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The Truth About US Government Grants

No Free Lunch

By

Excavation of a cobblestone street
Maria Jauregui Ponte/fStop Images/Brand X Pictures/Getty Images

Contrary to what books and TV ads say, the U.S. government is not giving away "free grant" money. A government grant is not a Christmas present. According to American Government & Politics, by Jay M. Shafritz, a grant is, "A form of gift that entails certain obligations on the part of the grantee and expectations on the part of the grantor."

The key word there is obligations. Getting a government grant will get you loads of them and not fulfilling them will grant you a load of legal troubles.

Few Grants for Individuals: Most federal grants are awarded to organizations, institutions, and state and local governments planning major projects that will benefit specific sectors of the population or the community as a whole, for example:

 

  • A neighborhood street paving project
  • A state-wide program to re-train displaced workers
  • A project to attract new businesses to a depressed downtown area
  • A regional water conservation program
  • A state or county-wide flood control project

 

Organizations that get government grants are subject to strict government oversight and must meet detailed government performance standards during the duration of the project and funding period of the grant.

All project expenditures must be strictly accounted for and detailed audits are conducted by the government at least annually. All granted funds must be spent. Any money not spent goes back to the Treasury. Detailed program goals must be developed, approved and carried out exactly as specified in the grant application. Any project changes must be approved by the government. All project phases must be completed on time. And, of course, the project must be completed with demonstrable success.

Failure on the part of the grant recipient to perform under the requirements of the grant can result in penalties ranging from economic sanctions to prison in cases of improper use or theft of public funds.

By far, most government grants are applied for and awarded to other federal agencies, states, cities, colleges and universities, and research organizations. Few individuals have the money or expertise necessary to prepare adequate applications for federal grants. Most active grant-seekers, in fact, employ full time staffs to do nothing but apply for and administer federal grants.

The plain truth is that with federal funding cutbacks and competition for grants becoming more intense, seeking a federal grant always requires a lot of time and potentially a lot of money up front with no guarantee of success.

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