Year after year, the Federal Trade Commission deals with thousands of complaints from consumers paying money for government grants -- only to find that a scam artist disappeared in the middle of the night with their money. In general, grants with an upfront cost are a scam, because the whole point of grants are they they are free money.
You should never need to pay any upfront costs for a grant, such as an application or processing fee, warns the Federal Trade Commission. This is especially true for government grants, which never require an application fee. Con artists often tempt consumers with a promise to fast-track their application for a grant, only to take their money and leave them empty-handed. Even worse, some con artists steal sensitive information, such as Social Security and bank account numbers to perpetrate identity fraud.
Sometimes, the agency or foundation providing the grant requires matching funds. This means that you must raise funds equal to the grant to receive the grant. For instance, if the Small Business Administration approves you for a $1,000 matching grant, you would have to have $1,000 ready to put into your business before the SBA disburses your $1,000 award.
You might incur some fees when searching for grants. For example, some companies compile lists of private grants and scholarships for a monthly subscription. This might be a legitimate expense charged by the company, because private grants usually require more effort to find than government grants. You also could spend money on a consultant to help with your application. Again, these are optional costs.
Investigate any company that requires an upfront fee to apply for or acquire the grant, such as reviewing any complaints with the Better Business Bureau. If someone asks for upfront fees for a government grant, it is a scam and you should report the individual or company to the FTC so they can investigate the grant and possibly stop someone else from falling for the scam. One of the best ways to find a legitimate government grant is through the official "Grants.gov" website.