Advantages & Disadvantages of Government Grants

by Fraser Sherman; Updated September 26, 2017
happy businesswoman holding contract

Government grants are available for everyone from artists to businesses to biochemists. Landing a government grant is a good deal as you don't have to pay the money back. Most grants are targeted in a way that's supposed to serve the greater good, whether by creating art or carrying out research. You can find a complete list of federal grants at the grants.gov website.

Degree of Difficulty

If a grant's worth applying for, you're probably not the only one competing for it. The paperwork is often complex and you must make a compelling case that the money will benefit the community, not just you. Drawing up a good proposal is so challenging that some freelance writers specialize in writing grant proposals for others. A business or non-profit that meets some public need has the best shot. It's usually a lot harder for individuals to land a grant.

Bigger Is Better

While many organizations offer grants, few have the resources of the federal government behind them. For some big projects, government grants may be the best funding source available. Grant money isn't taxable and, as it isn't a loan, you don't have to worry about a bad credit score disqualifying you. You may have to max out your own financial resources before the grant money kicks in, but after that you can look to the government to help your project stay afloat.

Red Tape

Keep in mind that the government doesn't just cut you a blank check and forget about it. Even a grant for a writing fellowship requires you submit reports detailing how you've spent the money and your major accomplishments during the grant period. A charity or nonprofit organization faces an even larger pile of paperwork. You also have to abide by any restrictions on how you use the grant money, which can become intrusive and frustrating.

Taking You Seriously

Because grant funding is so competitive, winning a grant is proof your group or project has some substance to it. Landing a government grant is a good sign to other donors that your project is worth investing in. If you're a non-profit, the government itself may be more inclined to listen to your views on policy after giving you money. The government sometimes helps grant recipients network with each other, offering you a chance to meet the big names in your field.

Resources

About the Author

A graduate of Oberlin College, Fraser Sherman began writing in 1981. Since then he's researched and written newspaper and magazine stories on city government, court cases, business, real estate and finance, the uses of new technologies and film history. Sherman has worked for more than a decade as a newspaper reporter, and his magazine articles have been published in "Newsweek," "Air & Space," "Backpacker" and "Boys' Life." Sherman is also the author of three film reference books, with a fourth currently under way.

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