The Myth Of Free Grants

The Myth of Free Grants: Cash with Obligations

"Free money! No-obligation, totally free!" Then, enter a smiling entrepreneur who breathlessly enthuses, "I got $40,000 for my small business!" Sound familiar? You probably saw that pop right on your screen while surfing on the Internet. Heck, I won't even be surprised if you say you read it from your local newspaper or heard it over the radio. It's practically the longest-running money- making scheme around – and the most tempting. Why? Read the advert again. No Obligation. Ah, the things we do (or don't do, in this case) for free money. However, contrary to what a lot people are being made to believe, these free grants constantly being touted on the Internet and the mass media may not exist at all. At least, not in quite the same way we believe it does. In truth, neither the U.S. government nor any philanthropic organization is giving away "free grants". Money, yes, but not free, as in the saying "free as a bird." Common sense and the most basic awareness of business principles should tell you that no one besides Mom and Dad (and even that earns a "maybe") will give you no-strings-attached money to start a for-profit business. "If the government was in the position of providing all of the funds for free to people who start their own businesses, we wouldn't last long," says Mike Stamler, a spokesman for the U.S. Small Business Administration in Washington, D.C. "Not to mention that the American people would never stand for the government setting individuals up in business at no cost, and all at taxpayer risk," he further adds. In his book American Government and Politics, Jay M. Shafritz defined a grant as a "gift that entails certain obligations on the part of the grantee and expectations on the part of the grantor." The operative word to remember in getting free federal grants is obligations. Every free federal grant you receive comes bundled with certain obligations and responsibilities that you need to fulfill or comply with. Non-compliance of the obligations stipulated in a grant usually means you get loads of legal troubles to grapple with. In this regard, a grant, therefore, is essentially a contract in that you are bound to fulfill your end of the bargain. If you don't, penalties would be imposed.

Who are entitled to free federal grants? MYTH #1: Anyone can get free federal grants. At some level, anyone is indeed entitled to grants given by the U.S. federal government. For as long as you have all the necessary qualifications, then there is no reason why you should not be awarded a grant. But, FACT: Grants are not gratuitous like a donation. Indeed, they are more like a loan in that you need to apply and qualify for a free grant program. A federal grant is onerous, which means that there are conditions and obligations that require compliance. And often, these obligations and conditions are major, the amount of money you receive from the grant dependent on how large-scale or important the project is. Because of that, it is most often the case that free federal grants are awarded to organizations that have major projects, deemed to benefit the community. Why organizations? Because organizations usually have the means and the ways to accomplish the project within the stipulated terms and conditions of the contract of grant. But that is not saying though that grants cannot be awarded to individuals like you. If you are deserving, then why not? The following are some samples of projects that the Federal Government may "award" to deserving individuals or organizations, giving them funding for: - A neighborhood street paving project

- A state-wide program to re-train displaced workers

- A project to attract new businesses to a depressed downtown area

- A regional water conservation program

- A county-wide flood control project

What does a free grant entail? MYTH #2: Free grant is free, no-strings money. When, FACT: A grant is neither free nor does it come with no strings attached. In addition to compliance with the terms and conditions, the Federal Government also imposes other conditions in a grant. For one, organizations that receive free federal grants must adhere to strict oversight performance standards. You are chosen to do something that would ultimately redound to the benefit of the community and you are expected to do a good job at it.

If you fail, then there's every chance that the government may revoke your grant. Also, detailed accounting and auditing of free federal grants' project expenditures is required. The auditing of project expenditures is done at least once a year. This is to help ensure that the money you received from the government is really being used for its proper purpose. Free federal grants' fund must be spent to the last cent. If there's any money left, it must go back to the Treasury. This is only logical as the money is essentially public money appropriated specifically for the purpose of that project.

If you are not allowed to misappropriate the funds while the project is on-going, how much more with the amount that's left after the project is completed? Program goals in the free federal grant application must be carried out exactly as specified. Any project changes must go through the government and meet its approval. Again, this only makes sense. The grant being from the government, it should have the final say in whatever changes you have in mind for the project. If you make any changes to the project without the express approval of the grantor, that may give them the right sue you for breach of your obligation to comply with your contract of grant. And lastly, project phases must be completed upon the deadline. And the project must be completed successfully.

What happens if there is breach of grant obligations? Failure to comply with the free federal grants' requirements on the part of the grantee will result in penalties. Penalties for free federal grants non-compliance could range from economic sanctions to prison if there is improper use or theft of public funds and such is proven.

Can you avail of money from free federal grants? MYTH #3: Applying for free grants is easy. FACT: The task of applying for a grant can be daunting. Certain skills are required. Most free federal grants' beneficiaries are federal agencies, states, cities, colleges, universities and research organizations. Applying for free federal grants takes some expertise in preparing the applications.

For this reason, individuals do not usually qualify for free federal grants. As a matter of fact, those who actively seek grants employ staffs just to facilitate the application for and administer free federal grants alone. However, if you are really determined to get a slice of that enormous fund approved by Congress, then you need to have sufficient information and skills in order to compete with those huge organizations that naturally want a chunk of the government grant, too. Keep in mind that most federal grants are awarded to major projects that give the most benefit to the community.

That being, it cannot be gainsaid that these community-based projects will most probably include construction. So unless you are very well-versed with the construction or building processes, you will certainly have a difficult time applying for the grant alone, considering how your application must describe in detail how you plan to accomplish your proposed task.

Who awards free federal grants? MYTH #4: Anyone – from non-profit organizations to community- based entities can award you free federal grants. FACT: The term "free federal grant" is treated as a misnomer. It is not free. And some people actually refer to loan programs run by non-profit organizations as "federal grants" when they aren't. Federal grants can only be given by the Federal Government, hence, the name.

The projects proposal coming from agencies, President, states, cities, et cetera will be decided by congress. Congress has the final say as to how much free government grants' money the program will get. Upon approval of the federal budget, funds for free government grants projects are available and announced in the Federal Register for the entire year. Projects that approved to be awarded free government grants will appear in the Catalog of Federal Domestic Assistance or the CFDA. The CFDA is the division that lists all free government grants and assistance programs managed by 57 federal agencies. You can find CFDA's website at CFDA.gov. Searching The CFDA website for free government grant money is free of charge.

In the website, several government agencies that have been allocated government money by Congress to award as grants are listed. These agencies include:

- Department of Education Grants and Contracts Information

- Department of Housing and Urban Development (HUD)

- Department of Justice (DOJ)

- Department of Transportation (DOT)

- Environmental Protection Agency (EPA)

- Federal Emergency Management Administration (FEMA)

- National Institutes of Health (NIH)

- Stopping Violence Against Women and Community Oriented Policing Services (COPS)

- The Department of Health and Human Services (HHS) has over 300 programs which you can apply for free government grant money to fund your project. Eligible persons or organizations with plans that fall under the different project categories approved by congress may apply to the concerned department to get a portion of the total free government grants allocation under that project. For instance, Department of Housing and Urban Development (HUD) has been allocated by congress with $22 million to develop "Public and Indian Housing Drug Elimination Program". If you think that your project will contribute to this program you may apply to HUD to get a portion of the $22 million free government grant. Another example is the Department of Health and Human Services or HHS. Congress has allocated $20 million to the Department for cancer-prevention projects. This means that if you or your organization has a project that could help prevent cancer then you can submit free government grant application to HHS. Most U.S. government grants, however, are handed down to the local level where you apply. The same thing applies with non-profit grants. You can get your money right in your neighborhood.

More Information on Free Federal Grants MYTH #5: Free grant information is easy to find. Just type the word "free grant" in any search engine and follow the links provided. FACT: Do not believe everything you read on the Internet. There is every chance that the so-called free grant program you are considering is a scam. If you want a legitimate source of free grant information, then check the sites provided below: Aside from the CFDA website, information on free government grant money could also be found on Grants.net, Non-profit Gateway and The Foundation Center. GovBenefits was recently launched to cater to the public's need to be informed of benefit programs that one can avail of. Whether you need free grant info on road projects, emergency funds, student scholarship grants, et cetera, GovBenefits may provide you with the information you need. Free grant info by GovBenefits can be accessed at GovBenefits.gov.

The site is actually a government initiative spearheaded by President Bush. Their aim is to make e-government initiatives more citizen-focused, allowing ordinary citizens like you a better chance at getting free government-funded grants for your community-oriented project proposals. As a free grant search online tool, GovBenefits allows everyone to access and consequently avail of government benefit programs that are designed to help you. This free grant search intends to lessen bureaucracy and give efficient service to the people by doing away with most (if not entirely all) of the paper work. Some government grants, however, may only be awarded to specific types of people. For instance, student grants may only be given to students, such as the Federal Students Aid or FAFSA, which is another government-initiated funding program for student resource.

FAFSA website can be found at FAFSA.ed.gov and contains not only information for student aid, but loans and campus-based student aid programs as well. To apply, FAFSA requires only that you follow its seven-step application guidelines, inquiring about your personal data, school plans, financial status and many others.

What are the types of grants awarded by Congress? The government allocates different types of free government grant money. One of these is formula grants, which are free government grant money distributed for continuing activities according to formula prescribed by law. Another is project grant. A project grant is free government grant money used to fund a specific project for a specific period without sanctions for failure to perform, such as research, training, scholarship grants, et cetera. Direct payments for specified use are free government grant money given to individuals or private organizations that require particular performance from the grantee such as Medicare. Direct payment with unrestricted use, on the other hand, is free government grant money given directly to beneficiaries who satisfy federal eligibility such as pension, retirement, et cetera.

The truth behind free federal grants is that with federal funding cutbacks and intense competition to avail of them, seeking free federal grants can take a lot of time and money with no guarantee of attaining free federal grants. Free federal grants require a lot of legwork for the applicants. These free federal grants obligate the grantee/s to fulfill some responsibilities. Free federal grants come with a price tag too.