Government Grants: Learn How You Qualify
There are many different types of grants available. The goal of a grant is to provide funding to either an individual, group or agency. Money from a grant does not need to be repaid. While grants may seem like free funding, the provider of the grant sets stipulations, which determines how the money must be spent. Misusing the funds may result in the grant being pulled, in which case you are required to pay all the money back. There are many businesses and charities that provide grants for services like housing or education. The federal government also provides grants, but these are much different from the smaller grants individuals apply for.
Government grants provide much more funding than traditional grants. In 2017, the average government grant was $80,000. Getting a government grant is difficult because of the competitive application process. The requirements to get a government grant are much stricter than traditional grants. The target audience for government grants is largely corporations, research labs, universities, state agencies and non-profit organizations.
Categorical Grants
There are two primary types of grants, some of which have several subsections of additional grants. The first grant type is categorical. There are two subsections, project and formula grants. Project grants are used to fund specific projects or services. A common example of categorical grants are medical research grants available from the National Institutes of Health (NIH). These grants offer a set amount of funding for any kind of medical research, so one group may apply for cancer research, while another applies for developing flu vaccines.
The grant provider goes over all the proposals and determines which group benefits the most from funding. How the funds are allocated greatly varies based on the agency issuing the rant. For example, in 2020 the majority of medical research grants went to agencies treating the Coronavirus.
Formula grants provide funding for services that assist specific groups or communities. These grants are commonly used to help lower-income neighborhoods or senior communities. The main difference between categorical and formula grants is formula grants are not competitive.
Competitive funding means there is a limited number of funds available, so it is much harder to get grant approval. In comparison, formula grants are issued to multiple groups. Funding for formula grants is not unlimited, so the grants are typically open for short periods and only go to a select number of groups. The funding is also smaller than categorical grants, since it is intended for multiple groups.
Block Grants
The second category of government grants is block grants. Block grants are issued directly by congress. Only state agencies are eligible for block grants. These types of grants are issued to a state to fund multiple programs with similar goals. For example, one of the most common grants is the Community Development Block Grant Program (CDBG). This grant affects community housing, providing funds to improve neighborhoods and create more economic opportunities for lower-income residents.
Formula and Matching Grants
Formula and matching grants apply to both categorical and block grants. These categories refer t how the grant is funded. Formula grants apply scaled funding based on the criteria of the grant. For example, if you apply for an educational grant, the government awards you a set amount of money per student in the district.
If you apply for a matching grant, your agency is required to make a contribution to the project. The exact amount you must match varies based on the grant. Some grants require you to provide the funding upfront, while others are at the end of a project. Matching grants are most commonly used with categorical grants, but some block grants also require the state to match the funds.
Applying for Government Grants
The government has a website to search specifically for government grants. You can also search for grants through individual agencies. Applying for a government grant is a long and involved process. The majority of government grants have a small window to apply. You must submit detailed proposals, explaining why you deserve the grant and how you intend to use the funds. The majority of grants require a detailed expense list, similar to a business plan. This also includes a list of resources your agency already has. It is recommended to include examples of previous projects your agency completed, or cite examples where similar projects succeeded.
Government agencies often ask for more details, especially with competitive grants. In some cases, you must present your case in person. This is especially common with block grants.
Researching Government Grants
Both finding and applying for government grants involves research. Researching previous grant proposals is an excellent way to prepare your own application. Fortunately, many successful grant proposals are publicly available online. Pay careful attention to repeated phrases and terms in the initial grant description. Whenever possible, include these words in the proposal.
Do not be afraid to ask questions to the grant provider. If it seems like the provider is not interested in your agency, focus on a different grant. Because government grants are so involved and only available for a short period, you do not want to waste time on a grant you are unlikely to receive.
