Misconceptions about Government Grants | #GrantChat Highlights Part 2

Posted on by Grants.gov

What do you think of when you hear “government grants”? One thing we have learned as a program is this—a person or organization’s specific desires and goals shape how they re-define “government grants” so that they should receive funding. This re-defining of grants to suit ones needs has led to many misconceptions about what federal grants are actually for.

Misconceptions about government grants #grantchat

On the May 1st #GrantChat, we asked grant professionals, “What is the most common misconception people have about grants?” There were several themes to what grant professionals encounter, so here are several key tweets and resources to help those of you who may believe one of these misconceptions.

What is the most common misconception people have about grants?

Correct, these are misconceptions about grants! The grant application process requires a lot of your time and effort to plan, coordinate, and write. Plus, most federal grants are for organizations, so there is a paid team working on those activities. Lastly, should you receive a federal grant, there is the cost of building the requisite organizational infrastructure to manage and report on a federal grant in the Post Award Phase.

While there is not a literal fee paid to the U.S. Federal government to apply for a grant, applying for federal grants has opportunity cost—that is, “a benefit that a person could have received, but gave up, to take another course of action” (Opportunity Cost, Investopedia.com). Applying for a federal grant requires an investment of your time, which could be spent by investing it in something else.

To summarize, it is true to say there are no legitimate fee-to-receive federal grants, but federal grants are not “easy” nor “free money” when considering the big picture.

Grants for a House or Small Business?

Bonus points for this one! In addition to the misconception about “free money,” Lucy has identified two more very common misconceptions. Can you get a federal grant to buy a house? You may be able to find another form of federal financial assistance, such as a loan, to purchase a home. However, barring a new legislative act, there are no federal grants for you to just buy a house with. As for businesses receiving federal grants, please watch the Can I Get a Federal Grant for My Small Business? video.

Eligibility for Federal Grants

Here’s that “free money” misconception again, but also notice the misconception that anyone can get any grant. Of course, federal grants are expressly for advancing a public purpose, but federal grants are often specifically for state governments or local organizations to receive the funding and implement the public program. Please read the eligibility section of a funding opportunity announcement very carefully before investing time and resources into the application process.

Correcting Common Misconceptions