Wikipedia

Grant (money)

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A grant is a financial award given by a government entity, foundation, corporation, or other organization to an individual or organization for a specific purpose. Unlike loans, grants do not need to be repaid,[1] making them an attractive source of funding for various activities, such as research, education, public service projects, and business ventures. Examples include student grants, research grants, the Sovereign Grant paid by the UK Treasury to the monarch, and some European Regional Development Fund payments in the European Union.[2]

Latin grant dated 1329, written on fine parchment or vellum, with seal

What are Types Of Grants Available?

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Grants can be categorized into several types based on the purpose and the source of funding.

Government Grants

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Government grants are awarded by federal, state, provincial, local and/or municipal governments to support projects that benefit the public. These can include funding for scientific research, infrastructure development, public health initiatives, and education programs. Examples include the Pell Grant in the United States, which helps low-income students pay for college, and the Horizon Europe program, which funds research and innovation projects across Europe. For businesses, government grants are financial contributions provided by federal, provincial, or municipal governments to help businesses achieve specific goals, such as innovation, expansion, job creation, and export development. For example, in Canada, the CanExport program helps businesses expand into international markets by covering expenses related to travel, marketing, and trade shows. [3]Unlike interest-free loans, grants do not need to be repaid, making them an attractive funding option for businesses looking to reduce financial risk.

Foundation Grants

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Private foundations provide grants to support various causes, ranging from social services and education to arts and culture. Notable foundations include the Bill & Melinda Gates Foundation, which focuses on global health and development, and the Ford Foundation, which supports human rights and social justice initiatives.

Corporate Grants

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Corporations often establish grant programs as part of their corporate social responsibility (CSR) efforts. These grants support community development, environmental sustainability, and other initiatives that align with the company’s values and business goals. Examples include Google's AI for Social Good program and Walmart's Community Grant Program.

Educational Grants

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Educational grants are provided to support students and educational institutions. These can be merit-based, need-based, or designated for specific fields of study. The Fulbright Program, which offers grants for international educational exchange, and the National Institutes of Health (NIH) grants for biomedical research are prominent examples.

Purpose and Uses of Grants

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Grants serve a wide array of purposes, each designed to address specific needs or goals.

Research and Development

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Research grants are essential for advancing knowledge and innovation in various fields, including science, technology, medicine, and social sciences. These grants enable researchers to conduct experiments, collect data, and publish findings that can lead to breakthroughs and new technologies. Agencies like the National Science Foundation (NSF) and the European Research Council (ERC) are major funders of research grants.

Education and Training

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Educational grants help increase access to education by providing financial support to students and institutions. These grants can cover tuition fees, books, and living expenses, making higher education more accessible to disadvantaged populations. Teacher training and curriculum development programs also benefit from educational grants, improving the quality of education.

Community Development

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Community development grants aim to improve the quality of life in communities through projects that address issues such as housing, public safety, economic development, and social services. These grants can fund the construction of affordable housing, the establishment of community centers, and programs that provide job training and support to underserved populations.

Arts and Culture

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Grants for arts and culture support the creation and preservation of artistic works, the operation of cultural institutions, and the promotion of cultural heritage. Organizations like the National Endowment for the Arts (NEA) and the Arts Council England provide funding for artists, museums, theaters, and other cultural entities.

Environmental Conservation

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Environmental grants support projects that protect and restore natural resources, promote sustainable practices, and address climate change. These grants fund activities such as habitat restoration, renewable energy development, and environmental education. Notable examples include grants from the Environmental Protection Agency (EPA) and the World Wildlife Fund (WWF).

European Union

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European Union grants

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The European Commission provides financing through numerous specific calls for project proposals. These may be within Framework Programmes. Although there are many 7-year programmes that are renewed that provide money for various purposes. These may be structural funds, youth programmes and education programmes. There are also occasional one-off grants to deal with unforeseen aspects or special projects and themes. Most of these are administered through what are called National Agencies, but some are administered directly through the Commission in Brussels. Due to the complexity of the funding mechanisms involved and especially the high competitiveness of the grant application processes (14%) professional Grant Consulting firms are gaining importance in the grant writing process.[4] EU grants should not be confused with EU tenders, although there can be some similarities.[5]

Another funding body in Europe is the European Research Council established by the European Commission in 2007: see European Research Council#Grants offered. Similarly there are calls and various projects that are funded by this council.

The European Commission and the Council of Europe also operate a joint grant-funding programme.[6]

Denmark

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Denmark has an educational universal grant system, SU (Statens Uddannelsesstøtte, the State Education Fund). It is available to all students from 18 years of age, with no upper limit, who are currently taking courses. There are two systems of SU.[7]

  • Youth Education (Ungdomsuddannelse), available to all students in pre-university education (upper secondary education).
  • Higher Education (Videregående Uddannelse), available to all students in post-secondary (higher education), is a coupon grant valid for 5 years and 10 months from beginning higher education.

In addition to the government grant scheme, more than 35,000 grants in Denmark exists, which is the second largest number of foundations in Europe by country. The foundations are estimated to possess 400 billion Danish kroner (US$60 billion) in accessible funds.

Ireland

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Grant-giving organizations in Ireland include the Irish Research Council for Science, Engineering and Technology and Science Foundation Ireland for research grants.

Poland

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Major grant organisations funded and operated by the government include:

United Kingdom

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Grants are made available in the United Kingdom for a variety of business, charitable and research purposes. The biggest grant distributors are government departments and agencies which offer grants to third-party organisations (often a charitable organisation) to carry out statutory work on their behalf.

Other major grant distributors in the United Kingdom are the National Lottery, charitable trusts and corporate foundations (through Corporate Social Responsibility policies). For example, Google contributes to the grants process through its Google Grants programme, where any charitable organization can benefit financially from free Google Ads advertising if they share Google's social responsibility outcomes.

Grants are time limited (usually between one and three years) and are offered to implement existing government policies, to pilot new ways of doing things or to secure agreed outcomes. A grant will usually only be given for a specific project or use and will not usually be given for projects that have already begun.[8]

Over the years the discipline of writing grant bids has developed into a specialised activity. Many organisations employ fundraising professionals to carry out this work. In the United Kingdom, the fundraising profession is governed by The Institute of Fundraising and is independently regulated by the Fundraising Regulator in England, Wales, and Northern Ireland and by the Scottish Fundraising Standards Panel in Scotland. The grant writing process generally includes searching and proposal-writing for competitive grant funds. Traditional search methods - for example referring to the Charities Aid Foundation Directory of Grant Making Trusts - are quickly becoming replaced by online fundraising tools.

Because grants are sometimes received in advance of the activity they are to resource, and would need to be returned to the funder if their purpose could not be fulfilled, good accounting practice requires that grant income is not recognised "until there is reasonable assurance that the entity will adhere to the conditions which are attached to the grant".[9]

Anti-lobbying restrictions

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In 2016, the UK Government introduced proposals to include an "anti-lobbying clause" in grant-funding agreements, i.e. payments which "support lobbying or activity intended to influence or attempt to influence Parliament, Government or political parties, or attempting to influence the awarding or renewal of contracts and grants, or attempting to influence legislative or regulatory action" [10] would generally not be treated as eligible for grant funding and therefore funded organisations would need to fund these activities in some other way. The Scottish Government has indicated it would not be introducing similar measures.[11]

Top grant-making charities

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As of 2021,[12] 6 out of the top 10 charities in England and Wales (as measured by expenditure on charitable activities) make grants to individuals and/or organisations.

United States

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Main article: Federal grants in the United States
See also: Federal assistance in the United States

In the United States, grants most often come from a wide range of government departments or an even wider range of public and private trusts and foundations. According to the Foundation Center[13] there are over 88,000 trusts and foundations in the country that collectively distribute more than $40 billion annually. Conducting research on trusts and foundations can be a slightly more intricate process, often requiring access to subscription-based directories or databases for comprehensive information.[citation needed]

Most often, education grants are issued by the government to students attending post-secondary education institutions. In certain cases, a part of a government loan is issued as a grant, particularly pertaining to promising students seeking financial support for continuing their educations.[14]

Grant compliance and reporting requirements vary depending upon the type of grant and funding agency. In the case of research grants involving human or animal subjects, additional involvement with the Institutional Review Boards (IRB) and/or Institutional Animal Care and Use Committee (IACUC) is required.

  • National Aeronautics and Space Administration (NASA) : NASA receives and evaluates both solicited and unsolicited grant proposals. The NASA Shared Services Center (NSSC) currently awards all new grants for NASA HQ, GSFC, NMO, Stennis and Dyrden. Awards are made in accordance with the NASA Grants and Cooperative Agreement Handbook[15]
  • National Institutes of Health (NIH)
    • The Center for Scientific Review (CSR) is the focal point at NIH for the conduct of initial peer review of grant and fellowship applications. It implements ways to conduct referral and review.
    • The Office of Extramural Research (OER) provides guidance to institutes in research and training programs conducted through extramural (grant, contract, cooperative agreement) programs.
  • National Science Foundation (NSF)
    • Most NSF grants go to individuals or small groups of investigators who carry out research at their home campuses. Other grants provide funding for mid-scale research centers, instruments and facilities that serve researchers from many institutions. Still others fund national-scale facilities that are shared by the research community as a whole.
    • The NSF receives about 40,000 proposals each year, and funds about 10,000 of them. Those funded are typically the projects that are ranked highest in a merit review process. These reviews are carried out by panels of independent scientists, engineers and educators who are experts in the relevant fields of study, and who are selected by the NSF with particular attention to avoiding conflicts of interest. (For example, the reviewers cannot work at the NSF itself, nor for the institution that employs the proposing researchers.) All proposal evaluations are confidential (the proposing researchers may see them, but they do not see the names of the reviewers).

Grant effectiveness

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Econometric evidence shows public grants for firms can create additionality in jobs, sales, value added, innovation and capital. For example, this was shown to be the case for large public R&D grants,[16][17] as well as for public grants for small and medium-sized firms[18] or tourism firms.[19]

See also

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References

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  1. ^ "Free money From government you never pay back". Getgovtgrants. 23 June 2021.
  2. ^ EUR-Lex, Regulation (EU) 2021/1058 of the European Parliament and of the Council of 24 June 2021 on the European Regional Development Fund and on the Cohesion Fund, Article 5.6, accessed 26 August 2023
  3. ^ R., D. "What are Government Grants?". INAC Services. Retrieved 25 October 2024.
  4. ^ "Horizon 2020 statistics - Horizon 2020 - European Commission". Horizon 2020. Retrieved 2016-10-22.
  5. ^ "What is the difference between a grant and a tender?". EU Funds. 18 March 2022. Retrieved 21 March 2022.
  6. ^ Council of Europe, Grants awarded by the Council of Europe, accessed 1 Ocytober 2023
  7. ^ "Danish Education Support Agency". Statens Uddannelsesstøtte. Archived from the original on 6 June 2012. Retrieved 9 June 2012.
  8. ^ "Small business finance". Bexfinance.com. 2011-10-03. Archived from the original on 2012-06-27. Retrieved 2013-01-09.
  9. ^ Collings, S., FRS 102: How to account for grants, Accounting Web, published 17 April 2014, accessed 15 November 2023
  10. ^ Department for Digital, Culture, Media & Sport, Eligible Expenditure, accessed 27 April 2021
  11. ^ Royal Society of Edinburgh, UK Government Anti-Lobbying Clause: Press Release from The Royal Society of Edinburgh, released 31 March 2016, accessed 27 April 2021[dead link‍]
  12. ^ "Top 10 charities in England and Wales". Charity Commission for England and Wales. Retrieved 2021-03-06.
  13. ^ "Foundation Center". Foundation Center. 2012-11-16. Retrieved 2013-01-09.
  14. ^ "Government Grants for College". School Grants Guide. Archived from the original on 24 April 2018. Retrieved 9 June 2012.
  15. ^ "NASA Grants and Cooperative Agreement Handbook". NASA. Retrieved 17 September 2015.
  16. ^ Howell, Sabrina T. (2017). "Financing Innovation: Evidence from R&D Grants". American Economic Review. 107 (4): 1136–1164. doi:10.1257/aer.20150808.
  17. ^ "Earning Abundance". Archived from the original on 6 May 2024. Retrieved 14 November 2023.
  18. ^ Dvouletý, Ondřej; Srhoj, Stjepan; Pantea, Smaranda (2020). "Public SME grants and firm performance in European Union: A systematic review of empirical evidence". Small Business Economics. 57: 1–21. doi:10.1007/s11187-019-00306-x.
  19. ^ Srhoj, Stjepan; Vitezić, Vanja; Walde, Janette (2021). "Do small public grants boost tourism firms' performance?". Tourism Economics. 28 (6): 1435–1452. doi:10.1177/1354816621994436.
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