What Is a Grant?

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The federal government's 26 grant-giving agencies administer more than 1,000 programs to provide tax money to nonprofit groups and individuals to perform charitable work or to perform work for the public good or to develop the community.

Grant Basics

  • Grants aren't lump-sum awards granted indiscriminately. Because organizations receive public money in the form of grants, they must be accountable for the uses of the money. Agencies provide grants for specific purposes, outlined by the grant's qualifications and grant proposals that outline spending plans for the grant amount. If grant money is used for purposes other than the reasons it was provided, grantees could face legal sanctions and may be forced to return the amount. For example, a student who receives a Pell grant from the Department of Education must spend it on college-related expenses, not to launch a start-up skateboard company.

Types of Grants

  • Because of the number of grant programs that administer grants to organizations and individuals, the scope of grant possibilities are broad. Federal organizations provide grants in 21 areas that range from agriculture and business development to science and technology and education. Each organization supports different goals with its grant programs. For example, the Department of Agriculture provides grants to fight hunger and provide stewardship of open areas, while the Department of Energy promotes research into energy and energy independence.

Grant Eligibility

  • Only a small portion of grants are available to individuals, and none provide no-strings financial assistance to help pay for credit card bills, delinquent mortgages or other personal financial issues. Most grants are provided to state, local and tribal governments, educational organizations, public housing providers and small businesses. The Department of Education provides several grant programs to support college students on the basis of financial need, and in some circumstances, academic performance or service as a teacher or in the Peace Corps.

Grant Proposal

  • Most other nongovernmental organizations only make grant awards after receiving a formal grant proposal from an organization or individual. While grant proposals must be written to suit specific grant programs, most should outline the problem the grant money will be used to address or the research problem it will investigate, establish a grantee's track record of success, how money will be implemented and show that grant funding is necessary to perform the project.

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