Does the government give out random grants? Well, the government does not call or notify individuals to award grants if there has been no registration or application. Every time the government offers a new grant, it comes with new requirements. Therefore, the government does not give out random grants to any individuals.
Government grants are available, provided by a federal, state, or local government authority. It is a beneficial project for individuals to get a financial award.
There are so many ways for the government to give grants. For example, it can be a transfer payment. If you get a government grant, it is because you are eligible, and you do not necessarily have to repay the cash to the government.
What you can do is use the funds for the right purpose, depending on the types of grants you get. There are about 26 federal agencies that provide more than 1,000 grant programs per year. The goal is to provide funding for different purposes. It can be for the arts, scientific projects, or educational institutions.
The reasons why the government gives grants are below:
- To fund ideas and projects that support public services and strengthen the growth of the economy.
- To support crucial recovery initiatives, to support the agricultural project, and innovative research.
The government does not give out grants randomly. So, if you apply for a grant and you cannot get it, there must be some qualifications that you cannot meet.
How the Government Grants Work
Does the government give out random grants? No, you must apply for a grant to get it. Besides, you have to prepare everything during the application because the process is very competitive.
Additionally, federal government grants are authorized. Congress plays a big role here to pass the federal government grant and the president will sign it. As you know, many agencies will run the grants under the instructions of the government. For example, there is a Small Business Administration (SBA) that distribute grants for non-profit organizations, especially in counseling and training programs.
For federal grants, there are three main periods to know: pre-award, award, and post-award.
The pre-award period means that the government will announce the opportunity of the grant in the package. It is known as RFP (Request for Proposals) or RFA (Request for Applications).
In this period, you need to apply for the federal grant by reviewing the guidelines in the RFP. After that, you can complete and then apply. There will be a funding agency to evaluate your application and decide on the eligible participants.
In the award period, it means the government will give you a notification whether you receive the funding and start your proposed program.
It is the post-award period when your non-profit starts the proposed program. In this period, you must report the progress, the achievement, the expenses of the funds, and the way you end the program.
The pre-award period generally goes 30-90 days for the government grant application. Each agency and the available grant has a different evaluation period.
Types of Grants
Generally, any grant you apply for is going to be one of the options below:
It is one of the most popular types of grants. It means that you will get that funding only to support the project or program in your proposal.
For instance, you have an environmental organization with a recycling campaign per month. But, you want to write a grant to develop a new program, after school, to teach elementary school students about the dangers of pollution.
So, you may get funds only for that program. You cannot use the funds for other operations. This type of grant is very restrictive. The government can restrict the amount you use for administrative costs.
On the other hand, this grant is very straightforward. It means that it is easier to write the grant proposal for this type of grant since you can make a very specific proposal for your program.
General Operating Grants
What is your feeling when your parents let you choose any snacks you want to buy? Well, it goes the same when you want to apply for general operating grants.
The government will give you the freedom to choose where it is best to spend your award. You can call it unrestricted grants to give your organization the choice about using the money for necessary things. The goal is to make sure that you can keep the organization running. For example, you can use the fund for salaries, administrative costs, or different program areas.
Capacity Building Grants
It is available for startups or nonprofits. What you must do to prove your worth to the government when you build your programs.
As a startup, you cannot avoid the needs of accounting, marketing, grant writing, strategic planning, evaluation, program development, and other lists. The fact is you cannot handle those things by yourself.
You need your staff, board, or volunteers to run your organization. Also, you need outside help, sometimes. But, outside help means that you need to have more finance.
In this case, you can use the capacity-building grants to help you pay for outside help. The grant is available to help you concern with developing your startups with funds for services and activities. It means that you can use the money for an HR consultant, training program, leadership coaching, and others. This fund helps you a lot when you want to upscale your skills to grow your organization.
For a non-profit, there will come a moment to bring things to a higher level. It can be when you have to buy or renovate a building, buy land, and buy a big amount of equipment. These things are capital purchases.
Maybe you have heard about the term capital campaign. It is a giving campaign where non-profits want to raise a big amount of money.
From the campaigns, funders can offer large-scale grants to help these organizations to accomplish their goals. This type of grant is only for established non-profits or non-profits with deep impact.
Foundations can apply for endowment grants. Organizations collect a big amount of money, which is about 20 million dollars in the bank. They use the interest to fund various programs.
This is a strategy to start having stable savings to ensure that you will always have a stable source to operate funds. Many foundations use this way to operate their money. They have many dollars saved this way and then they give away the interest.
Besides, some non-profits go with this same practice and start their endowments. For example, colleges and universities may provide endowment funds.
Even though this kind of grant is rare, one of the great examples goes to Bennett College. They completed their campaign in 2019 to raise money for their endowment grants.
This grant is a non-monetary gift. It can be available at different times, with materials, supplies, volunteers, space, technical assistance, and more. Many corporate grants have a big commitment to donate their leftover materials or donate their employees to non-profits.
It means that the grants are not in form of cash. To get in-kind grants, you need to search for local businesses that offer materials or other services. Mostly in form of a donation or formal grant process. The highlight is that they do not give money.
Of course, other grant types are not relevant to non-profit organizations. When you want to apply for those grants, the concept is the same. You still need to write a grant proposal.
For example, you want to apply for grants to complete your dissertation as a researcher. Or, you may need grants to collect rainwater as homeowners.
Each one of those grants is for specific needs. Therefore, it is important to recognize first what type of grant you are working on. This way will help you plan the grant application accordingly.
To apply for a government grant, means you have to deal with complex paperwork and describe the benefit of the funds to your community or the public. Hence, you must have a convincing proposal and it is not easy that you need to hire a professional writer for help.
Government Grants: Advantages and Disadvantages
When you want to get a government grant for your non-profit, it is important to know the advantages and disadvantages. Here are some advantages to get a government grant:
- Government grants provide large amounts of money. You can use the award to strengthen your organization’s programs.
- The government grant provides program and organization stability. Usually, it is available in a multi-year.
- Getting a government grant improves your business reputation. It also helps you get secure funding from extra sources in the meantime.
Here are some disadvantages to apply or get a government grant:
- If you want to receive government grants, you need a lot of staff time. It is because the government does not provide random grants. You need to meet the application requirements. It means you also need time to prepare, work together, and provide the right documents.
- Getting a government grant also means you need a lot of staff time. Your non-profit organization has to track the funding, collect the program data, submit the reports frequently, and prepare for audits.
- The guidelines show high compliance standards. Therefore, make sure that the internal processes of your non-profit organizations can meet several accountability benchmarks.
Government Grants for Non-profit
If the answer to the question “does the government give out random grants” is a big NO, applying the government grants can take a lot of your time. However, it can be a rewarding venture for your non-profit organizations. The next question is how can you know that it is the right time to get one?
If you want to know the grant readiness for your non-profit, you can ask the following questions for your internal procedures:
- Before the government grant application, there are several logistical kinds of stuff your organization must have. For example, you need to request a DUNS number and registered Grants.gov and Sam.gov. Even if you need more registration, depends on the government agencies that offer the grant for your non-profit.
- When you want to apply for a government grant, be sure that your organization can do so. It is because you need the staff time to follow each step of the grant cycle, review the RFP, develop the program model, create the financial budget, and build good communication with the community partners for more support.
- Financial audits, key staff resumes, and organizational budgets are some examples of documentation that most government grants ask you for. Therefore, make sure that you have those documents on standby. Prepare these documents in advance to help you focus on the application.
- When you think of internal procedures, make sure that your non-profit can collect and measure the data. Otherwise, you may need a consultant to evaluate the program.
- When you receive the government grant, your non-profit organization must have the staff and the internal controls. Their role is to manage the grant budget during the implementation of the program. It is because you must provide a report on the spending of the government grant.
Ways to Get Government Grants
There are some financial assistance programs provided by the government. You can use it for child care, a house down payment, or utilities if you are eligible.
There are federal and state grants and loans for people who are struggling to create financial needs. Even though the grants are not free money, these tax-payer-funded programs help individuals and families pay for expenses. It can be groceries, utilities, college tuition, a down payment, and others.
Each program has qualifications, mostly income-based. If you are looking for the answer to “Does the government give out random grants?” because you need financial support, better trying for these ways:
The Low Income Home Energy Assistance Program supports low-income households to cover cooling and heating bills. The grants are available via states. The funding is from the Department of Health and Human Services. The eligibility requirement is different from one to another states, including the income requirement. Therefore, you can apply for this grant near your state.
The Lifeline Program
Have you heard about this program before? The Lifeline program provides discounted internet or phone service. You need to meet their particular eligibility requirements to receive the award.
SNAP or the Supplemental Nutrition Assistance Program is available for families. One of the requirements is income level. It is also a state grant that will let you get benefits for each month if you are eligible. You can use the benefit via Electronic Benefits Transfer, called EBT card. It is like a debit card that you can use in certain stores.
The Child Care and Development Fund
One of the major expenses for families is Child care. If you live in Mississippi, then you will know that the cost of infant care per year is from $5,000. Meanwhile, for the citizens in Washington D.C., you will need more than $22,600 for the same expense. This data is based on the Economic Policy Institute, a non-profit organization concerned with low- and middle-income workers.
So, the Child Care and Development Fund helps decrease the burden on low-income families. The U.S. Department of Health and Human Services administered the grant for the states, territories, and tribes. The money will be distributed to eligible families to help them pay for the childcare center.
Since it is an income-based grant, the requirement is only to support care for children under 13. You can start by finding the contact of the Child Care and Development Fund in your state.
Get Unclaimed Money
Unclaimed money is not a government grant. 1 in 10 Americans gets unclaimed money based on data from the National Association of Unclaimed Property Administrators.
Unclaimed money means a long-forgotten deposit, unclaimed life insurance, uncashed paycheck, or lost saving bonds.
When companies have an old address and they cannot locate the owner of the unclaimed funds, then the money will be turned over to the state. You can visit unclaimed.org, an affiliated site with the National Association of State Treasurers to find information if you have unclaimed money.
Also, there is over $2.8 billion in 2020 for unclaimed property. The average claim payment reaches $1,600.
Down Payment Assistance
Not all people can afford a down payment when they want to buy a new home. So, if it happens to you and you need help, you can start using down payment assistance.
This type of grant and loan supports you to cover the upfront cost of buying a home. For instance, in Nevada, eligible prospective homeowners can pay a fee and get a grant for about 5% of the home loan value. This grant can be put toward a down payment or closing costs. This aid is not reserved for low-income prospective homeowners.
If you apply for Nevada’s grant program, this government loan is available for borrowers with an income under $105,000 per year. So, you should check your eligibility.
Tax Credit For Health Insurance
HealthCare.gov is a government marketplace for anyone who needs health insurance. It is possible if you are eligible for a credit toward the insurance premiums. By finding tax credits for your health insurance, the government will help you pay the premium tax credit to your insurance service provider, reducing the payments per month.
Does The Government Give Out Random Grants for your tuition cost? No. But you can try The Federal Pell Grant. It helps a lot when you have an issue to pay for your college. If you are an eligible student, you can get more than $6,495 of the Pell Grant in 2022-2023. The exact amount is available based on some factors such as financial need, enrollment status, and the cost of attendance.
To apply for this grant, you can complete the Free Application for Federal Student Aid (FAFSA). Besides, you can use this application to qualify for many institutional or state grants and scholarships.
Not only FAFSA, but you can also try for other federal college grants as below:
- The Teacher Education Assistance for College and Higher Education Grant
- The Iraq and Afghanistan Service Grant
- The Federal Supplemental Educational Opportunity Grant
Also, you can look for scholarships by using the search tool provided by the U.S. Department of Labor.
Does the government give out random grants? No. the government does not contact you or any individuals to get grants if you never send an application. The federal government does not provide grants or free money to any individuals to cover personal expenses or to start a business. If you find websites or publications that provide free money from the government, we can safely say that these are scams.
If someone contacts you and says that you get a government grant, it can be a scam. Do not give your private personal data including your Social Security number, your bank account number, and other personal information.
The federal government provides hundreds of billions of dollars for grants. They allocate the fund to the state and the local governments per year. So, the government does not contact you directly. If you are eligible for the grants, you will get help to solve financial problems such as health care, social services, education, and others.
The presence of the government grant is financial assistance as the sign that the government is concerned with the eligible entities with projects or ideas that support and strengthen public services and the growth of the economy.
Does The Government Give Out Random Grants? If you get a grant from a real government agency, they will not ask you to pay a processing fee for a grant. Specifically, government agencies and their employees never want people to use a prepaid debit card or wire money to pay anything for processing grants.
PS: For Muslims, please avoid loans with interest rates. It’s Riba!!
- What are the different types of grants?
- How a Government Grant Works, How to Apply, With an Example
- 6 Ways to Get Financial Help From the Government
- How Do Government Grants Work? What You Need To Know