Practical Civics

When people hear the word “grant,” it often sounds like free money available to anyone with a good idea. In reality, grant funding is structured very differently depending on whether you are a government entity, a for-profit business, or a nonprofit organization.

Government agencies like counties, municipalities, or their individual departments, can apply for federal and state grants designed specifically to support public services such as infrastructure construction or maintenance, emergency response equipment, educational programs, and environmental protection initiatives. These grants are funded by taxpayer dollars and are intended to benefit the public as a whole. Governments are usually seen as low-risk recipients because they have established accountability systems, public oversight, and virtually no chance of disbanding and disappearing into the abyss. While government grants are by no means “easy” to obtain, they are more widely available.

Nonprofit organizations have access to grants from a much larger mix of sources. In fact, some government agencies create outside nonprofits (a-la Friends of the Caroline County Library or the Caroline Medical Adult Daycare Foundation) to be able to fundraise and access these grant funds that are not available to governments. Nonprofits can apply for grants from private foundations, corporations, and philanthropic institutions or even individuals. To qualify, they must demonstrate a clear public benefit – whether that’s providing social services, preserving history, supporting the arts, or addressing other community needs. Unlike governments, nonprofits must consistently prove their impact and financial responsibility to maintain their funding. Many successful nonprofits have a specific grant writer position (paid or volunteer) to keep up with the paperwork involved in finding, applying for, tracking, and reporting back on grants.

For-profit businesses, however, face severe limitations when it comes to receiving grant funding. Traditional grants are rarely awarded to businesses as grant makers are usually more concerned with their monies benefitting the public as a whole rather than just one business. That said, there are exceptions: certain grants exist for small businesses and startups, as well as companies working in important areas like technological innovation, medical research, agriculture, or economic development. These opportunities are pretty competitive and narrowly focused, and require the businesses to demonstrate how their work serves a broader public purpose. If you’ve checked out at Walmart or Taco Bell and been asked to round up recently, that’s because big corporations like these often create their own nonprofits, but rather than doing so to receive grant funding, they usually give out grants.