Many people do not know there are different types of grants. These grants range in funding restrictions, who is eligible, and how often the grant is distributed. Before applying for a grant, make sure it is in your best interest because a grant that is good for one person may not be applicable to another. Below is a breakdown of different types of grants.
Restricted Grants vs. Unrestricted Grants
Foundations of grants set the level of limitation for their grant. Restricted grants have a high level of restriction. These grants typically have a specific purpose. For example, if an individual is approved for an education grant, it must only be used for education. This person does not have the freedom to apply some of the funds towards school and use the rest to pay off their car. If the individual does not comply with the imposed regulation, it will be a poor reflection on them. This will make them have a hard time receiving a grant in the future. On the other hand, unrestricted grants do not have any restrictions. This type of grant is seen more as an award. The individual has the ability to put the funds towards their needs.
Competitive vs. Formula Funding
Competitive funding is one of the most common types of grants. It can also be referred to as discretionary funds. This is where an individual submits an application that is evaluated by the foundation. The foundation chooses a winner and awards that person the grant approval. The person approved for the grant can be anyone that applied. Each candidate has an equal opportunity to be chosen. In contrast, formula funding has designated candidates. The recipients are predetermined. For example, if a certain group or population of applicants all meet the criteria of the application, they are all entitled to funds. This type of grant is non-competitive
Continuation funds allow recipients to renew their grant. Grants normally expire or are a one time award. In this case, if the individual is permitted the opportunity they can receive extended funding. This is based on the availability of funding and the individual’s prior performance. Meaning, if they used the grant money for its intended purpose and if they met the set objective. Most continuation funds are available to existing grant recipients, but can be extended to new applicants as well.
This grant is from the federal government and given to states to distribute to local government for further distribution. Candidates who apply for this grant are only competing with people in their state. This makes the process less competitive. As this type of funding is easier to win, it’s also a smaller value compared to other more competitive grants.