Seeking Federal Grants: There’s No Such Thing as Free Money

Kent Hornberger

by Kent Hornberger, GPC

Member, Board of Directors – Grant Professionals Certification Instititue

I often get calls from people who have been told that private and governmental grants are free money. We’ve all see books and infomercials claiming that there are ways to get free money from the United States government. Sadly, that’s not really the case.

We need to debunk that “free money” concept!

Fact #1: Federal $$$ cannot replace your existing operating budget. You must do something new or expanded with your grant.  Federal grant funds may only supplement what you are doing, not take the place of existing funds.   Federal funds will not replace the funds you currently spend.  Don’t expect them to deliver the same services to the same number of people you already help.

Fact # 2: Federal grants are highly competitive. More and more applicants are competing for decreasing available dollars.   Grants are won through a competitive, time-consuming process.

It takes dozens (often hundreds) of hours to develop a proposal that is often a gamble. Choose carefully when deciding to prepare and submit an application.

Fact #3:   It’s possible that a grant may even cost your organization money.  Yes, it may cost you more to implement the grant that the revenue you receive.   Time is money and it will take time to track and report on the grant money. Adding staff means someone has to supervise them.  Many Federal grants often do not allow you to recoup many of the costs associated with grants administration including preparation and writing.

The federal government does not send you a big, fat check when you receive a grant award. They reimburse the expenses you incur from an approved budget.  Sometimes you can receive a modest advance, but you must have sufficient cash flow to pay for expenses prior to reimbursement.

Use your resources wisely.