What Is a Government Grant?

Fire station in a small town in American Midwest image by Alexey Stiop from Fotolia.com

Millions of dollars in government grants are awarded annually. If you listen to the TV pitchmen, anybody can get a grant for pretty much anything. "Don't buy the hype," says Grants.gov, the federal clearinghouse website for all federal grants. The government only gives grants for very specific things and not for startup businesses or paying off your electric bill. Here's what government grants are.


Government grants come from 26 federal agencies and numerous state, county and city government agencies and departments. Governments accomplish much of their purpose by giving funds to nonprofits and by contracting with for-profit businesses to do work that the government wants done in the public interest. It disperses money to various departments and agencies with responsibility for various segments of the nation's interests such as commerce, defense, energy, transportation, agriculture, health and human services and the arts.


A grant is disbursement of money to a qualified and selected recipient that will deliver goods, services, programs or infrastructure for purposes the government has decided are in the public interest and within the responsibility of the government to ensure are delivered.


The 26 federal agencies that disburse grants release requests for proposal (RFPs) several times a year. RFPs are complete announcements of the terms and purposes of the offered grant and links to complete application packages with instructions. State and local agencies also release RFPs as funding becomes available or in accordance with a predetermined schedule.


To find a government grant requires a diligent search of government printed grant announcements or websites. Federal grants are announced through Grants.gov, the federal government's grants clearinghouse, and also posted on the agency's website, the Catalog of Federal Domestic Assistance (CFDA) or the Federal Register. Grants.gov has a free email newsletter that sends you RFPs in your areas of interest as they are announced. States frequently have grants alerts newsletters you can sign up for as well. Local grants are announced in newspapers and on their websites. It helps to build an ongoing relationship with people within local agencies to receive heads-up alerts of upcoming grant opportunities.


Governments give grants in order to address needs that the public has that can be best met by collective action by the appropriate government entity. If, for instance, a county needs a road, the county will have to allocate funds to build it. For city streets, the city will allocate funds, unless the street is also a state highway. Interstate highways receive federal funding. A government formula grant is often issued by a larger government entity to a smaller one to help it pay for things like health care, human services and education--services that are better managed at the local level. Governments do not give grants to for-profit businesses or individuals except in cases where the individual can deliver research, new science and technology or educational services not available through the nonprofit sector.