Federal and State Government Funding

Have you seen that late night commercial with the boisterous salesman who skips through the streets of the capital with dollar bills pinned all over his suit? He is pitching the book he has written about obtaining federal grant money. Millions of dollars are going unclaimed he says, and if only you’ll buy the book you’ll get a huge grant to fund that education, start-up that business, or even take that trip to a far-flung place. While this advertisement is targeted to would-be (and gullible) entrepreneurs, it reinforces a myth that the federal government freely gives away a lot of money with absolutely no restrictions.



If only obtaining competitive government grants were as easy as is claimed on a late night commercial. It’s not. In some cases, more than 1000 tax-exempt organizations compete for just a handful of federal awards. To beat the odds, your challenge is to identify potential grant opportunities, assemble a grant development team, prepare an innovative program plan, and apply top-notch proposal writing skills in responding to bids.

This article contains two parts. In the first part, I have tried to provide answers for the most frequently asked questions. The second portion of the article discusses in detail the steps for writing a federal grant proposal. Some of the information in this article was taken from interviews with staff from the Department of Labor and Department of Education.

Part One: Questions and Answers

How do I find out about federal grant opportunities?

The federal government’s web site at www.nonprofit.gov is a valuable resource for finding out current information on specific federal funding streams. It is the gateway to the major federal agencies that deal with nonprofits and provides links to a host of other government resources. Many federal agencies now update their own web sites with a calendar of upcoming grants, along with complete application packets available to be downloaded. Keep in mind that government grantmaking changes substantially each year.



The availability of grants is widely published in the Federal Register and the Federal Domestic Assistance Catalog (available on-line at www.nonprofit.gov); Internet listings, such as the Grantsmanship Center at www.tgci.com; application packets distributed through the mail, and private publications such as the Federal Grants and Contracts Weekly and Federal Assistance Monitor. While subscriptions to these private publications are expensive, they comprehensively track federal grants and provide insight into new funding opportunities.

Some government agencies send out grant application kits to mailing lists of potential bidders. You can use www.nonprofit.org to identify federal agencies that match the mission and programs of your organization, and request to be added to their mailing lists in advance of grant announcements. I actually prefer to download grant applications from the Internet. More and more, federal agencies are including application kits and forms in Microsoft Word or Word Perfect formats. The only danger with downloading application kits from the Internet is that you may not receive updated information that is mailed by the issuing agency. Keep monitoring the agency’s web site to watch for updates in the application, answers to questions asked by other bidders, and (occasionally) application deadline extensions.

What types of grants does the government make?

Beginners and experienced managers alike sometimes believe that competitive federal grants are available for unrestricted purposes—to support existing program initiatives already offered by their organizations. Most government grants are for specific purposes based on federal legislation. Usually, applying for federal grant funding will mean that your organization must develop a plan outside of your normal programs to deliver a service requested by the government.

The federal government establishes priorities and an outline for the delivery of a specific service. Different cabinet-level agencies distribute grants for programs related to their purpose and mission. Each cabinet-level agency has a myriad of sub-agencies under its jurisdiction. For instance, the Department of Health and Human Services oversees sub-agencies as diverse as the Administration on Aging, the Centers for Disease Control and Prevention, and the Food and Drug Administration. Each of these sub-agencies is charged with issuing requests for proposals that fulfill legislative purposes.

Some programs such as Head Start are household words. Examples of other high profile agencies or programs include the Legal Services Corporation, AmeriCorps, Welfare to Work, Community Oriented Policing Services (COPS), 21st Century Learning Centers, and Ryan White (HIV/AIDS). There are more than 1,200 listings in the Federal Domestic Assistance Catalog. Many grant deadlines are repeated annually, but federal funding—ever dependent on the politics of the U.S. Congress budget process—can disappear quickly.

Formula and Block Grants: Competitive grants are referred to as “discretionary” funding. The government also distributes funds to states and counties through formula and block grants. These grants are pre-determined by demographics and previous appropriations, and are not open to competitive applications at the federal level—you’ll want to follow up these sources of funds at the state, county, and local levels.

How much money is available?

Most federal grants are awarded for a period of at least three years. The amount of funding available each year of the grant ranges vastly, from tens of thousands of dollars to millions of dollars. Knowing how much money is available for a grant program can help determine whether or not it is worth your time to develop a complete grant proposal. Sometimes a federal agency is only going to award four or five grants, and more than 100 organizations will be competing for that limited pool of funding. In those cases, you will need to evaluate:

1) Whether or not your organization has the experience and history of providing the requested service at an elite level (within the top 5 percent of similar agencies nationally.)

2) Whether or not your proposed program will be more innovative and generate more positive outcomes than competing applicants.

What factors might put my organization at a competitive disadvantage in applying for a federal grant?

Once you have a grant application packet in hand, your first step will be to assess whether or not you can develop a competitive proposal that matches up with federal guidelines. Preparing a federal grant application is time-consuming and draining. Applying for a federal grant in most cases is a major commitment that will consume many hours of time from your director, program staff, financial staff, and grant writer. It will be frustrating if you devote those resources to a grant that is poorly matched to the mission and qualifications of your organization.

Also evaluate whether or not your organization has the management experience to carry out a federal grant. Keep in mind that the worst nightmare of a federal agency is distributing grants to an organization that does not have the capacity to carry out grant activities and account for the funding received through the grant. A tax-exempt organization’s mismanagement of a federal grant can end up on the front page of the daily newspaper and as the lead story on the evening news. Bad media exposure puts federal grant programs under a microscope, and damages chances for future congressional funding appropriations. For those reasons and others, the federal government is extremely cautious about making funding awards to organizations without experience in managing and administering larger grants.

Read the application priorities and requirements carefully, and do some soul searching. Does your organization have the capacity to carry out program activities? Do you have management-level staff, facilities, and other resources to carry out a federal grant? Can your organization fulfill federal regulations associated with the grant application? A careful review of the application kit may help you determine that your organization is not eligible to apply for a particular grant program. You may also find that the required services to be delivered do not match up well with your organization’s capabilities. Do not try to force a round peg into a square hole!

Federal grants require an audit that specifically meets standards established by the government. Some grants do not support your costs for an audit or administrative expenses. Your organization’s audit costs will increase if you receive a federal grant, but you may not have funding to support those costs.

If your organization is new to the federal grants arena, you are competing against organizations, agencies, and school districts that are experienced in implementing and managing grants. Your proposed program may be much more innovative and better designed than the more experienced competitors, but you may not receive funding if you cannot assure federal administrators that your staff can handle burdensome financial and grant reporting requirements.

In some instances, your organization can overcome this problem by collaborating with an organization that is experienced in administering federal grants. This joint effort will strengthen your application, and help your organization build experience.

Do we need to hire a grant writer to develop a federal proposal?

Keep in mind that while you may have someone internally who is qualified to develop a federal proposal, the time commitment can be extraordinary. Developing a 35-page grant proposal may zap the life out of your staff and agency, but developing a document of that length is hardly intimidating to an experienced grant writer.

An outside grant writer with experience in developing federal proposals can reduce the burden on your staff and efficiently create a strong proposal. Be sure that you hire someone with strong writing skills, good listening skills, no hidden agendas, and an attention to detail. Ask for sample proposals, a list of funded federal proposals, and references. Make sure that this individual can block out adequate time to develop the proposal.

If you decide to develop the grant proposal internally, you may still want to hire an outside expert to review your proposal before it is submitted. That process will help you identify any weaknesses, and provide an opportunity to see if your plan makes sense to someone who is an outsider and has a fresh perspective.

How much time do we need to assemble a federal grant application?

It is usually wise to begin developing a grant proposal four to six weeks prior to the deadline. It is sometimes smart to allow an additional month for pre-planning and initial research. For larger grant proposals, allow even more time. While it is possible to assemble the full application in a two-week period or less, you are more likely to make serious mistakes and not have enough time to submit a polished proposal. Federal grant deadlines are not negotiable. If your proposal arrives late, more than likely it will be returned to your agency unopened.

Once we have decided to apply for a grant, how do we begin developing the proposal?

Some experts say that writing a grant proposal is two-thirds planning and one-third writing. The most organized grant applicants create files of preliminary proposals for programs they want to implement, and retrieve that information when a federal grant matching their priorities becomes available. Fortunately for the rest of us, the percentage of organizations who are organized on that level is believed to be relatively small. But it is very important to drive the grant proposal process through internal planning, rather than being driven by a grant proposal through federal requirements and priorities.

To begin responding to a request for proposals, it is important to identify a team of staff members who will develop this grant. When I am hired to develop a federal grant proposal, I usually work with the organization’s executive director or chief administrator, and one or two program staff members. In addition, I consult with the lead financial administrator to develop budget information. Below is a chart that illustrates how responsibilities for drafting a grant proposal might be divided among your staff members.

Sample Grant Development Team

Staff Member Responsibilities

Executive Director or Chief Administrator
Develop the vision and program outline for responding to the grant application. Provide information on organization’s capabilities. Contact other organizations and partners for letters of commitment. Assist in developing staffing plan and budget. Verify narrative and budget information. Sign all assurances and application forms.

Program Staff
Develop the specific program model that responds to application questions. Identify statistics that verify the need on a local level, or sources for those statistics. Establish an evaluation model. Assist in developing staffing plan and budget.

Finance Administrator
Refine and review budget information. Verify cost items. Identify hidden costs and expenses that the organization will be required to absorb if the proposal is funded.

Grant Writer
Review grant application, and ensure that staff members are aware of all requirements. Research local need. After gathering information from staff, develop a rough draft of proposal, budget, and budget narrative. Highlight questions that are unanswered. Meet with staff to revise proposal.

Other Staff or Outside Consultants
Review grant proposal, making comments


It is smart to involve a grant writer at the beginning of the process. It is much more difficult for grant writers to develop a proposal when they are not involved in advance planning. You will create more guesswork and frustration for them. When conducting a planning process, outline the steps for implementing your project in as much detail as possible.


Some federal grants require collaboration from other organizations in planning the grant proposal and/or implementing your program. Applicants are frequently required to include letters of commitment from partnering agencies. You may want to invite representatives from outside organizations to be a part of the planning group. That extra effort will strengthen your proposal substantially, and make it much easier to establish commitments and partnerships. When possible, be sure to develop strong partnerships that involve other organizations actively in the delivery of program services. Federal grant reviewers can see through “paper” partnerships where other agencies have only a slight or passive role in the project.


Federal agencies often host bidders conferences to explain the grant application packet and answer questions. These meetings are your opportunity to ask questions of the agency staff members who assembled the grant application kit. It is a very important opportunity to learn more about their priorities and other information that may not necessarily be included in the application kit. Even the most experienced fund raising professionals will not miss these meetings, which are sometimes held as video conferences, simultaneously broadcast to different sites around the country.


The grant packet will usually include phone numbers for a program officer, who will have knowledge of the specific grant application content, and a grants administration officer, who will answer questions related to general federal administrative guidelines. Sometimes you are required to submit any questions or comments regarding the grant application by a certain date. Frequently any questions beyond basic clarification queries are documented and distributed to all bidders, either through the mail or on a web site.


When possible, I like to ask organizations that have written successful proposals to the same funding agency for a copy of their application. Reviewing their grant package helps me generate ideas for creating a proposal. It also helps me understand the type of information reviewers respond to favorably. All funded federal grant applications are public record. If an organization is not willing to share the information, you can request it from the federal agency.


What are some reasons that federal grant proposals are turned down?

Quality of application: Government agencies always score the proposal based on a points system. Criteria for scoring are listed in the proposal packets. You will be required to attain a certain number of scoring points to be considered for a grant. According to reviewers and federal staff, common mistakes include omission of requested information, poor understanding of the grant program’s goals, unrealistic goals and objectives, and weak evaluation models.

Fatal Mistakes: While it seems incomprehensible, I have been told by federal officials that many applicants fail to follow proposal guidelines. These omissions can sometimes automatically eliminate your application from consideration. Sometimes applicants build activities into their program model that violate federal regulations explicitly listed in the application packet.

Geographic considerations: Grants are often awarded in strategic areas across the country. In some cases, a specific number of grant applications will be awarded to rural areas, and the balance to urban areas. In other instances, a federal agency may only be willing to fund one grant for your region. If another local organization receives a slightly higher score on the grant application, it will receive the funding.

Political considerations: Occasionally, politics come into play over the distribution of grant funding. In my opinion, the federal grantmaking process is far more democratic and objective than foundation and corporate giving. But to say that influence never plays a role in decision-making is not accurate. In any case, you should stay away from ever “politicking” for a federal grant because it will more often hurt your cause than help it.

Internal factors: Sometimes mysterious things happen within a federal agency just as a grant review is occurring. The way that funding is distributed may change because of these factors.

Limited funds: You can be approved or recommended to receive a grant, but then be told that there is no more funding available. In the end, federal agencies have some discretionary powers to make final decisions.

Who reviews a federal grant proposal?

Federal grant proposals are typically reviewed by agency staff or outside reviewers from different geographic areas than your own. The proposal packet will usually describe how the application will be reviewed. Sometimes, your application is reviewed only by internal staff from the granting agency.

Usually, paid outside reviewers are brought in to review the proposal, spending a full week in a hotel room looking over grant applications. In some cases, the federal government is desperate to find reviewers, and some of the people who look at your proposal may have limited knowledge of the subject area. For those reasons, use simple language, avoid jargon and never assume that a reviewer will understand basic concepts that seem implicit.

Also keep in mind that these readers are scrutinizing 15 or 20 different proposals for the same project. Make their job easier by keeping the proposal simple, easy to follow, and closely matched with proposal guidelines. Be sure that key components of your program are stated clearly, and will not accidentally be overlooked. Never assume that reviewers are familiar with your local service area.

Case Study: U.S. Department of Education’s 21st Century Learning Centers

In 2000, the U.S. Department of Education will make between 350 and 500 grants and $185 million available to school districts across the country. The department has established a peer review process. A team of three reviewers will score a set of 15 different grant applications. These teams will be interdisciplinary, with members representing a community-based organization, a university or school district, and a social service agency. Some reviewers may come from rural areas, some from urban or suburban areas.

Each team member will independently read and score the same set of grant applications. Afterwards, reviewers will come together as a team to discuss the proposals. If there are major discrepancies, team members will develop a case to convince their peers to lower or raise scores.

The department uses statistical methods to standardize scores. If a set of reviewers is overly generous in rating grant applications, scores may be lowered. After statistical standardization, the Department of Education will rank applications by the total points they received. Staff members will make sure that applications recommended for funding are consistent with federal regulations, and budget expenses are allowable by federal law. Only in extreme cases will staff members override decisions made by the review team. Click here to continue to Part 2