Writing competitive grant proposals for putting analog collections online is difficult, and is becoming more so as more institutions are in a position to submit high-quality proposals and digitization for its own sake is no longer a priority for funding agencies. Collections themselves are no longer enough. There are many more collections that deserve a wider audience, that will significantly contribute to the work of scholars, and that will bring new knowledge to light, than can possibly be funded by even a hundred times the amount of grant funding available. The key is to offer something new. A new search feature. Expert contextual materials. User tagging capabilities. Something to make your project stand out as special and test some new ideas.
The trick is that in order to write that convincing proposal, you have to do a significant amount of the project, even before you write the proposal and before you get any money. Most of the important decisions, such as what metadata standards you will use, must be made before you write the proposal, both to convince a funding agency you know what you are doing and to develop reasonable cost figures. To make these decisions, an in-depth understanding of the materials, your users, the sorts of discovery and delivery functionalities you will provide, and the systems you will use are all necessary. Coming to those understandings is no small task, and is one of the most important parts of project planning. Don’t think of grant money as “free”—think of it as a way to do something you were going to do anyways, just a bit faster and sooner.