Free Money Through Grants: Fact or Fiction?
It's posted all over the Internet. You hear it on the radio, and
see it on television. The United States government is giving
away free money in the form of federal grants. While it's true
that the government does indeed award $400 billion annually
through its 26 federal entities, the statement of free money
through the government doesn't exactly pinpoint the definition
of a federal grant.
A grant isn't a gift or a free-for-all giveaway. It also doesn't
mean that if you've been awarded a grant, you've won the
lottery. According to American Government and Politics by Jay M.
Shafritz, a grant is "a form of gift that entails certain
obligations on the part of the grantee and expectations on the
part of the grantor." The key word in this definition of the
word is obligations. Getting a government grant will get you an
unbelievable amount of obligations, and not fulfilling your
obligations will, in turn, grant you legal problems.
The majority of federal grants that are awarded are the farthest
thing from being considered free money. Grants are most often
awarded to organizations planning major projects to benefit a
community. It could include money to be used for repaving
streets in a city. A grant could also be awarded for a nonprofit
organization featuring an art exhibit or musical performance.
Grants are also awarded for technological research,
conservation, and flood control projects. While there are other
sources that are awarded grant funding, in general, the free
money aspect is lost, and individuals, in general, are not
qualified for most grants other than those used for educational
purposes such as to pay tuition bills for higher education.
Businesses can also tap into the federal grant program, but only
by meeting strict criteria through the government agency
offering the grant, such as if grant funding is available for
research in a particular area that is of specialty to that
business.
Once the free money is provided through the grant, the
organization that has been awarded the free money must keep
careful track of all project expenditures. Organizations that
are awarded free money must be prepared for detailed audits,
which will be conducted by the Federal government annually or
more often. Any money not spent and accounted for goes back to
the United States Treasury, and is not extra free money for the
organization. Detailed program goals must be developed,
approved, and completed by the organization exactly as specified
in the grant application without exception. Any unforeseen
project changes that occur along the way must receive prior
approval by the government agency that awarded the grant. All
project phases must be completed as planned, and even more
importantly, completed successfully and on time.
The free money offered through a grant program can lead to
financial and legal disaster to an organization that does not
abide by the strict rules that the grant holds. By failing on a
part of the obligation agreed upon when the grant is approved,
the organization and/or persons in charge are held accountable.
Penalties can range from economic sanctions to prison in the
instance of improper use or theft of this free money.
The majority of grants, or free money, that is requested is
applied for and awarded to other Federal agencies, state
governments, city governments, colleges, universities, and
research organizations and businesses. Few individuals have the
money, time, and expertise necessary to prepare adequate
applications that are awarded free money through federal grant
funding. Most active grant seekers, such as universities, employ
full-time grant writers to do nothing but apply for and
administer Federal grant funding. A full staff of grant writers
is not uncommon at a large university.
Because this free money through Federal grants is carefully
monitored, the truth is that the money isn't actually free.
Applying for Federal grants takes an unbelievable amount of
time. Additionally, by even unintentionally not abiding by the
grant's requirements, as mentioned, an individual that is
unfamiliar with the Federal government's grant programs can find
themselves in a financial or legal disaster. With Federal
funding cutbacks and the competition for grant fundings becoming
more intense, seeking free money through a grant requires not
only time, but also money, with no guarantee of success.
Stating it plainly, Federal grants and free money are
fictitious. Often, it's more work, not to mention more time and
money spent obtaining a Federal grant, than obtaining a low
interest loan. Large organizations, such as universities, can
benefit from grant funding much easier because they can apply
for multiple grants at once, and a skilled, knowledgeable staff
can monitor the grant's use carefully. A small business or
organization may not see as much success in obtaining a grant
due to the time needed to apply, monitor funds, and prepare
materials for auditing.
The plain truth is that with federal funding cutbacks and
competition for them becoming more intense, seeking a federal
grant always requires a lot of time and potentially a lot of
money up front with no guarantee of success. Dedication is
needed, and is the most important part of attempting to obtain
free money through grant funding.