Government grants are considered free money given to states, organizations and, in rare cases, individuals. A federal government grant can provide much-needed funds to help aid recovery initiatives following natural disasters, pay for research on medical or technological subjects and even reward communities or programs that show great promise. Typically, grants are meant to bolster the economic status of a community, but they can also be used to promote new concepts and improve living conditions.
Unlike federal benefits, such as food stamps or unemployment, grants are not distributed based on individual need. Instead, they are circulated based on regional or community needs and the potential of the project or research goal for which they are awarded. If you are interested in pursuing government grants for your small business or other organization, then the sections below explain everything that you need to know to ensure you qualify for and abide by all legal requirements of your grant.
Who can get a government grant?
Many believe that free government grants are readily available to individuals starting a new business venture. However, such government grants for individuals are not offered despite what some websites and media channels may advertise.
Additionally, government hardship grants and government grants for women and other minorities are not frequently sponsored. These types of funds cannot cover anyone’s personal expenses or endeavors, so applicants must seek other means of funding if they want to apply for a grant as an individual. For instance, student loans, housing loans and small business loans offer individuals other funding options that are more flexible but must be repaid with interest.
Grants may be available to businesses or any group that applies for it, but the eligibility criteria can be strict. Currently, the U.S. government reserves government grants for the following organizations and businesses:
- State or local governments
- County governments
- City or township governments
- Special district governments
- Federally recognized tribal governments
- Universities or private/public colleges and schools
- Nonprofit organizations
- For-profit organizations
- Small businesses
- Researchers in various fields of study
- Law enforcement programs
- Certain other institutions or organizations
Note: A list of government grants for individuals can be found on the official grant website for the U.S. (Grants.gov), but you are reminded that these funding opportunities may only be used for the fulfillment of a mutually beneficial project or research work for the greater community and the applicant – not for any other purpose.
Learn About the Requirements for Government Grants
Because federal grant applications may take a significant amount of time and money to complete, knowing whether you are eligible for different grants or not can be very beneficial. Unfortunately, the federal grant eligibility criteria vary for each grant, but similar rules apply to all. Basic eligibility criteria are as follows:
- You must be a qualifying organization, institution, business or individual.
- You must have an idea or a project that will benefit the public and promote its general welfare.
- You must register with Grants.gov.
- You must write and submit a grant proposal detailing your project or idea before the deadline.
- You must complete a government grant application for the grant you would like to receive.
Once you select the federal grant that is right for you or your organization, you are advised to review the application guidelines listed for that particular grant. Those guidelines will also dictate how the grant money may be used, who in your organization may use it and when the money will be distributed. Be sure to pay attention to the posted and close dates for each grant, as the earlier you apply for a grant, the better chance you have to earn it.
How to Apply for Government Grants
You can apply for government grants online, but you should find grants that align with the type of work you are doing to ensure the grant will assist you. Before applying to any grants, you should familiarize yourself with the grant lifecycle. The lifecycle consists of three phases including:
- The pre-award phase. This is when a Funding Opportunity Announcement (FOA) is made that describes a grant’s budget and target audience. During this phase, you can navigate the list of individual grants and filter the search results based on your interests.
- The award phase. This is when the federal agency that offers the grant reviews all applications and decides on a winner. Once a winner is chosen, the aforementioned federal agency and the selected grant applicant(s) enter into a legally binding agreement that outlines the terms of the grant. Afterward, the grant recipient immediately becomes responsible for completing the conditions of the grant.
- The post-award phase. This is when the grant recipient begins the reporting process when the federal grant agency formally monitors his or her progress throughout the duration specified in the grant agreement. Additionally, the grant agency is audited, and the grant recipient must submit all financial and performance reports within 90 days of the grant’s termination.
The application process for government grants occurs during the pre-award phase. To apply, simply register on Grants.gov, locate the grant you wish to apply for on the Catalog of Federal Domestic Assistance (CFDA) and click the red “Apply” button. Follow the instructions on the site, and you will be prompted to create a Workspace – a shared, online form used to complete and submit all applications.
Note: Some applications may cost money to complete. Fully review the terms of each grant before continuing the application process.
How to Identify Government Grant Scams
A common issue facing government grant applicants today is the problem of scams that appear to be real. It is important for you to know that federal grant agencies will rarely reach out to you, stating that you pre-qualify for a grant.
Additionally, any website or media outlet that refers to grants as “free” may not be trustworthy, and a posting that says “$7000 government grant” as the name of a grant, for example, should raise your suspicion. Rather, reliable sources will present a grant clearly with all potential costs laid out and the name of the agency providing it in the title.
Scams tend to use vague information to entice users to believe in an offer, so, if you are unsure of the legitimacy of a government grant, contact the Federal Trade Commission (FTC) or visit their website to better determine if a grant is legal.