Who is Eligible for Federal grants?

One of the most common questions posed by new grant applicants is who is eligible to receive a federal grant? The answer, in a nutshell, is "everybody," from individuals, to nonprofit organizations and small businesses, to state governments. That being said, this all-encompassing response requires quite a bit of filtering and attention to the details, as the majority if not all federal grants available are already pre-designated to be distributed to a specific type of applicant, like a state government, or a non-profit community organization.

Broken down, potential grant recipients basically fall into the following categories, although applicants may note that a certain grant may be available to various different types of applicants. When applying for a specific grant, always be sure to check these pre-requisites before working on your application and / or grant proposal. By knowing right from the get go who is eligible to receive a specific grant, an applicant can save themselves a lot of time and effort in the early stages of the application process.

The majority of federal grant monies are distributed to state governments, who in turn generally pass these funds on to smaller local and community programs. Essentially, this has a trickle-down effect, with the states accepting the money for a stated purpose or area of need, (like education, defense, public assistance, or medical services), and then transferring the money to the organizations or regions that need it the most. Federal grants actually make up a huge portion of a state's annual budget, with a recent study by the Pew Charitable Trust's Fiscal Federalism Initiative estimating that federal grants accounted for more than 1/3 of state budget revenues in the fiscal year 2011.

Smaller governments are also eligible for a number of grants, including local city or township governments, special district governments, and both federally recognized and other Native American Tribal governments. Often, applicants will see grants available for any and all of these classifications, although there are also certain grants that are solely available to Native American Tribal governments.

Public Housing Authorities and Indian (or Native American) Housing Authorities also fall into their own specific category, with a number of grants available strictly for these classifications.

The Educational Organizations category includes all manner of educational institutions and schools, both public and private. Eligible recipients for this grant essentially include Independent School Districts, Public and State Controlled Institutions of Higher Education, (i.e., state and public universities,) and Private Institutions of Higher Education, (like private colleges.)

Being eligible for a grant in the Nonprofit category generally entails having a 501(c)(3) status with the IRS, although often nonprofit organizations will be considered who do not have the 501(c)(3) designation. Institutions of higher education and schools do not fall under this category, since they have their own distinct classification.

Some grants and loans are available for small business applicants, provided that they meet the definitions of a "small business" as outlined by the U.S. Small Business Administration (SBA.) The maximum number of employees and the annual revenue caps to qualify vary by type of business, and as such, potential small business will want to review the details to ensure their specific organization qualifies. For example, the maximum number of employees allowed for wholesale trade industries is 100 employees, while for manufacturing companies, the maximum number increases to 500. As for annual revenue caps, retail and service industries must have an annual revenue under $6 million, while construction industries must have a revenue under $28.5 million, and agricultural industries must have a max cap of $.75 million.

Clearly, there is a large discrepancy between the industries when it comes to what classifies as a small business, and potential applicants can learn more about the industry-specific guidelines on the SBA's website, http://www.sba.gov/, which outlines the guidelines for most US industries. Applicants should also note that a number of funds are available solely for women-owned and minority-owned small businesses in order to encourage entrepreneurship, leadership and equality in small business, therefore potential recipients who fall into these groups should definitely review the grants available

Small businesses should also consider that many of the grants are strictly available for research, development, and expansion to underrepresented regions, and not necessarily for start-up or marketing costs. These grants may also be just a portion of funds needed, which the small business matching the amount of the grant to fulfill their proposed goal. Regardless, just be sure to read the fine print to ensure the prospective grants meet your specific needs before proceeding with an application.

A small percentage of federal grants are available to individuals, and none of these grants are earmarked for personal financial assistance. With that being said, applicants will still find a few hundred grants at any given time that are available for individuals in different fields, and who are aiming to achieve varying goals. The most common uses of these grants are for the purpose of education, (such as scholarships or low interest loans), research, and compensation or funds for certain groups of individuals, like veterans or Native American tribe members. Many grants are available for individuals, organizations or businesses to set-up and expand their training in certain aspects of their field, such as a Law Enforcement Grant that allows technicians or law officers to acquire training on the physiological make-up and effects of illegal drugs.

Regardless of what field an individual specializes in, there is no shortage of options, with topics ranging from housing to scientific research, employee training and retention to community services. Individual applicants will want to do a detailed search to ensure that any grants that fit into their field of interest or specific goals are duly considered.

With the thousands of grants available, and with new grants being added on a regular basis, the initial process of narrowing down the options of grants that are applicable to a potential recipient can be initially daunting. Happily, however, it is an easy task to filter your search to just grants by applicant type to ensure from the start that your grant application is on the right track.