Do you have an idea and a small business but need money to move forward? There are many avenues to go down to find funding but often government grants go untapped. Here's what you should know...
Federal government grants are created through legislation that is passed by the U.S. House of Representatives (a.k.a. Congress) and signed into law by the President. These grants are financed with taxpayer dollars and are available for a variety of purposes, depending on the type of applicant and the government agency. Currently, there are 26 Federal agencies that provide government grants.
Some grants are limited to a specific purpose, while others are more unrestricted. A government grant can be used as long as the funded activity does not directly benefit the Federal government. The Grants Policy Committee (GPC) is in charge of streamlining the activities for Federal government grants. The GPC works with the Office of Management and Budget (OMB) to establish financial assistance practices and oversee inter-agency coordination.
The amount of money you can get for a government grant varies based on the grantor, as well as what kind of applicant you are. The term “grantor” refers to the party that is providing the funding opportunity. It’s important to understand that government grants are not just “free money” — in fact, many grants require the recipient (or “grantee”) to provide matching funds or combine the grant with another type of financing (like a loan).
The Federal Grant and Cooperative Agreement Act of 1977 (FGCAA) defines a grant agreement as:
“ . . . the legal instrument reflecting a relationship between the United States Government and a State, a local government, or other recipient when— (1) the principal purpose of the relationship is to transfer a thing of value to the State or local government or other recipient to carry out a public purpose of support or stimulation authorized by a law of the United States instead of acquiring (by purchase, lease, or barter) property or services for the direct benefit or use of the United States Government; and (2) substantial involvement is not expected between the executive agency and the State, local government, or other recipient when carrying out the activity contemplated in the agreement.”
What Agencies Offer Government Grants?
There are currently 26 Federal agencies that offer government grants. They are as follows:
Agency for International Development (USAID)
Corporation for National and Community Service (CNCS)
Department of Agriculture (USDA)
Department of Commerce (DOC)
Department of Defense (DOD)
Department of Education (ED)
Department of Energy (DOE)
Department of Health and Human Services (HHS)
Department of Homeland Security (DHS)
Department of Housing and Urban Development (HUD)
Department of the Interior (DOI)
Department of Justice (DOJ)
Department of Labor (DOL)
Department of State (DOS)
Department of Transportation (DOT)
Department of Treasury
Department of Veterans Affairs (VA)
Environmental Protection Agency (EPA)
Institute of Museum and Library Services (IMLS)
National Aeronautics and Space Administration (NASA)
National Archives and Records Administration (NARA)
National Endowment for the Arts (NEA)
National Endowment for the Humanities (NEH)
National Science Foundation (NSF)
Small Business Administration (SBA)
Social Security Administration (SSA)
As you can see from this list of government agencies, there are a variety of categories for which Federal grants are available. These categories include (but are not limited to): agriculture, arts and humanities, business and commerce, community development, education, energy, environment, health, social services, science and technology, and transportation.
Who Can Apply for a Government Grant?
Many different kinds of organizations and groups are eligible for Federal government grants. Here is a breakdown of the main applicant types:
Individuals — While they do exist, there is actually a low number of government grants designed for individuals. If you qualify, you may be eligible for a minority grant, an education grant, or a housing grant. However, the majority of grants are designed for states, cities, universities, researchers, and non-profit organizations. If you are looking for personal financial aid, you can visit USA.gov or Benefits.gov to view your options for Federal assistance.
Small Businesses — The Small Business Administration (SBA) provides grants to educational and non-profit organizations, but it does not make Federal grants to small businesses. However, there are various business grants offered through state and local programs, as well as some non-profit groups. If you are not eligible for a government grant, you can look into the other types of financial assistance that Federal/state agencies offer, including programs for small business loans and venture capital financing.
Government Organizations — This includes state governments, local governments, city and township governments, special district governments, and Native America Tribal Governments.
Educational Organizations — This includes independent school districts, public and state-controlled higher education institutions, and private higher education institutes.
Public Housing Organizations — This includes public housing authorities, as well as Indian housing authorities.
Non-Profit Organizations — This includes nonprofits that have 501(c)(3) status with the IRS, as well as those that don’t.
For-Profit Organizations — This includes organizations other than small businesses.
To find a Federal government grant, you can visit Grants.gov.