Government grant is a financial award given by the federal, state and local government for a beneficiary purpose. It is effectively a transfer payment. The government grants do not intake financial and technical assistance such as loan or loan guarantee, an interest rate subsidy, direct appropriation or revenue sharing. The grantee does not have to repay the money but the condition is to use the coney for larger good.
Government grants are given to art, science, and educational institutions to enable research and innovation. Government grants help fund the ideas of public services and stimulate the economy. For example, an economic program is run to strengthen theoretical and empirical economic analysis. Grants also help in the recovery of losses in various fileds such as agriculture projects.
Some examples of government grants are income tax holidays, investment tax credits accelerated depreciation allowances and reduced income tax. In order to get the transaction, the signature of government entity authority is mandatory.
How to get government grants
Government grants are not bestowed automatically, rather one has to apply for them. For example, a US citizen will apply through US grants commission. There is an official website for every country, for example usgrants.org is an official website to get grants in US. Moreover, when talking about government grants, they are not easy to get. They require a long process; it is tough and complex. It sometime takes years to go through the long paperwork process in order get government grants. The first and foremost step is to apply or it because they do not come on their own, it is you seek for them and not vice versa.
The application given to the state government authority to get grants is called a proposal. The proposal must include the unique idea and innovation of the project and how in future it will benefit the society or the community and provide benefit on a large scale. The proposals must be appealing; it must include specifications and validity after proper research and reason. To make these proposals up to the mark and convincing. Many people hire professionals, writers, freelancers who have a specialty in writing legal proposals. The fact that this is the most important part is because it is the first step towards getting a grant. One has to make sure to provide the best proposals. As they are not considered again and again.
Receiving government grant
Government grants are only given for purposeful reasons. They don’t include hidden costs or fees. They are outright gifts and not loans. However, they include stringent compliance and research to make sure that the grant is used for beneficial purposes. Any failure to accomplish the task is also submitted to a sponsor agency according to various deadlines.
Types of government grants
Government grants are not just limited to individuals or society but they have their specific places in startups and organizations as well. Government grants are provided in every industry. The process is challenging yet it is fruitful. Here are some of the common types of government grants that are issued through federal, state or local government authorization.
- General operating grants– General operating grants are the most flexible grants. These unrestricted funds can be used to cover overhead expenses and administrative costs for the business cycle and expenses from equipment to salaries. However, these grants are very rare so one as to be more specific with their ask. The request must be genuine and include valid reasons for grants.
- Program and project grant– These are the most common type of grants. They are restrictive in nature as they are given for certain programs and projects that run for welfare. The description of growth is mentioned in the program grants and how it will create a larger impact. Moreover, grant makers prefer these for grant makers mission and it is easier to evaluate the impact of grant reward.
- Capacity building grants– Capacity building grants are for institutional or interior development of an organization to expand their overall potential. By establishing and hiring staff and training. The purpose of these grants is to evaluate the effectiveness of staff for the growth of the organization. These are specifically for internal development and are restrictive.
- Capital grants– Capital grants are for new construction infrastructure and expansion of the existing one. The capital grants are also called brick and mortar grants. The specification is necessary. In which area expansion is needed and the purpose of newly built infrastructure it must be based on some purpose.
- Matching grants– Matching grants are usually given in the form of charity or public goods. They are paid in proportion to funds available from other sources. They designated funds from state or local government for a particular type of project. Various groups withing the community can develop a project proposal and go for this grant.
Importance of government grants
Government grants are non-refundable grants. The grantee does not have to repay the money but has to fulfil some purpose with it. These government grants are capable of increasing credibility. As getting a government grant is not easy it is challenging and complex and not everyone can get it. It increases the credibility of a person by overcoming all the hardships he/she has been through to get government grant which is prestigious. Moreover, they are widely available, there are so many available options to choose from they exist from across all the industries. As we discussed above, the various types of grants are capable of funding capital as well as welfare requirements.
The idea of government grants is to promote the larger good. The sole importance is given to the purpose for which you seek a grant. They are no less than achievements given by state or local government bodies. In addition to this government grants are successful in complimenting the innovations and creativity of the school and college students. For organizations they gave a boost to their startups and managerial techniques with solid training and equipment and last but not least for an individual they tended to increase their credibility.