news Web sites, science magazines, and more.  Watch TED videos, or other forms of discussion about the world's problems and the means by which we're addressing them. Most of the grant programs and entities outlined here exist to improve the world we live in.  We can all share the sentiment that we need to do this, but the people who succeed at winning grants are well read across a number of domains.  They're engaged in civic discussion and their communities, and they're not just expert about their specific field.  So much of winning work in this field is based on your ability to translate your skills, not just the domain areas of the field the grant is addressing, but also in ways that build person-to-person relationships with the many partners you will encounter.  

It also goes without saying you need to play, and be aware of many types of games.  Most grant work is not about applying the mainstream genres of games but often is about matching more obscure game design and production patterns to the very specific problem presented in the grant.  For example, in one project we worked on it was our knowledge of TWINE and basic ideas around simple interactive fiction that fit the problem space better than a large-scale 3D first-person perspective.  In another we found inspiration for an obscure Japanese game that depicted different common and uncommon occupations.  So a diversity of play and familiarity with less costly approaches can serve you well.

Games are Everywhere
The opportunity for games has expanded greatly over the last decade.  Not only because of new sources of funding from Kickstarter, to grants, to free-to-play models, but also because the world we live in is becoming increasingly open to the idea that games, like other media, offer a strategic opportunity to solve and address goals and needs they have.

The grants world has not only sought games for their needs, but also supported the basic research needed to show that games can be specially designed and tuned to accomplish more than just entertainment.  That is a significant achievement.  And while more work remains to generate home-runs the stage is now set to see games go way beyond what they've achieved so far.  

By being aware of some of the structure and forms grant-based funding takes you are now hopefully better about to benefit and contribute to both the specific problems they are addressing and the larger goal of seeing games uniquely contribute to our lives.