GRANTS 101 – THE BASICS
What is a Grant?
A grant is an amount of money given from one entity to another for a specific purpose. Grants do not accrue interest, or need to be paid back, unless the recipient completes the project without expending all the funds. In the public sector, grants are highly competitive and involve a large amount of administrative oversight.
Types of Grants
Grants are not always a direct sum of monetary funds – oftentimes, the granting agency pays for project costs on a reimbursement basis. A grant can also entail technical assistance from the agency to plan a project, conduct a study, or other services.
Lifecycle of a Grant
Typically, grant funds are announced by a Notice of Funding Opportunity (NOFO). Once the NOFO is published, the grantor agency (giving the funds) reviews applications from grantee agencies (receiving the funds) and determines which requests are fundable, either partially or in full. Grantors often ask how scalable the proposed project is to distribute funding as equitably as possible to many applicants. Once all applications are reviewed, the granting agency will contact the recipient and request a signature on a grant contract that clearly states all requirements. Throughout the grant process, every exchange must be documented and recorded to align with the agency’s guidelines. Reports are also submitted during the life of the project to track the success of the project. Once the grant-funded project is complete, the grantee will submit a final report detailing the outcomes of the project and how they were achieved. It is also not uncommon to submit quarterly or annual reports for past grants that support ongoing projects.
The total amount that an agency distributes in grants differs from the maximum award per recipient. For example, an agency may advertise a total of $50,000 available in grants, but the fine print in the NOFO likely states a cap for how much a recipient can apply for.
Common Granting Agencies
Most public-sector grants originate from federal agencies and are distributed through state, regional, or local groups.
Some examples of agencies that administer grants include:
- Local: Mile High Flood District (MHFD)
- Regional: Denver Regional Council of Governments (DRCOG), Downtown Colorado Inc. (DCI)
- State: Colorado Department of Transportation (CDOT), Department of Local Affairs (DOLA), Great Outdoors Colorado (GOCO)
- Federal: Congressional Directed Spending (CDS) – formerly called “earmarks”, Community Development Block Grant (CDBG), Housing and Urban Development (HUD),
- Federal Highway Association (FHWA) and United States Department of Transportation (USDOT), Federal Emergency Management Association (FEMA), National Parks Service (NPS)
- Nonprofit: Community Foundations, Urban Land Institute (ULI)
FROM APPLICATION TO CLOSE-OUT
Grant applications require significant detail on project information. A typical grant application will ask for a brief as well as a detailed project description, desired outcomes, line-item budget breakdown, schedule, letters of support from other involved parties, demographic data, scalability (i.e., could this be done at a smaller scale or in phases), and more.
Nearly all grants require the applicant to pledge a match of the funds – either cash or in-kind – to demonstrate a commitment to following through on the project. Some examples of in-kind matches are staff time, materials, contracted services, or other types of non-cash contributions that directly support the project. Some agencies prohibit the use of other grant funds for matching, but others are more flexible.
Reporting and Compliance
Regardless of the amount, grantors will require at least one report detailing the original project plan, funds expended, proposed and actual outcomes, and other criteria from the original application. With larger grants, the agency will mandate more frequent reports to ensure that the grantee is within compliance. All invoices, correspondence, and other related information must be documented and readily available for audit.
Even if a grant is not federalized, it still demands a significant administrative oversight. Depending on the number of grants, agencies will have a team of grant writers and grant managers to support applications and compliance. Grants under the same umbrella program or agency can have differing guidelines and require close attention to detail. As mentioned in the previous section, there is a great deal of effort to maintain compliance and avoid jeopardizing existing or future awards.
Monitoring and Tracking
The world of grants is vast and requires consistent monitoring and tracking. Opportunities are usually announced via email newsletters or other digital communication, often to their organization’s members before being published broadly. Many agencies offer grants on an annual cycle, but this is not guaranteed. Funding is also ultimately determined by federal legislation and other government standards.
Extensions and Amendments
It is not uncommon for a project to be off-schedule, but if it is grant-funded, this means more communication with the grantor. Grant extensions can be approved, but the grantee must provide sufficient documentation and reason for the request. Any amendments to the original project proposal are subject to these same guidelines.
Grants are competitive by nature and should not be considered a dependable funding source for future projects. The most common criteria among grants are based on the area median income (AMI) of a particular area. Most agencies prioritize underserved or underrepresented populations that cannot find funding elsewhere for vital services and programs.
Member Agency Qualifications
Similar to the common grant criteria, applicants must be a member of an organization, or qualify under the organization’s guidelines, to be eligible for certain funding. An example of this is the Community Development Block Grant (CDBG) program – recipients must represent a population that is low- to moderate-income (among other community needs measures) in order to be considered an entitlement community. Other examples of this requirement are in metropolitan planning organizations (MPOs), where grantees are categorized into certain regions and cannot apply for funding outside of their assigned area.
One of the most valuable components of a successful grant application and award is partnerships between agencies. If a program can benefit more than one area, population, region, etc. the proposal is stronger than if the applicant submitted only on their behalf. With challenges such as transportation, for example, a collaborative plan to problem-solve and develop projects is highly valuable as opposed to a siloed approach.