What is a 'Government Grant'

A government grant is a financial award given by the federal, state or local government to an eligible grantee. Government grants are not expected to be repaid and do not include technical assistance or other financial assistance, such as a loan or loan guarantee, an interest rate subsidy, direct appropriation, or revenue sharing. Over 26 federal agencies administer more than 1,000 grant programs annually to provide funding for the arts, educational institutions, agricultural projects and more.

BREAKING DOWN 'Government Grant'

Government grants help fund ideas and projects providing public services and stimulating the economy. Grants support critical recovery initiatives, innovative research and other programs listed in the Catalog of Federal Domestic Assistance (CFDA).

Because government grants are funded by tax dollars, they require stringent compliance and reporting measures for ensuring the money is well-spent. Grants from the federal government are authorized and appropriated through bills passed by Congress and signed by the president. Grant authority varies among agencies. For example, the Small Business Administration (SBA) may distribute grants to nonprofit organizations in many of its counseling and training programs.

Grants.gov

Grants.gov is a free online source for researching and applying for over 1,000 federal grant programs with access to approximately $500 billion in awards annually. A grant proposal writer may register by completing a standard business profile on behalf of an individual, a nonprofit organization, a research institution or a similar entity. The writer also submits an authorized organization representative (AOR) application, supplies an e-business point of contact (POC) and completes a detailed application. The writer then has access to finding federal grant opportunities, applying for and tracking grants, and receiving grant email alerts, webinar schedules and tips from grantors.

Applying for a Government Grant

Government grants are extremely competitive. The paperwork is complex, and applicants must describe how being awarded money will benefit the community. Crafting a convincing proposal is so challenging that some freelance writers specialize in writing grant proposals.

Being Awarded a Government Grant

Receiving a government grant is a sign an individual or nonprofit organization has a significant, positive impact on the community. Other grantors view this as a sign they should provide grants for the project as well. When a nonprofit organization receives a government grant, the government is more likely to listen to views of the people involved with the organization and potentially help those people network with others in the same field or help with related issues.

After receiving a check for a government grant, detailed reports accounting for how the money is spent during the grant period and what accomplishments or failures occur must be documented and submitted according to various deadlines.

Example of a Government Grant

A government grant may fund economics programs supporting research for improving the understanding of the processes and institutions of the U.S. economy and of the world system. For example, an economics program may be designed for strengthening empirical and theoretical economic analysis, as well as the methods for rigorous research on economic behavior.

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