Government Grant Types

There’s no such thing as a free lunch. Although, grants may seem like a free lunch, technically they are not. After receiving a grant from a government agency, the grantee is expected to meet the obligations required of him, which are submitting progress reports on the business or the charity-organization to which the grant was first used. The grantee decides how much money the agency will lend him – as long as it meet s the criteria of the Government agency. Money is non-taxable and interest fee. None of these programs require the grantee to submit a credit check, security deposits, collateral or co-signers. You can apply even if you are bankrupt or have a negative credit history. Anybody can do so, as long as you are over 18, a taxpayer and a US citizen.

These grants are classified into two kinds. The first kind is the general purpose or operating support grants. This occurs when the government agency bestows a grant to your organization that will be used to operate and support the general expenses in running your establishment. An operating grant is when the lender supports the organizations’ goal and invests in them to make the most out of the money that they lend you.

Second kind is program development or program support grants. This is when the government supports not only the procedures but also the processes in the progress of the campaign. These include the planned activities targeted to get positive feedback for its culmination.

If you would like to know the common kinds of project grants, here are some of them:

1.) Planning grants A good deal of money and time is spent figuring on a major new program for your company. Research whatever is needed, consult with the people involved, look on other activities you can do before you write a proposal for a planning grant.

2.) Start-up grants Also known as seed money, start-up grants assists an organization during its first couple of years. It is like a push for the business venture to do well without worrying about financial resources. These grants are often for more than a year and it decreases as each year pass. This is because the funder expects the company to slow get into its feet as time goes by.

3.) Facilities and equipment grants Also known as “brick and mortar” or capital grants, facilities and equipment grants assists the company to buy the physical asset for the establishment. These could be the building, the computers or the vehicle, for example. In the proposal of the applicant, he must defend his proposal for the acquisition he is requesting for. How will this help the company and be of service to his clients? Funders also require the applicants to make a report on their progress because they double check whether the companies are able to maintain these resources over time.

4.) Endowment grants Non-profit charities have money set aside that they use to invest and earn interest in the future. The principal sum remains untouched because they only spend the interest. These are endowment grants and are rampant with charities like hospitals and colleges. The fund-raising efforts for the benefit of hospitals and colleges start from these kind of grants. But the government makes sure that the interest of the principal sum or the endowment remains the same so that there is no need for the endowment to meet the annual operating costs.

5.) Program related investments or PRIs The IRS not only allow grants to foundations, they also permit them to make loans through the program related investments to non-profit organizations. The PRIs that have been approved are projects that met the requirements to be eligible for grant support. Usually, they are met at a low or sometimes zero interest. But because it is a loan, PRIs must be paid back by the organization. Often times, PRIs are the ones involved in the building project of charities.

Then there are also the grants for the individual person. An example of which is the popular scholarship grant. The difference between a scholarship grant to a scholarship loan is that there is no need for the student to pay for the former, as opposed to for the latter.

A student is obligated to pay back a scholarship loan, especially after he graduates. But a student’s only obligation when it comes to a scholarship grant is to meet the required grades expected of him and to also submit progress reports of his academic excellence. Look at it as the government funding for his education.

It is the government’s responsibility to provide us with what we need. As law-abiding citizens, we are required to do what is expected of us. That is the same with the grant. As soon as you received a grant from a government body, make sure that their investment on you will not be put into waste.