The Disparity Between Federal Grants And Private Grants

Federal grants are provided by the government to organizations, agencies, businesses and individuals who are in need of assistance to continue their education, business or public service. Grants do not require payment unlike loans, but the application process can be rigorous.

Government grants are offered referred to as free money, but the truth is that along with the grants are obligations. There would responsibilities that the recipient needs to complete so as to avoid any legal infringement.

The difficult thing about federal or government grants is the competition. There are different groups and agencies applying for federal grants, sometimes, grant proposal can easily be patterned to other programs who have been awarded with grants. This can increase the possibility of being awarded with grants.

Another sad thing though with federal grants is that it usually takes a year before a non-profit organization or institution can actually get the grant money. What causes this? If your organization or the individual is located in a rural area, that can be a factor since the grants allocated for that area can be limited. Most grant money or allocation is kept away for existing or ongoing projects. Actually, this can also happen in larger and urban areas.

Another problem can come from technical problems like misinformation in the application or just missing out a point in the grant application and proposal. The application can be rejected without due notice.

Most of the agencies concerned with the grant are tied up with other work which is why you get response slower. It would take time before you notified of approval, rejection or even forwarding of funds for the project.

These reasons could push an organization to get private funding and grants instead. When we are talking about private grants, these are funds provided by foundations or corporations. There are about 70,000 private foundations in the United States and statistics are showing that they what they give as grants or aids are increasing every year.

The reasons why foundations are doing this is because they do not want to lose their tax exemption. Federal law requires foundations to give away 5 percent of what their assets and incomes value each year.

Non-profit organizations can benefit from this foundation characteristic. If a non-profit organization can come up with a solid plan of solicitation and collaboration with a foundation, then they could get funding for their projects and programs without undergoing the arduous process like when applying for federal and government grants.

To encourage a healthy relationship between non-profit organization and a foundation, experience is valuable. If the foundation has fostered a relationship which includes volunteerism in the goals and activities of the non-profit organization, it is likely that they would continue partnership with them.

When applying for private funds or grants, it is important to know everything about the foundation you would like to work with or ask foundation from. Upon identifying which foundation you would like to solicit from, go ahead and contact them. This would provide you with first-hand information about the foundations priorities and interests.

Similar when applying for government grants, you would need to create a grant proposal. It should be concise and informative as possible, but still leave an impression. Foundation board of directors or grant reviewers would convene a few times in a span of time and they review the proposals. So you want to pass something that would get and retain their attention. Avoid being too creative though, you would like to maintain formal and business relationship.

Federal grants and private grants are available for those individuals and organizations who are in need of help. You need to weigh which one is best appropriate or your needs and can address your financial woes.


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