How Do Government Grants Work? What You Need To Know

If you’re wondering how government grants work, you’ve come to the right place.

Federal grants are competitive to get, and there’s a lot to know before you apply for one.

This post will make it clear how to find and apply for federal grants. After reading, you will be able to assess if they are a good choice for your nonprofit. Plus, have some winning guidance on how to actually get a grant from the government.

After reading this article, getting a government grant for your nonprofit will be a cakewalk!

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A government grant is tax-funded money allocated to projects that serve a public purpose. Legislation determines each grant's funding amount, the types of projects it will fund, and the terms of each grant.

So, how do government grants work? Federal grants go through three main phases: pre-award, award, and post-award.

During the pre-award phase, the government announces the grant funding opportunity in a grant package. The package is called an RFP or RFA (Request for Proposals or Request for Applications).

This phase is when you apply for the federal grant. Review the guidelines outlined in the RFP, complete, and submit your application. The funding agency will evaluate your application and decide who will get the government grant.

The government will notify you whether they select you to receive funding and carry out the proposed program in the award phase.

The post-award phase is when your nonprofit implements the proposed program. You will also need to report on the progress, achievements, and spending of funds, and finally, close out the program.

The pre-award phase generally gives a 30-90 day period to apply for the government grant. The evaluation period varies depending on the agency and scope of the project. The post-award stage may take place over several years depending on the grant terms.

You can find more details of each phase here.

There are advantages and disadvantages when you aim to get a government grant for your nonprofit. Here are some to consider.

Some advantages to receiving a government grant are:

• Government grants usually award large amounts of money to allow you to grow your organization’s programs.
• Government grant awards provide your program and organization stability. They are often a multi-year, reliable funding stream.
• Receiving a government grant boosts your organization’s reputation, and may help you secure funding from additional sources in the future.
  

Some disadvantages to applying for or receiving a government grant are:

• Government grants require a lot of staff time to apply. The application requirements are often prescriptive, so they need preparation, teamwork, and documentation.
• Receiving a government grant also requires a lot of staff time. Your organization will need to track funding, gather program data, submit frequent reports, and prepare for audits.
• The guidelines include high compliance standards. Your organization's internal processes need to meet several accountability benchmarks.

Government grants are a time-consuming but potentially rewarding venture for your nonprofit. But how do you know if it's time to pursue one?

To determine your nonprofit's grant readiness, ask yourself the following questions to assess its government grant writing preparedness and internal procedures.

• Before applying for a government grant, there are several logistical measures your organization should take. For starters, has your organization requested a DUNS Number and registered on both Sam.gov and Grants.gov? If not, begin preparing for a government grant here. Keep in mind that you may also need more registrations depending on the specific government agencies your organization is applying under.
• Do you have the staff time to go through each phase of the grant cycle? Is there staff to review the RFP, develop a program model, create financial budgets, and reach out to community partners for support? If not, perhaps reconsider your capacity to apply for a government grant.
• Most government grants will ask for documentation such as financial audits, organizational budgets, and key staff resumes — do you have these on standby? It will be helpful to have these prepared in advance so you can focus on the application itself during its short open timeframe.
• When thinking of internal procedures, does your nonprofit have the means to collect and measure data? If not, you may also consider consulting an external evaluator for the program.
• Does your organization have the staff and internal controls to manage the grant budget during the program’s implementation? If so, they should be ready to track, analyze, and report on the spending of the government funds.

If you have the staff capacity, grant writing preparedness, and internal controls in place, then government grants may be right for you!

Now that you’ve determined a government grant is right for you, you may be wondering, “How do I apply for a government grant”?

When you identify a grant opportunity, the first step is to review the Request for Proposal, or RFP. The RFP explains the eligibility requirements, program expectations, and budget allocation terms of the grant. You will need to show your organization’s qualification when first writing the grant.

The Grants.gov Workspace allows you to download the application as a PDF, which you can fill out and save as you go. You may also add collaborators onto the Workspace to help complete the application.

You will need to answer questions about your organization, your program model, and your financial plan. Questions will include what needs the program will address, its goals and objectives, and the model you will follow. The application will also ask about key staff, collaborations, an evaluation plan, and a budget.

Once complete, upload the finished documents into the Workspace. Then run a check to ensure all portions of the application are complete. You can then sign and submit the application on the site.

After submission, you will be able to check the status of your application using the reference number given. Be sure to download a final copy of your submitted proposal as a backup file.

Detailed trainings on using the Workspace to apply for a federal grant can be found here.

You might also find our workshop with Mockingbird Incubator covering how to get started with government grants valuable here.
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Here are places to find government grant funding opportunities:

Instrumentl

Our service will personalize search results to your organization so that once set up, you can customize your searches to your specific project and funding goals.

Instrumentl will handle the research for you by sifting through the thousands of opportunities to find a good match for you.

Another great benefit is that we will notify you of matching opportunities. Most government grants only give you 30-90 days to create and submit your application. Our notification system allows you to get started as soon as an opportunity opens.

Each search result gives you an overview of the program and eligibility requirements.

For example, here are some government grant opportunities you can find on Instrumentl:

• US Department of Transportation: Areas of Persistent Poverty Program for up to $1,000,000
• US HUD: Resident Opportunity and Self-Sufficiency Service Coordinator Program up to $737,550
• US HHS: Resident Opportunity and Self-Sufficiency Service Coordinator Program up to $800,000 - $1,200,000
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Grants.gov

This website is a streamlined place where federal agencies post their available grant opportunities. You may research and find government grants on the site through filters such as keywords or agencies. You can also set up a search profile to get notified via email or RSS feed of specific opportunities.
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SAM.gov’s Assistance Listings

This resource helps you to anticipate funding that will become available in the upcoming year. Formerly known as the Catalog of Federal Assistance, it is published every year and describes every federal grant program. The drawback to this method is that it will also list programs they no longer fund, so you will have to cross-reference program availability with other sources.

To access, select “Data Services,” “Assistance Listings,” and then the file name AssistanceListings_DataGov_PUBLIC_CURRENT.csv.
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For a more in-depth guide to some of the best grant places to find grants, check out our in-depth guide here.

Local Representatives

Most local government offices have staff available to assist you in your research. Contacting them may make them familiar with your organization, which is useful when you need a letter of support. Or, they may have grant newsletters specific to your location and area demographics.‍

Below are some key points that were made to break down how government grants work:

• Government grants work by going through three main phases, the pre-award, award, and post-award phase which all have different requirements.
• The substantial multi-year funding government grants can provide may be advantageous for your programs, but you should also consider the staff time that it will require to apply for and manage the grant.
• Determine whether a government grant is right for you by evaluating your organization’s internal procedures and grant writing preparedness.
• Always review the RFP to check guidelines before starting to apply for a government grant. Use Grants.gov to submit the application electronically.
• There are great sources to find government grant opportunities. One of them is Instrumentl, which will help offload time-consuming research and make sure you stay on top of opportunities as they become available.
  

Now that you understand how to get a government grant, you can decide whether it is right for your nonprofit and begin to pursue federal funding for your programs. Good luck!

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