A federal grant is a financial award or economic aid offered by the United States government out of the funds in the general federal revenue. The money offered can be a loan, a portion of the cost for a particular project or organization, or a funding for a research.

Every year, the government provides more than 1,000 various grant programs to qualified individuals, businesses, and institutions. The grant is distributed by over 26 specific federal agencies and it is further divided into 21 separate categories, including the arts, business, science and technology, etc.. Besides the government, grants can also be available from charity trusts, non-profit organizations, or non-profit corporations.

How does a federal grant work?

To get a federal grant, you have to apply for it, and the process can be complicated. Generally, all the grants are divided into two categories: direct grants and pass-through grants. Direct grants enable the recipients to receive the money directly from the federal government. To get a direct grant, the recipients need an application and then an agreement with the federal government. While applying for the grants, the applicants should try to describe how the awarded funds can bring benefit to the local community or to the public.

The pass-through grants, on the other hand, are firstly distributed to different states by the federal government. The funds, accordingly, will be given to the local applicants respectively. Unlike direct grants, recipients applying for pass-through grants can have less competitors. The applicants are usually required to go to the state capital for further application.

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