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Federal Government Funding

Federal government funding is not benefits or entitlements. It is an award of financial help from the federal government to a recipient to carry out certain public purpose of support which is authorized by the law of United States. These are not federal assistance or loans to any individuals. These grants cannot be used to buy property or services for the government’s direct benefits. There are about 26 federal agencies which offer over 1000 grants in different categories.

The funds from these Federal government funding agencies are dispersed to states and various communities through a range of mechanisms, which is designated to serve a particular purpose. Each federal government funding comes with its own set of rules and regulations. The funding machinery of a particular funding resource has an impact on the methods employed to access funds.

The main types of federal government funding are entitlement programs, formula or block grants, project grants, contracts, demonstration grants, direct payments, and loan guarantee.

Entitlement programs promise that, the fund will be served to all who meet certain eligibility criteria. Some of these funds are dispersed directly to state agencies, while in some states; city or county governments run this program. Formula or block grants offer the states with a fixed share of funds to the respective states on certain formula. Unlike the entitlement funds, these funds don’t guarantee to serve all those who are eligible. Discretionary or project grants back a broad spectrum of federal efforts, from stopping juvenile criminal behavior to improving infant health results. Depending on the program needs, the respective agencies can straight away apply to the sponsoring federal government funding agency to have access to these funds. Mostly it is dispersed through a competitive bidding process. Contracts funding requires a provision of specified services and sometimes the contractors have to meet specific performance standards. The demonstration grant involves a small number of sites in an attempt to study about the usefulness of a new program or approach. These are usually pilot projects and the funding is awarded on competitive basis. Direct payments are those payments paid by the federal government funding agency directly to the beneficiaries, who satisfy the federal eligibility criteria. Loan guarantee or loan funding enables private and public entities, community based organizations, and some business houses to borrow funds, mostly below market rates for specific intentions. These loan funding go directly to the applicant and he is the sole authority to repay the loan.

Some of the 26 federal government funding agencies are the departments of Agriculture, commerce, defense, education, energy, health and human services, homeland security, housing and urban development, interior, justice, labor, state, transportation, treasury and veterans affairs.

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