Types of Government Grants

A government grant is a gift of money that does not require repayment. There are various types of grants designed to help organizations complete tasks and run programs that benefit the American public. Only grants that are created, monitored and issued by state or federal bodies are considered government grants. Strict terms and conditions must be met before a government grant can be awarded.

Although these special funding opportunities are made available to a vast number of individuals, organizations and local governments, they are not automatically awarded. Government grants must be applied for through official channels and can be highly competitive.

Though competition is fierce, the reward of getting free money is worth doing a little research. One thing to keep in mind, however, is that the application guidelines for government grants are very strict. This means that you must ensure that you fully meet the eligibility criteria and that you provide acceptable copies of all requested paperwork. This attention to detail will help ensure that your hard work pays off.

Types of Government Grants
There are two main types of government grants; discretionary grants and formula grants, otherwise known as block grants. While the regulations that govern the funding programs behind each grant are similar, the way the money is distributed and how recipients can apply for each type of grant is different.
Discretionary Grants – A discretionary grant is issued directly to an organization from the federal government to help support a specific project or ongoing program. Applicants may find it harder to secure these types of grants as they are distributed at the federal level, allowing organizations nationwide to apply.
Formula or Block Grants – A formula grant is issued to states, cities and counties, allowing them to distribute the funds to non-profits, community projects and local organizations. The issuing department may impose their own rules and regulations in addition to the laws that govern the funding program.

The Difference Between Funding Programs and Grants
Funding programs and individual grants are not the same thing. A funding program is used to finance a grant and can be used to fund more than one. For example, the USAID Foreign Assistance for Programs Overseas helps to fund multiple grants in the same field. The rules and regulations of each grant may differ but are subject to the laws outlined in the parent funding program.

The Lifecycle of a Government Grant
The grant’s lifecycle describes the process from application to implementation. Regardless of the type of grant being applied for, the lifecycles are relatively similar. Organizations apply for grants, receive funding, implement projects, report their activities and conclude the program. Information on a typical grant’s lifecycle is detailed below.

Pre-Award Phase
This step refers to the initial funding opportunities presented in the grant and the process of application. Grant-making agencies release a Funding Opportunity Announcement detailing the information in new grant. Applications are then put forward, and submissions are reviewed. Grant programs assess the contents of each application, the budget laid out in the proposal and whether the project aligns with the mission of the fund. Once all applications have been reviewed, a decision is made, and the grant is awarded to one or multiple organizations.

Award Phase
Awards are only given out once a thorough review of each application has been made by the agency staff and fiduciary oversight committees. Once the final decision has been made, an official announcement is made, and all parties are notified. A Notice of Award (NOA) is sent to successful candidates outlining the terms of the award.

After the organization signs the grant agreement or withdraws funds, they are legally bound to fulfill all conditions of the grant. All award winners are not only subject to the rules of the specific grant, but to state and federal grant policies. Failure to adhere to the rules and regulations outlined in local and national legislation may result in penalties and the cancellation of funds.

Post-Award Phase
The post-award phase varies in length and complexity. Every grant contains completion dates and proposed milestones. The majority of the work is typically carried out during this stage. Organizations must fulfill the terms of the grant and report their progress to the issuing authority. Grant agencies are available to help recipients navigate the post-award phase and hit mandatory targets.

The Government Accountability Office and other federal departments monitor and audit the progress of grants. These audits help enforce compliance and analyze the performance of grant programs. Applicants must submit final paperwork within 90 days of the grant expiring to complete the closeout process.

Types of Funding Agencies
There are over 26 agencies in the federal government that can create and issue grants. These grants are funded by programs passed in Congress and approved by the president. Therefore, the recipients of the grants must adhere to the laws that support the funding program that governs the grant itself. The following government agencies are endowed with the ability to create and issue grants to eligible organizations:

The category of grant is not always tied to the most obvious agency. For example, an agricultural grant may be issued by USAID as part of an international effort to promote sustainable agricultural solutions.

Where to Find Grants
For the convenience of the American public, the government publishes the Catalog of Federal Domestic Assistance. The CFDA discloses a list of all of the assistance programs, benefits—and grants provided by upwards of 70 federal agencies of that year such as the following:

• The United States Department of Agriculture (USDA)
• The Department of Health and Human Services (DHS)
• The Department of Justice (DOS)

This annual publication can be downloaded at SAM.gov.

The catalog is mainly utilized by non-profits and other organizations to find funding sources for their local programs. However, individual private citizens may find the document extremely useful when looking for free money from the government. Each year, millions of dollars in grant monies go unused or unclaimed simply due to the fact that people aren’t aware of the various public assistance programs that exist.

In the catalog, you will find grants that most people are very much familiar with such as the Federal Pell Grant which provides income eligible undergraduate students with funds to attend an accredited college or university. But also, you’ll find more obscure and underutilized grants such as the Community Facilities Direct Loan & Grant Program in which the USDA provides individuals and organizations with funds to improve their rural communities.