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Federal grant monies come in two forms: direct grants, meaning that you apply directly to the federal government for a grant, and pass-through grants, meaning that your state applies to the federal government for a grant, receives the grant, and then passes the federal monies on to applicants.
Pass-through monies are still considered federal monies even though they're distributed by state agencies.
Now it gets complicated. Whether in the form of direct or pass-through grants, federal monies are also classified as either competitive or formula.
 | The two publications that provide bountiful information about federal grant opportunities are the Catalog of Federal GLOBAL : Per Conventions and per CFDA Web site.Domestic Assistance (CFDA) and the Federal Register. Both publications carry similar information and describe grant-giving programs as either competitive or formula. |
The pros and cons of direct grants
The advantages to applying for a direct grant award, which comes straight from the federal government, include:
- Direct grants have no middlemen and no extra layers of red tape. You apply directly to the feds for a grant in response to their announcement of the availability of funds.
- When you compete for a direct grant, you communicate directly with a program officer in a division of a federal agency. Review the application guidelines thoroughly and then compile all your questions and e-mail or call the grantmaking agency's contact person for clarification and answers. Do this upfront so that you can clear the way for the topic research and grant or cooperative agreement writing process.
Avoid being a nuisance! Don't call and make small talk. Have your questions ready before approaching the agency contact, and ask if the individual prefers to have questions e-mailed. Be prepared to take copious notes. If you feel you still lack a clear answer on how to proceed, ask again.
 | The one major disadvantage to applying for a direct grant award is that they're tough to win. You compete with other grant applicants from the 50 states and all the U.S. territories. If the feds are only planning to award money to five grant applicants, then your chances are slim, even with the best-written grant. |
| Urban areas and U.S. territories with high pockets of poverty are usually designated federal empowerment zones, federal enterprise zones, or colonias communities. All three of these hard-earned federal designations give communities a competitive edge over nondesignated areas. If you're not proposing services in one of these areas, then your chances of winning a federal grant from a competition that gives extra review points to applications from designated areas are reduced to almost nothing. |
The pros and cons of pass-through grants
The two advantages to applying for pass-through grant funds, which are first won from the federal government by states and are then passed on to individual organizations, are:
- When you apply for pass-through grant funds at the state level, you only compete against other grant applicants in your state. You encounter considerably less competition than at the federal, direct grant seeking level.
- Driving up, down, or over to your state capital to make a personal appearance before state agency program staff is relatively easy. While you're there, get the insider's perspective by asking for a list of grants funded previously (containing grant recipients and award amounts) and a copy of a successful grant application from a previous competition.
Under the Freedom of Information Act, all government agencies must provide requested public information to the requestor (you, the public). Exceptions to the act are extensive and include national security–related and classified documents.
Pass-through grant awards are significantly smaller than direct grant awards because the state takes money off the top of each federal grant to cover administrative costs. The amount that's left must be divided geographically and politically. Grants go to certain areas of a state because those areas haven't had many grant awards lately or because the state senator or representative has a lot of power and influence with a state agency.
Distinguishing between competitive and formula grants
To win a competitive grant, you must compete with other grant applicants for a limited amount of money. A team of peer reviewers reads your application, and points are assigned to each section of the request. The applications with the highest scores are recommended for funding.
A formula grant is money that's disbursed by a state agency to a grant applicant based on some kind of a preset standard or formula. Suppose your community receives a formula grant to increase the police department's foot patrols in a certain neighborhood. In order to access the formula grant monies, the police department filled out a very simple formula grant application that included the number of crimes that occurred in the designated block watch areas in one year. The neighborhood experienced a high level of crime (say, 100 crimes over a one-year period), so the department got the money. Simple.
The state agency awards $500 for each crime committed in a one-year period, so your community is automatically eligible for a $50,000 grant ($500 x 100 crimes). Every community that's eligible to apply receives an application and instructions for how to fill in the information and calculate the formula. Because every eligible community is awarded a grant, you don't have to compete against other communities for this money.
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