What is a Government Grant?

Many nonprofit organizations receive grants from state and federal government agencies to provide services.  Every year, government agencies around the country provide over $200 billion in grants to nonprofits.  But before you can receive a government grant, you must understand what they are and who is eligible to apply for them.

A government grant is a contractual award of assistance in the form of money to an eligible grantee.  Grant awards are not repaid by the recipient.  Typically, there is an application process to qualify and be approved for a government grant.

In addition, when you receive a grant, you are agreeing to carry out the activities described in your grant application and adhere to all the conditions of award.  These conditions always include providing periodic financial and program reports on your grant activities.

Today, there are approximately 2,000 federal grant programs and over 40,000 state grant programs.

These are some examples of federal and state government grants:

  • US Department of Education:  grants to help prepare underserved students to graduate high school and attend college.
  • US Department of Health and Human Services:  grants to provide comprehensive sickle cell disease education, outreach, and medical services.
  • North Carolina Department of Environment and Natural Resources:  grants to municipalities to prepare for natural disasters such as floods or hurricanes.

There are two kinds of federal grants.  Direct grants mean that you apply directly to federal agencies.  These are highly competitive – you are competing with other nonprofits for funding.

Pass-through grants mean that a state government receives federal grant money and then passes on these funds to local nonprofit organizations.  These may not be competitive grants, but they are likely to be smaller dollar amounts than direct grants.

On the federal and state levels, you must be eligible to apply for government grants.  Typically, most grantees fall into the following categories:

  • Government organizations:  state and local governments, Native American tribal governments.
  • Educational organizations:  school districts, private schools, institutions of higher education.
  • Public housing organizations:  public housing authorities, Indian housing authorities.
  • Nonprofit organizations:  nonprofit organizations having a 501(c) 3 status with the IRS, other kinds of nonprofit organizations.

To learn more about federal grants, visit The Catalog of Federal and Domestic Assistance (www.cfda.gov), which lists every grant program administered by the federal government.  For grant opportunities at the state level, visit your state government’s Internet site.

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