Federal grant: Definition and Links by Encyclopedian.com

In the United States Federal grants are economic aid issued by the United States government. Grants may also be issued by private not-for-profit organizations such as foundations, not-for-profit corporations or charitable trusts which are all collectively referred to as charities. Outside the United States grants, subventions or subsidies are used to in similar fashion by government or private charities to subsidize programs and projects that fit within the funding criteria of the grant giving entity or donor. Grants can be unrestricted, to be used by the receipient in any fashion within the perimeter of the recipient organization's activities or they may be restricted to a specific purpose by the benefactor[?].

Project grants are awared competitively. Project grants are the most common form of grant and a large number are found in education, social services, the arts and health care.

Formula grants provide funds as dictated by a law. See: Aid to Families with Dependent Children[?], Job Training Partnership Act[?], Work Incentive Program[?]
- Categorical grants may be spent only for narrowly defined purposes and recipients often must match a portion of the federal funds. 33% of categorical grants are considered to be formula grants. See: Head Start[?], Urban Forestry Assistance[?], Asbestos School Hazards Abatement[?]. About 90% of federal aid dollars are spent for categorical grants.
- Block grants combine categorical grants into a single program. See: Community Development Block Grant[?], Alcohol, Drug Abuse, and Mental Health Services Block Grant[?]. Recipients of block grants have more leeway in using funds thas recipients of individual categorical grants. All block grants are considered to be formula grants.

Federal and State grants frequently receive criticism due to what are perceived to be excessive regulations. These criticisms include problems of overlap, duplication, excessive categorization, insufficient information, varying requirements, arbitrary federal decision-making, and grantsmanship.