DEFINITION of 'Grant-in-Aid'

A grant-in-aid is the transfer of money from the federal government to a state government, local government or individual person for the purposes of funding a specific project or program. The federal government gets this money from income tax revenues. Grant money is not a loan and does not have to be repaid, but it does have to be spent according to the federal government's guidelines for that particular grant.

BREAKING DOWN 'Grant-in-Aid'

Grants-in-aid can be awarded to university faculty members to pursue a particular line of research, but there will be restrictions, which will vary by grant, on how the money can be used. For example, a permitted use of the funds might be to pay undergraduate students to assist with the research; a non-permitted use might be the payment of university utility bills.

The recipient will also have to meet certain requirements to qualify for the aid. An individual recipient might be required to meet certain citizenship and/or residency requirements, for example.

Types of Grants-in-Aid

Grants-in-aid can take on a variety of forms. For instance, a university might make a grant-in-aid to support a program that lowers the tuition rate to make it more affordable for military veterans and their spouses. A university might also make this type of funding available to support conferences that have a particular subject matter or area of study at its core.

In the case of research efforts that receive a grant-in-aid, it may be stipulated that the funding is not intended to cover all expenses for the project. Furthermore, the grant may be given with the intent of encouraging and attracting other, more substantial funding to the project. This makes the grant-in-aid a sort of seed funding that lends some credibility to the endeavor. Entities that offer support through grants-in-aid might divide the resources up for multiple awards across one or more periods of time each year, and further divided among a set number of potential recipients. This can make the pursuit of such grant funding a competitive effort among the applicants.

Foundations and professional associations might offer grants-in-aid as a form of financial assistance to graduate students who are developing theses focused on specific topics that are relevant to the organization.

Parts of a state government, such as its legislative body, might procure and earmark grants-in-aid to support nonprofit organizations that provide aid to its constituents. The money, however, is often stipulated as a supplemental rather than primary source of funding.

RELATED TERMS
  1. Grant

    A grant is an award, typically financial, from one entity to ...
  2. Fund

    A fund is a source of money that is allocated for a specific ...
  3. Transfer Payment

    Transfer payments, in the United States, are payments made to ...
  4. Catalog Of Federal Domestic Assistance ...

    The Catalog Of Federal Domestic Assistance (CDA) compendium of ...
  5. Conditionality

    Conditionality refers to conditions attached to the provision ...
  6. Special Revenue Fund

    A special revenue fund is an account established by a government ...
Related Articles
  1. Personal Finance

    How to Get Paid to Go to School

    Tuition benefits, grants and scholarships can help you get paid to go to school, and enjoy the payoff from your degree without racking up student debt.
  2. Personal Finance

    A quick guide of how FAFSA loans work

    If you’re headed to college and want to know how to apply for financial aid, this is where you need to start.
  3. Personal Finance

    How Financial Aid for College Tuition Has Changed

    Financial aid for college tuition has gone high-tech and currently favors higher-income applicants.
  4. Personal Finance

    Who Should Pay For College?

    With college costs continuing to escalate, the question of who pays for it is increasingly relevant.
  5. Personal Finance

    College Cost Reduction Act Helps Students Meet Payments

    This legislation can help families pay college costs and reduce student debt.
  6. IPF - Banking

    Introduction To Money Market Mutual Funds

    Learn about the easiest way to benefit from money market securities.
  7. Taxes

    Investopedia.org 2018 Funding Guidelines

    Investopedia.org is Investopedia’s initiative to support nonprofit organizations that are working to enhance financial empowerment.
  8. Taxes

    How to Make the Most of Your Donor Advised Fund

    These are the common methods used to determine the annual grant amount for donor-advised funds.
  9. Personal Finance

    8 Low-Cost Ways To Transfer Money

    If cost is your primary concern, there are several cheap(er) ways to move funds.
  10. Personal Finance

    Fund Your Schooling with PLUS Loans

    Find out what they and are whether you're eligible to apply for these no-maximum loans.
RELATED FAQS
  1. What are some examples of money market funds?

    Learn more about different types of money market mutual funds, including those that invest in government paper versus commercial ... Read Answer >>
Trading Center