Where Do Grants Come From?

We often hear a lot about grants, but have you ever wondered where grants come from exactly? A grant is a financial donation from an organization for projects that align with its mission. Thus, the organization that awards these funds is referred to as the ‘funding source’ or the ‘grantmaker.’

There are three primary funding sources:
  1. Government bodies — Federal, state, and local governments
  2. Foundations — Private foundations, public charities, or philanthropic organizations
  3. Corporations — Forprofit businesses

Government grants come from collection and taxes. Subsequently, grants from the federal government are authorized and appropriated through bills passed by the official channels. Approximately 61 percent of government grants are dedicated to health care, 16 percent to income security programs, and 9 percent each to transportation and education, training, employment, and social services. Thereafter, a popular example of a government grant is the Pell Grant. This grant is for undergraduate college students to help with education costs. 

Foundation grants receive funding through donations, wills & bequests, fundraising, earned income, and memberships. Accordingly, the foundation’s board of trustees is the group ultimately responsible for the foundation. This includes decision making such as where the money goes. On the contrary, if a benefactor bequests a donation to a foundation, the trust deed might express that the money must go toward a cause that the benefactor felt passionate about. A popular example of a foundation grant is the Research Scholar Grant by the American Cancer Society.

Corporation grants come from the profits of a business or company. These grants are part of the company’s need to build and maintain a positive reputation and remain in good standing with the community. For example, many corporations would not fund projects or organizations that might not sit well with their shareholders, staff, or customers. A popular example of a corporation grant is the FedEx Small Business Grant, a contest awarding unique and innovative small businesses.

What happens when you receive a grant?

Grants aren’t just bestowed — you must apply for them. Getting a grant is also an extremely competitive process, and there is never a guarantee that you will win one. Furthermore, the paperwork can be complex and applicants must describe how the funds will benefit the local community or the public at large. Crafting a convincing proposal is so challenging that applicants often hire professional help.

When you receive grant money, your organization will be in contract with the grantmaker. While grants are “free money,” they will often have a series of conditions attached to them. The grant conditions will be the terms of that contract, and your organization will be under a legal obligation to comply with them. Additionally, failure to abide by these conditions may result in the grant being rescinded and you may even face legal action.

These conditions may involve things like:

  • Using a separate bank account to manage the funds
  • Report on how you spend the grant money
  • Projections and accomplishments of milestones
  • What you must do with any unspent funds
  • Any insurance, confidentiality, and privacy requirements
  • How often you must report to the grantmaking organization
  • As well as regular reports and audits on request
Where can you find grant funding? 

The majority of grants are for nonprofit organizations, government agencies, municipalities, and townships, as well as schools, IHES, and students. There are also grants available for small businesses and other individuals (such as artists, researchers, teachers, etc), but they make up less than 30 percent of all available grants.

While locating government grants can be easy, it can be very difficult to locate grants from foundations and corporations. Up to 90 percent of foundations don’t publicly list their grants. What’s unique about GrantWatch.com, is that its grant listings include all funding sources — saving you days, weeks, or even months, of research! More than 70 percent of the GrantWatch database includes grants from foundation and corporation funders. The remaining 30 percent is from government sources. 

Grants

5,000+ grants are currently accepting applications from nonprofit organizations, schools, and municipalities.
1,000+ grants are currently accepting applications from small businesses (for-profits).
1,500+ grants are currently accepting applications from individuals (researchers, scientists, artists, students, teachers, veterans, etc).

MemberPlus+ subscription is required to view the full grant details, including the eligibility criteria and application information. For more information, you can also visit the GrantWatch FAQ page. 

One thought on “Where Do Grants Come From?

%d bloggers like this: