Extra! Extra! Here’s What Everyone Should Know about Federal Grants

The world of federal grants is a large and complicated one. Many who wade into it find themselves confused and unsure of where to turn. Is this grant right for us?  Have we wasted precious time and resources on the wrong choice?! Understanding the basic definitions of federal grants, as well as the restrictions or qualifications each type entails, will help you on your grant-finding journey. Here is a quick rundown of the basics. 
 
What is a federal grant? 
A federal grant is an awarded amount of money provided by the United States government, paid for out of the funds available in the general federal revenue. Federal grants can be provided to organizations and individuals in many different ways - for example, covering a portion of a project or organization’s cost, or a complete funding of a project. The US government offers nearly 1,000 different grant programs to qualified businesses, organizations, and individuals. These programs are distributed by 15 grant-specific cabinet level agencies and divided into 21 separate categories. Those categories widely vary and are usually geared towards a specific need or area of development. How varied? Well, just a sample of the various grant categories would include: the arts, business and commerce, disaster relief, housing, humanities, science and technology, and education. Whew, that’s a lot!  There are even different classifications for how federal funds are received
 
Federal grant classifications
 One classification is that of a direct grant.  In simple terms, a direct grant is awarded to a recipient directly from the federal government. In contrast, a pass-through grant is first given to a state by the federal government and then distributed to local applicants. Of the two, a direct grant requires less wading through the proverbial bureaucratic red tape, giving the benefit of a single application and one-on-one agreement with the federal government. However, a pass-through grant has its own appeal. These grants can only be obtained by individuals or organizations within a given state so they offer applicants a chance to apply for funds with fewer competitors.
 
Types of federal grants
Following a list of general guidelines, federal grants fall into a few specific types: 
    • Project Grants
    • Categorical Grants
    • Block Grants
    • Formula Grants
These categories allow an applicant to identify a grant’s purpose, which in turn helps determine which grants are the best fit for your organization’s mission, goals, and objectives.  
 
A project grant provides funds for a specific project or area of research.
These are most often awarded to members of the science, education, and technology communities, though other groups can be recipients as well. The only thing that matters is whether you meet the qualifications for the grant. Unlike other types of grants, project grants generally have a stopping point when the funding is discontinued. On average, a project grant will run for around three years. However, this does not mean they can’t be shorter or longer. It all depends on the grant. 
 
A categorical grant, or conditional grant,  is a little more specific. It can only be used for a narrowly defined purpose.
As such, these types of grants
usually come with reporting requirements. Why? To make sure the recipient continues to adhere to program conditions. (Don’t let them catch you using grant money to order pizza for the office!) Categorical grants are the primary source of federal assistance awarded to local and state governments. Examples include Head Start programs, Magnet School programs, Forestry Assistance programs, and Asbestos Abatement programs. 

 A block grant is a little different. It is a larger grant that’s generally made up of smaller categorical grants.
In this case, however, block grants are awarded to state and local authorities for fulfilling general purposes, not specific. Examples of this would be public enforcement, law enforcement, and community development. There are few strings attached to them, which gives the recipient a lot of discretion in how the money is spent. These grants usually appear as pass-through grants at the state or local level which, in turn, provide funding opportunities to local agencies as well. 
 
A formula grant, or mandatory grant, has funds distributed as determined by legislation and regulations.
They’re awarded based on a number of preexisting factors and criteria, such as population, poverty level, taxes, and housing density.
Unlike other grants they are not competitive. The amount of funds received is based solely on where a potential recipient falls inside the established formula. An example of this would be with Medicaid: does a person qualify? If so, how much do they qualify to receive? These standards are set at the federal level and met by agencies within each state or provide the necessary services outlined in the appropriation legislation. 
 
Hopefully you now have a better understanding of the different classifications and types of federal grants available to the American public. Whether you’re a local government, a nonprofit organization, or an individual, federal grants are available to help with your needs. All it takes to get you started is a little patience, persistence, and research.
 At MPS Grants, we’re happy to help you with this process. Contact us today to get started! 
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