A grant is something of value provided by the Federal Government to a non-Federal entity in some form for the purpose of an enacted public policy.
A federal financial assistance award making payment in cash or in kind for a specified purpose. The federal government is not expected to have substantial involvement with the state or local government or other recipient while the contemplated activity is being performed. The term “grant” is used broadly and may include a grant to nongovernmental recipients as well as one to a state or local government, while the term “grant-in-aid” is commonly used to refer only to a grant to a state or local government. (For a more detailed description, see the Federal Grant and Cooperative Agreement Act of 1977, 31 U.S.C. §§ 6301–6308.) The two major forms of federal grants-in-aid are block and categorical.
Block grants are given primarily to general purpose governmental units in accordance with a statutory formula. Such grants can be used for a variety of activities within a broad functional area. Examples of federal block grant programs are the Omnibus Crime Control and Safe Streets Act of 1968, the Housing and Community Development Act of 1974, and the grants to states for social services under title XX of the Social Security Act.
Categorical grants can be used only for specific programs or for narrowly defined activities. They may be formula or project grants. Formula grants allocate federal funds to states or their subdivisions in accordance with a distribution formula prescribed by law or administrative regulation. Project grants provide federal funding for fixed or known periods for specific projects or the delivery of specific services or products.
Definition of Grant
31 USC 6304 defines grants as follows:
§6304. Using grant agreements
An executive agency shall use a grant agreement as the legal instrument reflecting a relationship between the United States Government and a State, a local government, or other recipient when-
(1) the principal purpose of the relationship is to transfer a thing of value to the State or local government or other recipient to carry out a public purpose of support or stimulation authorized by a law of the United States instead of acquiring (by purchase, lease, or barter) property or services for the direct benefit or use of the United States Government; and
(2) substantial involvement is not expected between the executive agency and the State, local government, or other recipient when carrying out the activity contemplated in the agreement.
Definition of Grant
31 U.S.C. 6501(4) of title 31 defines grants as follows::
In this chapter—
(4)(A) “grant” (except as provided in subparagraph (C)) means money, or property provided instead of money, that is paid or provided by the United States Government under a fixed annual or total authorization, to a State, to a local government, or to a beneficiary under a plan or program administered by a State or a local government that is subject to approval by an executive agency, if the authorization—
(i) requires the State or local government to expend non-Government money as a condition of receiving money or property from the United States Government; or
(ii) specifies directly, or establishes by means of a formula, the amount that may be provided to the State or local government, or the amount to be allotted for use in each State by the State, local government, and beneficiaries.
(B) “grant” (except as provided in subparagraph (C)) also means money, or property provided instead of money, that is paid or provided by the United States Government to a private, nonprofit community organization eligible to receive amounts under the Community Services Block Grant Act (42 U.S.C. 9901 et seq.).
(C) “grant” does not include—
(i) shared revenue;
(ii) payment of taxes;
(iii) payment instead of taxes;
(iv) a loan or repayable advance;
(v) surplus property or surplus agricultural commodities provided as surplus property;
(vi) a payment under a research and development procurement contract or grant awarded directly and on similar terms to all qualifying organizations; or
(vii) a payment to a State or local government as complete reimbursement for costs incurred in paying benefits or providing services to persons entitled to them under a law of the United States.