Pass-Through and State Grants: Understanding the Difference

Even the federal government needs help from state governments to funnel grant money into public programs and projects. This is where pass-through grants come in. But how does this differ from state grants for similar good works? 

According to grants.gov, pass-through grants are funds issued by a federal agency to a state agency or institution that are then transferred to other state agencies, units of local government, or other eligible groups per the award eligibility terms. 
Wow, that's a mouthful! In simpler terms, pass-through grants are funds given by the federal government to state governments.  These funds are turned into sub-grants, then
“passed on” to another recipient, known as the sub-recipient. This process gives the state governments more flexibility and autonomy over the use of any federal grant funds.  

But why can’t the federal government simply award the grant itself? Why have a pass-through entity to deliver and monitor federal funds? 
 
The purpose of pass-through grants
Pass-through grants are used when a federal program lacks the means to provide assistance directly to the final recipient. Instead, the state government provides the necessary support by “passing on” the funds and helping to run the desired program at the state level for the federal government.

A known example of this would be
instances when federal crime prevention programs are assigned to a state attorney general’s office.
After receiving federal funds, the office would award sub-grants to cities and counties within the state for crime prevention activities, such as neighborhood watch programs or new
police equipment. The state attorney general’s office serves as the pass-through entity and the cities and counties are the sub-recipients. 

Pass-through Grants vs. State Grants
But if state governments are usually working as a pass-through entity for federal grant money, what’s the difference between a pass-through grant and a state grant? Both types are usually either classified as competitive or formula. Even the competition for both is much smaller than that for direct federal grants. But, when searching for state funding, you’d have to search and apply through individual agencies or departments at the state level. The organization you’d be dealing with to receive the funds would be the state government or a state-run program. Simply put, the only real difference is where the money originates from. 

 A pass-through grant is created when the federal government provides funds to state governments, who then pass the funds along as sub-grants to sub-recipients. The money provided is coming from the federal budget. 
 
A state grant is awarded by the state government to a recipient, a direct flow from funder to awardee. There is no middleman. 
Additionally, the funds for state grants are taken from the state budget, not the federal. 
 
In the grand scheme of things, however, it doesn’t really matter where money originates. If you qualify, apply to any and all local and state-run grants for the betterment of your organization!
Are you unsure of where to start or which grants you qualify for? No problem. Contact MPS Grants today and our staff will be more than happy to help you on your grant funding journey. 
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