How to Figure Out Differences among Types of Federal Grants

You will undoubtedly need to do research if you are seeking a federal grant. Here’s a rundown the basic characteristics you will need to know. Federal government grant monies come in two forms:

  • Direct grants: You apply directly to the federal government. There is no intermediary agency.

  • Pass-through grants: Your state applies to the federal government for a grant. After receiving the grant, the state 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 here’s where the topic gets complicated: Whether in the form of direct or pass-through grants, federal monies are also classified as either competitive or formula.

Direct grants

The advantages to applying for a direct grant award or cooperative agreement, which comes straight from the federal government, include the following:

  • Direct grants have no middlemen and none of the extra layers of red tape needed by intermediary grant making agencies. You apply directly to the federal government for a grant in response to an 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. This interaction means one-on-one attention, so be sure to review the application guidelines thoroughly and then compile all your questions. You can e-mail or call the grant-making agency’s contact person for clarification and answers. Doing so upfront clears the way for the topic research and the grant-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.

    Some federal agencies have a deadline for submitting questions via e-mail or by phone; read the grant application guidelines to make sure you can still make the call or e-mail contact. If the window has passed, look at the agency’s website for a link to frequently asked questions (FAQs). Others have probably asked the same questions you have, and the agency may have posted the answer for the general public.

    Many federal agencies host a technical assistance call or webcast in which potential applicants can participate. In this forum, program staff members responsible for the grant application typically provide an overview of the application notice, highlighting key points of information, and then open the call to questions from potential applicants.

    These discussions provide a great opportunity to hear from program officers, ask questions, and learn from the questions of other applicants. You can find the date, time, and access information for any planned call/webcast in the Notice of Funding Availability (NOFA) announcement, Request for Proposal (RFP), Funding Opportunity Announcement (FOA), or Request for Application (RFA), as well as on the funding agency’s program-specific website.

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 ten grant applicants, your chances are slim.

Urban and rural poverty pockets receive first priority for most social program funding and other grant-making areas earmarked for social-issue hot spots. If you aren’t proposing services in one of these high-needs geographic funding areas, your chances of winning a federal grant from a competition that gives 5 to 25 extra review points to high-needs, census-data-supported geographic areas are reduced to almost nothing.

Pass-through grants

Pass-through grants have two advantages:

  • When you apply for pass-through grant funds at the state level, you compete against other grant applicants in your state only. As a result, you encounter considerably less competition than at the federal, direct grant–seeking level.

  • When you’re making an appearance before the state agency program staff, you can get info on previously funded grants. Under the Freedom of Information Act (FOIA), government agencies must provide requested public information to the requestor. Make sure the list contains the grant recipients and award amounts. And ask for a copy of a successful grant application from a previous competition. Knowing how winners write can help.

The only disadvantage to applying for pass-through grants is that the grant awards are often smaller than those for a direct grant. The legislation determines the award allocation. It’s a trade-off: Pass-through awards are smaller, but they’re easier to win.

Pass-through grant awards can be significantly smaller than direct grant awards because the state takes money off the top of each federal grant to cover administrative costs. Then the amount that’s left must be divided geographically and politically.

Distinguishing between competitive and formula grants

To win a competitive grant or cooperative agreement, you must compete with other grant applicants for a limited amount of money. A team of peer reviewers (experts and laypeople who apply to read and score grant applications) looks at your application and decides how many points you receive for each narrative section in the body of the grant request. The applications with the highest scores are recommended for funding.

A formula grant (a fill-in-the-blanks, no-brainer form), on the other hand, is money disbursed by a state agency or municipality to a grant applicant based on a preset standard or formula.

A great example for formula monies is a grant program administered by the U.S. Department of Justice. The Justice Assistance Grant (JAG) Program (not to be confused with the military’s Judge Advocate General Program) is the leading source of federal justice funding to state and local jurisdictions.

The program provides monies to states, tribes, and local governments, which they in turn use to support program areas including law enforcement, prosecution and courts, crime prevention and education, corrections and community corrections, drug treatment and enforcement, planning, evaluation, technology improvement, and crime victim and witness initiatives. All JAG allocations are calculated by the Bureau of Justice Statistics (BJS).

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