Government grants are a widely used source of funding for various organizations. In this day and age where we are struggling to revive our economy, government grants are an integral part of the solution as they can provide economic stimulus by assisting with education and skills development, health care and supports as well as small business development. These areas are known to support economical growth and development as they create educational and business opportunities, new job creation and reduce the strain on social assistance by activating individuals and permitting them to retrain and remain in the work force.
Government grants also have the ability to enhance the quality of the workforce by addressing specific deficits in skill sets or industries which are required for a healthy economy. For instance, if the Government ascertains that there is a shortage of medical technicians or qualified nurses in the United States, it may address that problem by allocating funding to stimulate education in the field of nursing. In that way it can direct stimulus to specific social or industrial needs appropriately.
What is a Grant?
A government grant is monetary assistance that is funded by your tax dollars, disbursed from a government agency and is given to a recipient, normally a non-profit entity, educational institution, business or an individual. These grants are most often used to fund specific projects that relate to public support or stimulation of some kind and are guided by stringent rules and regulations as there is always a purpose or motivating factor authoring the grant.
A government grant is not a loan and does not require repayment. It is a gift or endowment that is awarded to a deserving individual after establishing the criteria and eligibility. The guidelines for meeting eligibility may be based on ethnic background. It can be based on innovative research and development, physical or cognitive disability, small business enterprise, technical skills or commerce.
The system of funding and bestowing grants is essentially a “trickle down” effect where the government budgets for spending in particular sectors which require improvement or development. The funding is then provided to local agencies for administration and then placed in the hands of individuals who will take the investment and create returns for their local community, state and country by proxy. It is estimated that the United States Federal Government gives away more than $50 billion dollars annually in the form of grants and funding.
Who Provides the Grants?
Grants are funded from several different sources, both private and government provided. Some types of grants are provided solely by the government and the funding for these grants is mandated by the Federal Budget with appropriate allocations to agencies which provide employment, social or medical supports to various populations. The government also provides business partners with the opportunity to provide grants and endowments as well or to “match funds” to make the benefit of specific programs more far reaching by increasing the amount of funds available to be dispersed. Government departments are just one of the entities that award grants and there are over one thousand federal grants which are awarded in 21 categories from 26 different government agencies .
Additionally there is also a broad network of public and private trusts or foundations which are also sources for this type of funding such as charities, educational institutions and businesses, as well as private individuals who receive government grants to disperse to more local populations at multiple levels of administration. The government awards larger grants to these organizations relying on them to assist with the task of examining needs at a personal or case-by-case level to ensure that those in need are receiving the appropriate available supports.
Who is Eligible for a Grant?
It is unlikely that an individual will receive a grant directly from the Federal Government. Can you imagine how time consuming it would be for the United States Government to process grant requests directly? It would be costly and counterproductive for the government to administer support funds in this way. Thus the process is to provide the funds to branches or agencies for administration. These agencies help the government to deliver the funds where it will have the most impact regionally and benefit the greatest number of individuals.
If you are an organization or non-profit agency and seeking grants or funding from the United States Government, determining eligibility is the first step to investigating the availability of funds for your purpose. An excellent resource is Grants.gov which lists the following groups as eligible for government grant funding:
- Government organizations such as State, local, city or township governments, special district governments and Native American Tribal governments both federally recognized and other, are eligible for grants.
- Educational Organizations, meaning Independent school districts, public and state controlled institutions of higher education (such as public colleges and universities), and Private institutions of higher education (private colleges and universities) would all fall under this category.
- Public Housing Organizations, including public and Indian housing authorities.
- Non-Profit Organizations, which are broken down into two categories; those that have 501(c) (3) status with the IRS, and those that do not.
- For-Profit Organizations, with the exception of small businesses; and,
- Small Businesses.
Keep in mind that belonging to one of these sectors does not imply that you will be chosen or that you immediately qualify as an organization. There are other criteria including industry or sector, as well as population density (area and number of citizens served through the agency) which impact the decision to endow funds. The intention of the funding or the program prospectus is critically important as the government has organized specific percentage funding to a variety of sectors in planning the annual budget. A specific allotment is set aside for each sector but the reason and intended use of the funds is the critical deciding factor.
How to Apply for Government Grants
Applying for Government grants can seem somewhat intimidating. If you find the grant that you are interested in, the details regarding the application process are somewhat intimidating on the onset. There is a very specific process that needs to be followed in order to attempt to obtain government grants. The process usually begins with providing some very detailed information in the form of a grant package. The specifics are always conveniently detailed at the bottom of each publicized grant opportunity and failure to apply in the correct manner will result in a disqualification of the application in whole. With so many organizations applying for grants, it is important to thoroughly review the information contained in the grant package and follow the application procedure carefully.
In order to properly fill out the grant package you will need to assemble the following information:
- DUNS Number; if your organization doesn’t have one, you will need to apply for one at Dun and Bradstreet
- Make sure that your organization is registered with the Central Contractor Registration (CCR) at http://www.ccr.gov. This information is necessary for moving on to the next step in the process and you cannot move forward without it.
- Make sure you are registered at Grants.gov and have your username and password handy.
- You will need one point of contact for your organization.
Grants for Small Business
According to Census data in 2008 there were 29.6 million businesses in the United States but 99.9 percent of the 29.6 million businesses employed fewer than 500 employees. Therefore it is easy to understand why the Federal Government would wish to allocate funds to promote and support small business development. The Office of Advocacy reported that there were only 18,000 corporations or large businesses in 2006.
There are many grants available for all different kinds of businesses. Again, these grants are funded by the Federal Government but are administered by state and local programs, non-profit organizations and various other entities at the community level. Some grants have a “matching” requirement or other sort of personal financing benchmark in order to be eligible, so they are not necessarily “free money,” but a supplement to help get your business started.
The best place to start looking is definitely the US Small Business Association (SBA). Not only can they help find information on grants, they also provide some very helpful information on starting a small business in general making them an excellent resource for new entrepreneurs. Finding an available grant or browsing different endowment opportunities is very easy using the grant search tool provided by the SBA. It is an excellent resource that provides a summary of all available small business grants in one location. They also provide small business loans at economical interest rates as part of the small business stimulus.
ITA Special Projects provides assistance to varied organizations as stated by Congress in order to expand exports and to promote job creation by providing small-medium sized businesses with export assistance to specified overseas markets. The intention of this program is to stimulate exports and create new business development partnerships internationally.
To assist various organizations identified by Congress to expand exports; to promote job creation through projects designed to provide small-medium sized businesses with export assistance to specified overseas markets.
Grants for Women
The United States Small Business Administration (SBA) has a specific department allocated for the support and funding of business initiatives for women. The “Women’s Business Center Grant Opportunities” provides comprehensive information on the web including white papers on grant application and preparation, eligibility and a listing of available grants and criteria. There are numerous alternative opportunities for supportive funds for female business owners including loan which “match equity” or investment (literally doubling the female entrepreneur’s venture capital).
An excellent resource is the National Association of Women Business Owners (NAWBO) which provides resources and networking as well as information and supports for women in the business sector. According to the statistics published by NAWBO “Three quarters of all women-owned businesses are majority owned by women (51% or more), for a total of 7.2 million firms, employing 7.3 million people, and generating $1.1 trillion in sales” in the United States each year. As such the Federal Government is dedicated to providing grants and funds which help create new jobs by the rapid growth of small and medium sized businesses owned and operated by American women. It has established that the tangible return on investment in small business (particularly female owned enterprises) nets a very predictable improvement in the economy and much needed job creation.
There are a several different agencies that can help women find funding and loans for their small business, depending upon the type of business they are contemplating:
- The SBA, as mentioned above, can help guarantee loans for up to $75,000 for a small business by working in conjunction with your local bank. One of the programs offered is called the LowDoc program. Its application process is much easier than that of a traditional business loan and can fund up to $100,000. These loans require a business plan and collateral. The most typical business start up loan from the SBA is the Microloan which is a loan under $25,000.
- SEED Programs, or Self-Employment and Enterprise Development Programs, give unemployed workers a chance to start their own businesses by proving loans for them. Instead of them collecting unemployment, they are given training and counseling as well as other types of guidance in order to make their new business a success. These programs are not widespread and are only available in a few states. Contacting the local state government office or the US Department of Labor in Washington, DC is probably the best way to find more information.
- Small Business Investment Companies (SBICs) are private organizations that are sponsored by the SBA. They make investments and provide funding to small businesses.
- The State Economic Development Agency provides small amounts of money and venture capital specifically tailored for small businesses (with an organizational preference for businesses owned by female entrepreneurs). Information varies by state and is available through by accessing individual program sites for availability and criteria.
- Small Business Development Centers (SBDC) are yet other great resources for funding and general assistance with entrepreneurship. They are generally found on university and junior college campuses.
Government Grants for Education
Education is a long held source of funding for the Federal Government with multiple grants provided to educational programs for a variety of purposes. Funding is provided for schools and colleges and universities to maintain and improve facilities, for technology improvements and for social programs. Many States also provide basic programs such as nutritional lunches for under privileged children in an effort to contribute to their scholastic success and well being.
Many grants for education are not viewed by the public (although they are a matter of public record). The grants are applied for by the regional education administration and provided to schools for approved programs. Part of the grants are provided for the basic functioning of the school and another portion of education grants are provided for programs and incentives which are deemed important depending on the requirements in that region.
Some educational grants are provided for scholastic achievement. Again as with the archetype of all grants and government funding, the incentive is to inspire students to achieve success in secondary and post secondary settings. The government also uses educational grants to draw attention to specific sectors which require more active entry into the workforce. Engineering and Pharmacy, Physicians and technical professionals are supported by a plethora of grants designed to encourage enrollment in the specific program areas, creating new jobs and a supply of future employees in important industrial fields.
One of the more common educational grants is called the Pell Grant. The Pell Grant does not have to be repaid and has a maximum award of $5,500. The amount awarded to any student is determined by the student’s financial need, their cost to attend school, including tuition and room and board, their status as a full time student and the length of time they are planning to attend school that year. A student can receive two Pell Grants per school year and are applied for through an application processes by filling out the Free Application for Federal Student Aid or FAFSA.
The Benefit of Government Grants
Government grants are a necessary business tool which provides support and growth to important sectors of the American economy. While the process may seem to be complicated it is tailored to efficiently provide funding through channels for the realization of tangible benefits in regional areas. Grants are in incredible resource and an opportunity that every individual in the United States has the chance to benefit from personally or professionally.
With more than $50 billion dollars per annum provided by the Federal Government in funding, it simply requires an understanding of the overall process and adherence to the guidelines to take part in programs that not only provide personal benefit, but those which contribute to the health and betterment of the economic health of the United States of America.
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