Grant-in-Aid

Federal Grants-in-Aid: Overview and Examples

A federal grant-in-aid is money the federal government awards to fund a specific project or program carried out by state or local governments, educational institutions, nonprofit organizations, and sometimes businesses. These funds are drawn from federal revenues and are not loans—recipients do not repay the grant—but they must use the money according to the grant’s rules.

Key points

• Grants fund specific projects or programs and come with conditions on allowable uses.
• They are not loans and do not require repayment.
• Recipients are typically governments, schools, nonprofits, or businesses; individuals generally receive benefits only indirectly through those organizations.
• Grants are often competitive and may be distributed across multiple recipients or funding periods.

How federal grants-in-aid work

• Federal agencies set program goals, eligibility criteria, allowable expenses, and reporting requirements.
• Applicants apply for awards; agencies may divide funding among multiple recipients or award it in installments.
• Grant funding can act as seed money to demonstrate project feasibility and attract additional investors or donors.
• Recipients must comply with spending rules and reporting obligations; misuse can result in penalties or clawbacks.

Common uses and examples

• Research grants to university faculty to pursue specific lines of inquiry (may cover staff or student assistants but often exclude general overhead like utilities).
• Program support to lower tuition or expand services for target groups (for example, veterans and their families).
• Funding for conferences, community programs, or pilot projects aimed at a defined public purpose.
• State or local governments may receive grants and then pass (earmark) funds to nonprofits that deliver services to constituents; such funding is usually supplementary.

Eligibility and restrictions

• Most federal grants are awarded to organizations and government entities rather than individuals. Individuals may benefit when organizations that received grants provide services or subawards.
• Grants typically specify permissible and impermissible expenses (e.g., personnel vs. building utilities).
• Applicants may need to meet residency, citizenship, or organizational requirements depending on the program.

Where to find federal grants

• Grants.gov is the primary federal portal for searching and applying for grant opportunities across agencies.
• Some foundations and associations offer grant programs funded in part by federal money or structured similarly; their opportunities may appear in other databases.

Frequently asked questions

Q: Can I get a federal grant as an individual?
A: Generally no. Most grants go to governments, nonprofits, educational institutions, or businesses. Individuals may receive funds only through organizations that won grants.

Q: Can I use a federal grant for any expense?
A: No. Grants are earmarked for specific uses. Award documents outline allowable expenses and reporting requirements.

Q: Do grants-in-aid have to be repaid?
A: No—grants are not loans. However, failure to use funds according to the grant terms can require repayment or result in sanctions.

Tips for prospective applicants

• Read the grant announcement carefully for eligibility, allowable costs, timelines, and reporting requirements.
• Treat federal grants as competitive projects—prepare a clear scope, budget, and measurable outcomes.
• Use grant awards as leverage to attract additional funding when appropriate.
• Plan for administrative and compliance workload; managing grants often requires robust recordkeeping.

Bottom line

Federal grants-in-aid provide important, non-repayable funding for public programs, research, and services. They offer valuable support but come with detailed rules, competitive application processes, and administrative responsibilities. Organizations seeking grants should ensure they can meet eligibility and compliance obligations before applying.