The Federal Government issues a number of different grants for different purposes. They have been simply classified into Mandatory Grants and Discretionary Grants according to the criteria under which they are distributed.
MANDATORY GRANTS: The Federal Government are obligated to issue Mandatory Grants of a fixed amount to such institutions that demonstrate eligibility for the same based on a stringent set of prerequisites. There is thus no competition for this type of grant as anyone meeting the set criteria is issued with a Mandatory Grant upon submitting an application for it.
There is a specific formula to calculate the amount awarded which is the product of a particular sum of money and an indexed variable which depends on a variety of factors like total income, number of members in the community, etc. For example, a Mandatory Grant may be issued to a state to provide certain facilities for disabled citizens who have shown proven disability by heath certificates. Mandatory Grants may be open- or close- ended or Block grants.
Block Grant: A Block Grant are issued to carry out a certain category or group of functions. Within that category, the receivers of the grant may exercise their discretion and choose what they wish to use the grant for. Thus, a Block Grant is less stringent and provides more options and adaptability than other types of mandatory grants. It is usually issued to the State Governments.
Open Ended Grant: Open ended grants are also called “Open Ended Entitlement Grants.” They do not have a maximum amount limit. For example, an Open Ended Grant may specify a certain percentage of the total amount that a state pays towards a certain cause. If a state pays funs to a citizen, a proportion of the amount paid may be covered by the Open Ended Grant.
Close Ended Grant: Close Ended Grants are of a fixed sum of money and have a maximum amount limit, thus the term “close ended.”
DISCRETIONARY GRANTS: Discretionary Grants may be issued at the discretion of the Congress for different projects that it may decide upon. As there is no obligation for the Federal Government to issue them, there is competition between applicants for this type of grant. Each applying agency submits proposal for their project to the Federal Government which then selects who to award the grant to. This is why discretionary grants are also called “Project grants.” The amount for the grant is then negotiated by the awarders and awardees or calculated by a specified formula and a cooperative agreement is signed. Every year, the Federal Government elects to award discretionary grants that they select by a competitive selection process for a variety of projects.
Some of the types of these projects are enumerated below:
Conference Projects: The Federal Government supports workshops, seminars and symposiums to promote the dissemination and progress of knowledge and learning in the fields of scientific technology and healthcare. A conference refers to any formal and organized gathering of individuals with a specific agenda for discussion, consultation, or exchange of views about a particular topic of information.
Construction Projects: The Government undertakes to fund certain building and renovation projects.
Demonstrative Projects: The Federal Government may issue a discretionary grant to an agency that demonstrates a new procedure, product, service or mode of delivering a product.
Research Projects: Research projects are funded to further knowledge and for systematic investigation using existing data by applying scientific methods to acquire new, relevant and useful information.
Service Related Projects: Funds may be issued for the provision or regulation of various services and utilities including their setup, initiation, modification and delivery.
Training Projects: Educational grants and financial aid are provided by the Government in the form of scholarships and fellowships, usually requiring an obligatory return service in the awarding institution for a fixed period of time. These funds are awarded to needy and deserving individuals in fields that are considered to be useful to the body awarding the funds.
Funds may also be granted to educational and learning institutions to better the services they offer.
By: Natalie Reynolds
Small Business Administration Service is an agency that is used by the government to provide financial support to upcoming small businesses. The mission of the agency is to strengthen the economy of the nation through assisting these small and sometimes undermined enterprises. This is done by providing start up loans to fund a venture so that they can kick off. Sometimes it does not give the loans directly, but it acts as a guarantor on bank loans.
In other cases, SBA seeks to re-establish victims of natural disasters, such as floods and fire. It gives some sort of compensation to such people so that they can continue with their ventures. It does this by providing managerial, technical and training support. According to statistics, SBA has so far helped over 20 million enterprises, with over 200,000 loans worth over 40 million dollars.
For the smooth running of SBA there is an organizational structure in the agency, which is in control of the all the operations that are involved therein. For example, there are the Communications and Liaison offices that handle all correspondence, both internal and external. The Disaster Assistance offices deals with victims of natural disasters, while the Equal Employment Opportunity and Civil Rights Compliance office seeks to see to it that all enterprises get equal chances to being funded and established. Other offices include the Entrepreneurial Development, Congressional and Legislative Affairs, Field Operation, Government Contracting and Business Development Hearings and Appeals.
The SBA had faced a lot of challenges in its establishment and existence, but so far so good. The Bush Administration once tried to wipe the agency out by cutting off the budgetary allocation. The loan arrangements are organized into a number of programs that function in regard to specific situations. For more information, consult your local library.
By: Peter Gitundu
Free Education Women Grants Pursuing Your Education Dreams
For women seeking to leap outside their traditional roles and find high paying careers, college education is not just a luxury. It is a necessity. Unfortunately, the rising cost of education, through tuition, text books and lodging, has left many women facing the choice of giving up on their dreams or going deep into a pit of endless debt to pursue their goals.
In steps everybody’s favorite uncle, old Uncle Sam…
Believe it or not, the United States government wants to help women needing money for education that will further their career objectives. By offering free grants for women, the government is insuring that women who might otherwise not be able to go to college can get educational grants to do so. These free grants for women are available from a number of departments of the federal government, usually based upon the woman’s goals and need. Many departments offer educational grants for specific fields of study or as prerequisites to future internship or employment offers.
State level funding is available
Just as the federal government provides free grants for women seeking to further their education, many state level government agencies have also created grant opportunities for women residing within the state. Finding these grant opportunities is often as easy as asking the right questions. A good place to start looking for educational grant opportunities is your local work force development or unemployment offices.
You can fulfill your dreams of an education and a high paying career. Asking the right questions will help you to find the grant opportunities to assist you with the process.
By: Rebecca Hubbard Game
As with any source of funding there are pros and cons relative to other sources of funding. Some of the pros and cons of government business grants are as follows:
The Pros
No repayment: Different from other sources of financing, grants require no repayment of the award amount. If your business is given a government grant, then it is assumed that your project is improving society. Taxes from a successful business and jobs for the community are payment enough in the government’s eyes.
Oversight: If a grantor gives you funds, chances are that they will occasionally “remotely” or in person supervise the business from time to time, just to see if things are going the right way. Although this is also included in the cons section, oversight may not be a bad thing. If you are on the wrong track, it helps if someone is watching over you to alert you to mistakes. Whether this is a pro or con depends entirely on management’s attitudes and feelings. Some may like the grantor to look over their backs while others may resent it.
The Cons
Time: Grants take time to be processed and evaluated. Businesses might have to wait a few months at the least before they receive funding. Sometimes funding may take up to a year. If you need funding fast, perhaps some short term loans or other financing options will be better suited for your business.
Difficulty to Obtain: Most lines of debt and equity financing will only assess the viability and projected income of the business. However, since grants require no repayment, they have additional requirements. Your business must help the community or society in general, and meet stringent requirements of the grantor. If grants are not a fit for your business, look for other sources of financing.
Oversight: Although it depends on the terms, debt financing has less oversight than equity and grant financing. Equity financing leads to shareholders that hold management accountable. Grantors have stringent requirements that have to be adhered to throughout the course of the grant term. Debt financing may be certain requirements such as asset to liability ratios but debt financiers are generally content as long as the business is repaying them the agreed upon amount at the agreed upon time.
Documentation: Businesses that are financed by grants will usually have to provide documentation in addition to the regular documentation done by the business. This is due to the fact that businesses that receive grants have more requirements and therefore must provide proof that they are continuing to meet those requirements. In reality however, “excessive” documentation may be a good thing as it forces you to see things about your business you may have otherwise missed.
Although it seems that the cons outnumber the pros, the fact that government grants don’t require repayment far outweighs the cons; that is, if you are willing to accept some of the requirements that the government wants you to meet.
By: Syed Ahmed
Grants for single mothers can help a mom who is struggling to make ends meet achieve a goal. Single moms are quite often stuck in a cycle of poverty. Trapped in low paying jobs and forced to support a family on a single income, single moms lack the social and economic opportunity that other people can enjoy. Grants for single moms can allow moms to get back on their feet and make a new destiny for themselves and their children – one that include financial security.
So, how to go about getting grants for single mothers? Well these days, the best way to get started is to use the internet to aid your search. There are a lot of different options out there in regards to getting grants. You can look at the government grant website to see a list of some of the current government grants. You can also visit various grant websites that aim to help single mothers make ends meet. These websites generally will help list some grants which you may apply for.
Now, when looking at getting a grant, you need to carefully consider what sort of grant you want. You just apply for grants if you don’t know what sort of grant you actually want. Remember, there are many different types of grants out there – grants for single mothers, grants for home buying, grants for buying a car, grants for starting a business, grants for college, grants for minorities, etc.
So, start looking online for a grant!
By: Tim Jamson
In a speech before a joint session of Congress on February 24, 2009, President Barack Obama presented a plan to expand education opportunities in America. He called on “…every American to commit to at least one year or more of higher education or career training.” (source whitehouse.gov) He went on to say that his administration would provide the support necessary for all Americans to complete college so that “America will once again have the highest proportion of college graduates in the world.”
Later in 2009, funding for PELL grants were increased. As part of the Student Aid and Fiscal Responsibility Act of 2009, the administration rolled out plans to expand this long standing educational grant program. So are there specific grants for moms to return to college or vocational school?
Well, they are not actually called ‘mom grants’, but yes, there are definitely more grant and scholarship opportunities available than in recent memory. The expanded PELL grant program would be the first program that you would want to explore, if you are having any financial challenges at all.
What is a PELL grant?
This is a federal assistance program designed for low-income students. The program was first established in 1965 and around 40 percent of all students in US colleges and universities receive some amount of PELL grant money. The Obama administration’s initiatives are designed to increase the reach of this program over the next several years. PELL grant recipients must be 18 years of age and must make formal application for the program.
Other Grant Programs for Women
You may be surprised to learn that your current employer offers scholarship and grant programs for qualified individuals. Be sure to check with your HR department or supervisor to see what might be available. Local organizations, such as churches and non-profits, often have grant and scholarship monies and are seeking qualified recipients.
If you are 35 years of age or older, a private organization, the Jeannette Rankin foundation, would be a good potential source for scholarship money.
By: Cathy Yeatts
The idea that there are millions of dollars in grant funds – free money — waiting for the small business owner to tap into them is true and at the same time, not true.
In most cases, grant funds are not designed to start a new business. There are some specialized businesses that may qualify for start-up money, but 99.9% of the businesses in the Yellow Pages would be ineligible to receive start-up funding.
Yet there are millions of dollars available to help fund existing small businesses and employment programs, particularly in the non-profit arena. The trick is to be able to research grants and find those that are most aligned with your company’s mission and/or project.
Grants fall into two categories: government and corporate. They all come with strings attached and very specific requirements for those who will be awarded the funds. Funders look for businesses and organizations that already exist, that will use the money for a worthwhile project, i.e. jobs in inner cities, providing training to specialized groups, etc., and that will develop a self-sustaining program.
For small businesses that are looking for funding for expansion or for equipment purchases, it takes a creative mind to find a grant that could apply to your specific needs while filling the requirements of the grant funders. That is where the services of a professional grant writer are invaluable.
For example, a company may want grant money to fund an expansion of their sales force and they need to add more space as well as hire more people. Well, a for-profit company may not be eligible for any grant money. However, the company could form a non-profit agency that trains veterans or welfare moms in sales skills, leases or buys space to accommodate the workers and gives the new trainees a place to work by leasing them to the for-profit company.
Writing a grant proposal is a very specialized skill, but it can be learned. Grant writing in and of itself is a very lucrative profession. The IRS has established a pay range for grant writers of $50 – $150 per hour. A comprehensive training course is available at http://www.AGWA.us. Students actually work on a real grant proposal while taking the course. Their work is critiqued by a certified professional grant writer
For those who don’t want to do it themselves or who don’t have the time to do it themselves, they can hire a professional grant writer to research and write the grant proposal. An organization will generally pay between $1,000 – $3,000 for a complete grant proposal and even higher for large proposal amounts. There are also grant review services that help grant seekers tweak their proposals for the best possible chance of funding.
Grants for small business funding are out there. The trick is to know how to present your needs in a way that best aligns with the grant funder’s mission. It isn’t easy, but it is definitely attainable and very much worth the effort.
By: Kasey McCallum
Eligibility for the Federal Pell Grant should be established before any time is spent in the collection of all the necessary information that you are going to have to provide. There are many issues that can affect your outcome, and if you are in any doubt about them, then you should seek an interview with your school counselor or the financial aid office.
Before any grant money is paid, you will be required to complete a FAFSA form which certifies that you are going to be using the Federal Pell Grant solely for educational purposes. You will also be required to certify that you are not in default of any other Federal student loans or grants. Generally though, to meet Federal Pell Grant eligibility, the undergraduate student must be enrolled in an approved course, and must be working towards their first bachelor’s degree or professional certificate.
Students will also need to show that they are making satisfactory progress with their studies. The Federal Pell Grant eligibility is generally based on the following criteria:
1. Most importantly, you must be in a situation of financial need. Most Pell Grants are paid to students with family incomes of less than $20,000, however there are often exceptions to this.
2. You must either have a high school diploma, GED, or show that you will be able to benefit from the tuition or program that is being offered.
3. You must have a valid Social Security number.
4. The student must be a US citizen or permanent resident, or eligible non-citizen.
The student must also be able to live and attend school legally in the US. Once eligibility for the Federal Pell Grant has been established, the student can then begin the application process. This begins by completing the Free Application for Federal Student Aid form. This can be done online, which streamlines the whole process. Even so, the Federal Processor needs to data match your application with records of various federal agencies.
Your financial aid office will then be notified of your results usually within a couple of weeks. Then however, you will be required to submit the necessary documentation to your financial aid office, which may include things such as:
1. Federal tax returns, actual or estimated.
2. W-2 information.
3. If applicable, verification of untaxed income e.g., veteran’s benefits, Social Security.
4. Bank statements, investment and mortgage information.
5. Business records.
The whole process allowing for any problems, may take around 8 weeks or even longer, so it is important that you apply at least 10 weeks before the beginning of the semester. The Federal Pell Grant can be applied for each year, providing the eligibility requirements are still met. There is no limit to the number of Pell Grants that a student can receive, however only one award per academic year will be granted. Once received, the Pell Grant is not considered an income or an asset, so it will not affect those that are eligible for the Supplemental Security Income program or the Social Security Disability Insurance program.
By: Sam Butler
So you want to look into getting grant funding to start you new business do you? Well the first thing you will need is a business plan.
After you have done some research on your new business idea, you will have a better idea of the specifics of the business. Next it is worthwhile to try to articulate all those great ideas on paper, in the form of a business plan.
At this stage it is not a bad idea to carry around a small pad of paper and something to write with everywhere you go, or your favorite high-tech gadget that can record your thoughts. Your ideas will be percolating in your brain even when you are working on other things, and you never know when you will get a good idea, so be ready for it.
A business plan can help you get funding for your business, will explain how you will market your new service or product, and much more. Even before that, however, it can show the new business idea for what it is, in all its glory and warts. Then you can decide if you still want to proceed with it, make some changes to it so that success is more likely, or perhaps try again with another business idea. This paper step can save you a lot of time and frustration when you actually have to go out and provide the new service or begin to manufacture the new product for the first time.
The United States Small Business Administration has a branch called the Office of Small Business Development Centers. These centers can be found in each state, and they offer free or low-cost help with all aspects of starting a new small business, including help with writing a business plan.
A business plan needs to show your methods for running the business. For example, who will be involved in running and working in the business and what expertise they bring to the endeavor. It will show how you plan to sell your product or service, what the product is exactly and what all the steps are that are necessary to manufacture it. Or, in some cases, what specific service will you offer in full detail, and money particulars focusing on what it will cost to bring the product or service to the buying public. Basically, what it will bring in terms of revenue.
Banks and charitable organizations will want to look at your business plan and see if it is a sound investment. A business plan will also offer the entrepreneur peace of mind, because you will have gone through every aspect of the business, and you know how it will work, how much you can make from it, and how much it will cost to start and continue operating. After the business plan is written, you will have a pretty clear idea if your business has a good chance of succeeding or if it won’t work.
I know it seems like a lot of work, but trust me you will be glad you put in the extra effort in the end.
By: Dwayne Garrett
Getting money to start a business is one the greatest obstacles an entrepreneur may face. There are so many options and red tape one has to go through, it can sometimes seem overwhelming at times. Having funds available when a business is young can mean the difference between the business failing or succeeding. Cash flow is one of the leading reasons a fledgling business fails. Businesses must have enough cash on hand so they can endure the tough times that all businesses eventually go through.
Some people believe, wrongly, that business grants are free money from the government. Although many do not have to be repaid, there are usually stipulations attached to the grant. The grant winner must adhere to certain guidelines in order to keep the grant in good standing. There is also a considerable amount of time and effort involved when one is requesting a government grant.
Also generally believed is that business grants are available to anyone who wants to start a business for any reason. This is not generally the case. If a person has an idea for a business and wants help from the government, a small business loan with a low interest rate is the best way to go. On the other hand, if your business is non-profit or you have an idea that needs to be expanded or a new technology needs to be developed you would be eligible for a grant that you would not need to repay.
There are cases where a government grant will be awarded if your current business can prove that it can create a new technology to help the economy. A business plan is very important in trying to secure a government grant. All deadlines and prerequisites must be strictly adhered to. Most unsuccessful businesses can blame not having a business plan for a great part of their failure. Also a lack of cash flow can become a huge hindrance, this is where grant money may have a huge impact.
When the government is shelling out free money for grants, they want to be certain that the potential business is going to add value or help improve the economy. It is up to the business owner to meet all deadlines and have a strong business plan to support what they are aiming to do. In conclusion, it can be a long road to obtain a government grant, but it does not have to be if you have your business plan in front of you and follow and meet all deadlines and requirements.
By: David Pierce