A Guide to Government and Private Grants: Is There Really Free Money for Me?

They say that there is no such thing as a free lunch, and while this is a worthwhile motto to live by, there is in fact a large amount of ‘free money’ available in the USA for both individuals and organisations. This cash often comes in the form of grants.

In this guide we cover the most popular forms of grants, i.e. free money, available in the U.S.A.

If you are already familiar with grants and their pros and cons, you may want to jump to the specific section to get the help you need to claim your piece of the free money pie, just click on the section title below to jump to that topic:

  1. An Introduction to Grants
  2. The Different Grant Sources
  3. Grants for Small Business
  4. Grants for Housing
  5. Military and Veteran Grants
  6. Educational Grants and Scholarships
  7. A Final Word: Grants = ‘Free Money’

An Introduction to Grants

In general, grants are sums of money paid for a specific cause or aim, which provide assistance to the receiver without providing any direct benefit to the issuer, whether they are from a government or private source. They are used for many purposes in many areas, from easing financial hardship to promoting commercial or social development, and it’s estimated that at any one time there are over 50,000 separate grants available for application, with federal grants alone worth around $425 billion a year.

Financial awards like this are available from several distinct sources and can cover a wide range of needs. Some grants are restricted to certain sections of the population, particular regions of the country, or even individual tightly defined projects, but the sheer number of grants available means that if you have a legitimate need in any of the areas covered, then it’s worth investigating whether or not you may qualify.

Grants should be distinguished from welfare or pure charity. They are not in general intended to help the underprivileged with the everyday costs of life, but to assist with a defined purpose that will usually benefit the wider community in some way.

Also, a grant should not be confused with the various kinds of development loans, or the newest forms of alternative financing, that are available.

A grant need not be repaid, although in many cases, especially with federal and state grants, the recipient must contribute some of their own funding to go alongside the grant.


The allure of ‘free money’ is of course a strong one, and because of this, an entire industry has sprung up to help people search for grants, scholarships, and other discretionary financial awards.

While the majority of these services are perfectly legitimate, there always will be less-ethical outfits who will be out to make a fast buck at the expense of the unwary.

Be suspicious of any service promising that a grant or other source of free cash has been found for you, but that the details will only be released when you pay a fee. In all likelihood, this is nothing more than a scam and should be avoided.

With that necessary warning out of the way, what kinds of grants are available?

The Different Grant Sources

There are three main sources of grants: federal, state, and private. Which source you choose depends mainly on whether you’re an organisation or an individual, and what the purpose of the grant is. These are the main points to bear in mind about each type.

Federal Grants

American Government Grants USA

Federal grants are those made by the government using money from a general grant fund. There are around 900 such grants available, spread across 26 grant-awarding agencies, covering 21 categories from agriculture through business development to housing. Federal grants are can be awarded to individuals, states, and non-profit organisations, although grants to individuals are not a federal priority. Federal grants come in three main types:

  • Categorical grants, which must be spent on a specific purpose that is tightly defined when the grant is issued. Often, these grants are made by the federal government to individual states who then distribute the funds within their own jurisdiction, but it is also possible for individuals to apply in some circumstances.
  • Block grants are provided by the federal government to individual states for them to spend as they see fit within a determined purpose such as housing, economic development, and so on. Funds from these grants often filter down to individual grant provision, although this is at the discretion of the state government.
  • Earmark grants are awarded by congress itself to specific groups or projects rather than individuals.

State Grants

Grants by States USA

Most state grants are made by distributing funds received from the federal government through block grants, as outlined above.

The individual state has a lot of freedom in how these grants are awarded within a general category, and there are opportunities for individuals, although the emphasis is still on non-profit organisations and overall community development work.

Having said that, state grants are a useful source of individual grants for education and housing.

Private Grants

Private Grants

These grant sources offer a much wider range of programs available to individuals, and offer the highest chance of having a grant approved for your personal needs.

The money used is sometimes sourced through state grants, but is often provided through philanthropic foundations, crowdfunding, or other charitable fundraising methods. Because these grants are issued by private organisations, largely using their own funds, they can be awarded with much less restrictions and with greater discretion, look at the FedEx Small Business Grant for an example.

No matter which source you wish to apply for a grant from, it’s worth remembering again the phrase about there being no such thing as a free lunch.

Grants aren’t given out lightly, and to have any success you’ll need to study the award specifications closely and ensure that you meet them in your application.

So what categories might you expect to be able to get a grant in? The next sectionss outline the basics of the most common areas.

Grants for Small Business

Small Biz Grants

It’s a common misconception that the Small Business Administration (SBA) offers grants for small business start-ups.

Except in a very limited range of cases, which mainly involve grants to companies involved in scientific research and development of cutting edge high-tech industry, the SBA does not give funds directly to new business.

If your business is involved in one of these fields, then grant founding may be available through the Small Business Innovation Research Program. In 2014, about 300 such grants were made, averaging around $625,000 each. Otherwise, help from the SBA will come mainly in the form of government-backed small business loans.

While these loans aren’t true grants, as they must be repaid, the fact that the SBA insures these loans means they can be easier to get than ordinary commercial finance, and can be of great aid to new and developing businesses.

See US Small Business Administration’s Starting a Small Business resources  for more information on government-backed small business loans.

In terms of non-repayable grants, it is at the lower level of individual states where business grants are more likely to be found, although even then the chances of getting a general-purpose grant for starting or expanding a business are limited.

States tend to offer grants for particular business activities with a wider benefit to the community, such as:

  • expansion of childcare provision
  • development of energy efficient technologies
  • business activities that promote state tourism

These grants also tend to have considerable strings attached, such as the recipient being required to match any sum that’s allocated.

Both state-level and local government grants may also be available to encourage existing businesses to relocate into their jurisdiction, although this will of course depend on the locality.

The final possible source of small business grants is through the private sector. Once again, general-purpose business grants are rare, but are most often available for certain sections of the population, or for certain interest groups.

Examples of this include grants specifically for female entrepreneurs (see Amber Grant for Woman for an example), and there are also privately funded grants available for members of various ethnic groups who wish to set up in business.

Grants for Housing

How to get a Housing Grant

The American Recovery and Reinvestment Act of 2009 sets aside over $13 billion of funds annually to support housing, with programs available to help first-time buyers as well as certain sections of the community such as military veterans or Native Americans.

The funds are administered and distributed by the Department of Housing and Urban Development (HUD), although it’s important to note that HUD makes no awards to individuals under any circumstances. All the money it controls is passed to states and local organisations for distribution, and it is to these that you will need to apply.

Every state has a Housing Finance Agency (HFA) which can provide help with meeting rental expenses, putting together a down payment for a new home purchase, or helping to provide low-cost finance options for people who might struggle to obtain a mortgage from a mainstream source such as a general bank.

While the range of services provided by a local HFA will vary from state to state, every HFA will provide free counselling on what grants, loans, or other services are available, and it’s well worth making an appointment to discuss your options. It’s important to note that although many of the assistance programs come in the form of loans, it’s common for outstanding balances and repayments to be forgiven after a certain period of time has passed, making these options closer to grants than traditional loans.

Further down the government chain, many individual cities will offer assistance with buying a first home, whether this is through helping with a down payment, sourcing a loan on favorable terms, or even subsidizing the sale price. These kinds of programs are especially common in areas that are the subjects of redevelopment drives and other city-level projects.

Finally, there are many non-profit and private organisations which can help with the costs of housing. Although once again the focus is usually on providing assistance to first time buyers, there is also help available for home improvements and repairs, and in some circumstances temporary assistance with costs for people undergoing financial difficulties.

The best way to find out about any such grants available in your area is to consult with your state Housing Finance Agency, as above, who will be able to offer information on local schemes to which you might be suited.

Military and Veteran Grants

Money for Military and Veterans of the Armed Forces

There is a long history of society showing its appreciation for current or previous military service through special conditions and provisions on a variety of products and services. From improved terms on financial products to discounts on buying autos, those with a service history can often enjoy preferential deals, and the same applies when it comes to grants.

Making the transition from military to civilian life can be problematic, and grants are available to ease many of the difficulties that can crop up. From grants that make housing more affordable for veterans with low income, to ones that help ex-military personnel start a small business, the range covers nearly all aspects of life.

For instance, federal grants are also available to help veterans to retrain for a new career, while there are also many grants available to help with the rehabilitation and care for those with physical or mental issues related to their service.

Grants and other benefits for veterans can be found from a variety of state and private sources, but an excellent starting point for seeing what’s available is at the Department of Veterans Affairs (VA) website. This gives an overview of the kinds of help that is available in various areas, including the following:

  • Health care including that for service injury treatment.
  • Help with income for those with a service-related disability.
  • Help with buying a home.
  • Education and retraining for a civilian career.
  • Financial services including insurance, pensions and loans.

There are also many volunteer and not-for-profit groups such as the National Veterans Foundation who can provide advice on grants and other assistance from non-government sources.

Educational Grants and Scholarships

Educational Scholarships and Grants

Scholarships are one of the most fertile areas for grants and other financial assistance, with thousands of opportunities for funding available from both federal and private sources. In general, scholarships and other educational grants are available under the following conditions:

Needs Based Scholarships

These scholarships are awarded to help students with limited financial means through college (or occasionally high school).

Federal aid alone in this area amounts to around $150 billion a year.

To get started on seeing if you are eligible for a slice of this grant money, visit here to make a Free Application for Federal Student Aid (FAFSA). Filling in this application is also required for many, but not all, privately funded scholarships.

The most well known form of needs-based grant is the government-run PELL Grants system, which helps around 8 million students of various backgrounds every year.

Merit-Based Scholarships

These are awarded, as the name suggests, on the basis of the student having achieved distinction in a particular field, whether this be in academic study, athletic prowess, or other exceptional ability.

You may be more of an overachieving than you think; with some creative thinking you can often mold your experiences into  the criteria many of the merit-based programs require. Because it’s ‘free money’, look into the details of some of these scholarships, you’d be surprised what you may qualify for.

Here are some merit-based funding sources worth checking out:

These are just a few of the many merit-based funding programs available. Search google for more, it may seem overwhelming at first as you go through the application criteria and policies–it can seem byzantine.

But, hey, if you’ve got more time than money, it’s worth digging around to find your free money amongst the many sources on offer in the merit-based realm.

Student Specific Awards

These are scholarship grants awarded to students who belong to a specific section of society, such as being from an ethnic minority, following a certain religion, having a particular medical condition, or myriad other possibilities. These scholarships are most often offered by private, special interest non-profit groups.

Career Specific Awards

These are scholarships offered to people wishing to pursue a specific career, and are usually granted by private organisations or related businesses to students who have shown particular potential in a field.

In all the above cases, the US Department of Education website gives more information on how to find and apply for educational grants and scholarships.

Unclaimed Assets, Tax Refunds, and Similar

Unclaimed Property, Assets, Taxes

This final section concerns a category that although technically doesn’t include grants, it can be another source of money to which you may be entitled.

When the government or another agency such as a bank owes you money which you haven’t collected for whatever reason, it is classed as unclaimed and will be held in lieu. This also applies to other assets such as property, unclaimed inheritances, unpaid tax refunds, and so on.

Unfortunately, there is no single source you can consult to see what you might be owed under all of these circumstances, and this has provided an opportunity for fraudsters to operate scams where they claim to be from a government department, holding assets to which you are entitled, that they will release if you pay an ‘administration fee’. These offers are, of course, entirely bogus and you’re very unlikely to see any results after paying the fee.

Bearing this in mind, how can you find out if you’re owed anything? The following will provide a starting point for just four of the possibilities.

  • State Search – The free search facility at the National Association of Unclaimed Property allows you to check state records for details of unclaimed assets including funds and property.
  • Unpaid Back Wages – the US Department of Labor holds details of unclaimed wages, searchable by employer.
  • Unclaimed Banking Funds – The Federal Deposit Insurance Corporation holds details of money owed to private individuals as a result of bank failures, and you can submit a claim at FDIC Unclaimed Funds search when you have not already made one.
  • Tax Refunds – Millions of dollars in tax refunds go unclaimed every year. If you expected a refund and it was not delivered, you can check its status at IRS Refunds.

A Final Word: Grants = ‘Free Money’

Attractive though this idea of free money lying unclaimed may be, it’s worth repeating that you need to be very careful about any service which charges a fee for uncovering any possible claims you may have.

Although grants, scholarships and other awards offer a genuine chance of ‘free money’, if an online opportunity looks too good to be true, then be very cautious indeed. Private grants are attainable but do your due diligence.

Always seek advice from an official state, local government, or non-profit adviser before proceeding with any application. Not only will you avoid any chance of being duped, but your chances of success with legitimate funding sources will be greatly increased.

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