The OpenGrants Encyclopedia

Grant funding moves money from a government agency, foundation, or company to an organization carrying out work the funder wants done. Nobody repays it and no ownership changes hands. The price is competition, restricted use, and reporting obligations that outlast the spending. Rules differ sharply by funder type.

Key takeaways

• A grant funds a public purpose; it buys nothing for the funder.
• Funder type sets the rules; subject matter sets only the topic.
• Eligibility and registration decide more applications than writing quality.
• Winning starts an obligation lasting years past the last expenditure.
• Every claim is sourced; volatile figures are quarantined and dated.

What is the OpenGrants Encyclopedia?

The OpenGrants Encyclopedia is a free reference on how public and philanthropic funding works and how organizations win it. Coverage runs across eight subject areas: the structure of the funding system, finding and qualifying opportunities, organizational readiness, proposal writing, budgets and grant finance, evidence and evaluation, funder behavior by type, and award management.

The intended reader is a practitioner rather than a browser. Nonprofit staff, founders pursuing non-dilutive capital, research administrators, municipal and economic development staff, and independent consultants work from one underlying rule set, stated here plainly rather than as funder marketing.

Sourcing follows one discipline. Every eligibility rule, deadline mechanic, dollar figure, and legal claim carries a primary-source link at the point of the claim — the Code of Federal Regulations, the United States Code, agency policy, the IRS, and the Government Accountability Office — with sector research labeled as secondary.

Commercial disclosure belongs up front. OpenGrants is a commercial grant discovery platform, and it publishes this encyclopedia. Articles are written to be useful to readers who never become customers, and the editorial standards are published at /editorial-policy.

How does grant funding actually work?

Grant funding is a legal transfer of money or value so the recipient can carry out a public purpose, not a purchase of goods or services for the funder’s own use. Federal law states the test directly: an agency uses a grant agreement when the principal purpose is “to transfer a thing of value” to carry out a public purpose and “substantial involvement is not expected” (31 U.S.C. § 6304).

Everything else follows from that definition. Money arrives conditionally, use is restricted to the approved purpose, and acceptance binds the recipient to enforceable terms. How the cycle moves from appropriation to audit sits in Grant Funding Fundamentals.

Two distinctions do most of the early work. Competed money and formula money are selected differently, as covered in types of grants explained. And funders decide in stages rather than in one judgment — a legal screen, a merit review, then a selection step where scores meet portfolio and policy — described in how funders decide who gets money.

How do you find grants you can actually win?

Finding winnable grants starts with hard filters — eligibility, geography, funder type — before topic keywords, and treats search as a standing subscription rather than an event. Search strategy, funder research, pipeline construction, and the discipline of declining bad fits sit in Finding and Qualifying Funding.

The highest-yield research move is reading what a funder has already funded rather than what it says it funds. A private foundation’s annual return itemizes every grant paid, supporting a median grant size, a geographic pattern, and a new-grantee rate — the method is in researching a funder with Form 990.

Timing is the second lever and the one most often missed. Federal notices post on the October-to-September fiscal year, state cycles follow legislative sessions, and foundation decisions follow board calendars rather than deadlines, as set out in grant timing and the funding calendar. An application started when the deadline appears is already late.

Is your organization actually ready to receive a grant?

Readiness is documentary rather than aspirational: either the artifact a funder or auditor asks for exists on demand, or the domain fails. Legal status, registrations, financial systems, program documentation, and internal controls are the five domains in Eligibility and Organizational Readiness.

Eligibility is layered and unforgiving. An applicant must be an eligible entity type, hold an active registration, meet program-specific limits, carry no disqualifying exclusions, and propose an eligible activity paid with eligible costs — failing any layer ends the application before scoring, as described in grant eligibility explained.

Organizations without their own charitable status are not excluded, but they need a different structure. A fiscal sponsor extends charitable status to a project so a funder can grant to it, with real trade-offs in control, fees, and exit — covered in fiscal sponsorship for grant seekers.

How do you write a grant proposal that wins?

A grant proposal answers six questions in sequence: is the problem real, does the solution follow from it, can the applicant execute, will success be measured, is the budget justified, and does the work survive the grant. Section-by-section craft is covered in Writing the Proposal.

Reviewers score against published criteria, not against enthusiasm. The strongest structural move is to organize the narrative around those criteria in the funder’s own language, so a tired reader working a stack of applications finds each scored item without hunting. Most proposals lose ground first at the statement of need — the method is in writing a statement of need.

Declines are normal and informative. Reviewer comments that repeat across readers point to a real defect; comments that stand alone usually do not. What to do next is in what to do when a grant is declined.

How do you build a grant budget that survives audit?

A grant budget is a structured statement of what a project costs, and every line has to trace to an activity in the narrative and to a rule permitting the cost. Cost categories, overhead recovery, match, allowability, and cash mechanics are covered in Budgets and Grant Finance.

The split between direct and indirect costs causes the most trouble, because it depends on traceability and consistent treatment across the organization rather than on the type of expense — worked through in direct vs indirect costs.

Allowability is a multi-part test, not a judgment call. A cost charged to a federal award must be necessary and reasonable, allocable, consistently treated, determined under generally accepted accounting principles, not counted as cost share elsewhere, and adequately documented (2 CFR Part 200). The tests are unpacked in allowable, allocable, and reasonable costs.

How do you prove a project will work?

Funders buy a causal argument before they buy a program, and measurement to check it afterward. Logic models, theories of change, evidence tiers, evaluation design, and the public data that makes a needs statement credible are covered in Evidence, Evaluation, and Data.

The argument is usually drawn before it is written. A one-page map from resources through activities to outputs and outcomes exposes gaps that prose conceals, and building one backward from the intended result is the standard method — described in how to build a logic model.

Precision about terms matters. An output is what a project produces and controls; an outcome is a change in the people or systems it touched; impact is the broader change no single project can claim. Conflating them produces measurement plans nobody can execute, examined in outputs, outcomes, and impact.

Which funding track fits your organization?

Funder type decides application length, relationship weight, reporting burden, overhead recovery, and speed to money. Federal, state and local, foundation, corporate, community, and innovation funding each demand a different operating model, compared in Funding Tracks by Funder Type.

Government funding is the most legible track because the rules are published in advance. Unless prohibited by statute, an agency “must design and execute a merit review process,” and “a merit review is an objective process of evaluating Federal award applications in accordance with the written standards of the Federal agency” (2 CFR 200.205). Much of that money reaches organizations through states rather than through national competitions (CRS R40638).

Private funding runs on different law entirely. A charity is presumed to be a private foundation unless it proves otherwise, and that classification sets payout obligations, disclosure, and behavior (Council on Foundations). Foundations are a minority share of American charitable giving (Giving USA 2026), which is why foundation grants and corporate giving work better as catalytic revenue than as a base.

Companies have a track of their own. Federal agencies above a stated research budget must set aside a share for small businesses (15 U.S.C. § 638), and research funders apply their own published criteria — the National Science Foundation scores every proposal on Intellectual Merit and Broader Impacts (NSF).

What happens after you win a grant?

Winning starts the obligation. Reporting, prior approval, subrecipient monitoring, payroll documentation, audit, closeout, and the operating function holding it together are covered in Managing the Award. The award document, not the announcement, states what a recipient owes.

Post-award obligations are unforgiving about silence. Closeout deadlines run from the end of the period of performance, and where a recipient fails to act, the agency “must proceed with closeout based on the information available” (2 CFR 200.344). Crossing the federal expenditure threshold adds a permanent annual audit obligation (2 CFR 200.501).

Failures compound rather than expire. The Government Accountability Office found a substantial share of federal award funds over a recent five-year span linked to audit findings that were both severe and persistent (GAO-24-106173), and that record feeds the risk assessment on every later application. The trouble states are covered in grant termination, suspension, and appeals; the machinery preventing them is in building a grants function.

Where should you start?

Start where your binding constraint is. Six reader paths cover the situations that bring people to grant funding, each ordered so the earlier article answers what the later one assumes.

Where should a nonprofit new to grants start?

1. The Grant Readiness Assessment — what funders assume you have
2. What Is a Grant? — the instrument and its conditions
3. How to Search for Grants — hard filters before keywords
4. The Anatomy of a Grant Proposal — what each section proves
5. The Anatomy of a Grant Budget — cost categories and logic

Where should a startup founder seeking non-dilutive capital start?

1. Non-Dilutive Capital for Startups — the stack beyond grants
2. SBIR and STTR Explained — phases, eligibility, agency models
3. SAM.gov Registration and the UEI — the lead time nobody plans for
4. Grants vs Contracts vs Cooperative Agreements — which rulebook applies
5. Grant Cash Flow and Reimbursement — when money actually arrives

Where should a researcher start?

1. Research Grants at NIH and NSF — two agencies, two machines
2. How to Read a NOFO — criteria first, program last
3. Writing the Project Design — activities, sequence, evidence
4. Indirect Cost Rates and the De Minimis Option — the rate and the base
5. Time and Effort Documentation — the most-questioned cost

Where should a municipality or economic development organization start?

1. State and Local Government Grants — where formula money is competed
2. Federal Grants Explained — rules that follow the money
3. Cost Share and Matching Requirements — what counts and what does not
4. Subrecipient Monitoring and Pass-Through Funding — obligations when you regrant
5. The Single Audit — the threshold that changes costs

Where should an independent grant consultant start?

1. Building a Grant Pipeline — stages, entry conditions, sizing
2. The Go/No-Go Decision — the rubric protecting client hours
3. Building a Compliance Matrix — every requirement, numbered and owned
4. Writing for the Reviewer — how proposals are actually read
5. Hiring a Grant Writer — scope, pricing, ethics

Where should an organization that just won its first award start?

1. How to Read a Notice of Award — read it before the first drawdown
2. Grant Reporting Requirements — six families, six clocks
3. Prior Approval and Changing a Grant — what you may not do alone
4. Internal Controls for Grant Recipients — the processes funders assume exist
5. Closing Out a Grant — deadlines starting at the end date

Frequently asked questions

Is grant money free money?

No. Grant funding is conditional money. Use is restricted to the approved purpose, reporting is required, costs can be disallowed and repaid years later, and federal awards carry audit exposure. Nothing is repaid on a successful award, which is a different claim from costing nothing.

Can an individual receive a grant?

Occasionally, and less often than search results suggest. Most government programs award to organizations rather than people, and foundation grants to individuals carry extra tax procedure that most foundations avoid entirely. Fellowships, prizes, artist grants, scholarships, and hardship funds are the realistic individual paths.

How long does it take to get a grant?

Plan in quarters, not weeks. Corporate and local money can move in weeks, community foundation grants in a quarter, private foundation grants across a board cycle, and federal awards in months plus registration lead time. No source solves a near-term cash shortfall.

Do you need to be a 501(c)(3) to apply?

Not always. Charitable status is required by most private foundations and by many government programs, but companies, municipalities, tribes, school districts, universities, and individuals are all eligible for specific programs. Projects without their own exemption commonly apply through a fiscal sponsor instead.

Why do strong applications still lose?

Because scoring is not the last step. Funders apply portfolio, geographic, and policy considerations after review, budgets run out partway down the ranked list, and risk records affect eligibility independently of merit. A decline reports how one panel scored one submission on one day.

Is this encyclopedia specific to the United States?

Primarily yes. Coverage centers on United States federal, state, local, and philanthropic funding, and the citations are to United States law. The structural concepts — eligibility layers, merit review, cost principles, reporting, closeout — travel further than the specific rules.

How is this encyclopedia maintained?

Maintenance rests on one decision: facts that change are quarantined so the rest of an article stays correct. Concepts, mechanisms, decision logic, and failure modes live in the body prose, while ceilings, rates, thresholds, deadlines, and success rates live in a single dated “current figures” callout at the top of each article, each row linked to its primary source. Body prose refers to the callout and never repeats the number.

Volatility isolation has a practical consequence for readers. A figure elsewhere on the web is usually undated and unsourced; here, every figure states when it was verified and against what. Treat the linked source as authoritative.

Review runs on a fixed cadence. Every article carries a last-fact-check date and a next-review-due date and is scheduled for full re-verification annually, with volatile-figure sweeps run more often across the corpus. Every article also requires review by a named human with domain expertise before publication.

Corrections are handled in public. A factual error is fixed on identification, a substantive change updates the modified date, and slugs and URLs never change after publication so citations keep resolving. Award and program data can be checked independently at USAspending.gov.

Reporting an error takes one step. Use the corrections form with the article URL, the claim in question, and the source you believe is authoritative. Reports about outdated figures are the most useful kind.

This encyclopedia is general information, not legal, tax, audit, or accounting advice, and the terms of a specific award or grant agreement always control.

Sources

1. Legal Information Institute, Cornell Law School. 31 U.S.C. § 6304 — Using grant agreements. https://www.law.cornell.edu/uscode/text/31/6304 (accessed 2026-08-11)
2. Legal Information Institute, Cornell Law School. 2 CFR § 200.205 — Federal agency review of merit of proposals. https://www.law.cornell.edu/cfr/text/2/200.205 (accessed 2026-08-11)
3. Legal Information Institute, Cornell Law School. 2 CFR § 200.344 — Closeout. https://www.law.cornell.edu/cfr/text/2/200.344 (accessed 2026-08-11)
4. Legal Information Institute, Cornell Law School. 2 CFR § 200.501 — Audit requirements. https://www.law.cornell.edu/cfr/text/2/200.501 (accessed 2026-08-11)
5. Legal Information Institute, Cornell Law School. 15 U.S.C. § 638 — Research and development. https://www.law.cornell.edu/uscode/text/15/638 (accessed 2026-08-11)
6. Electronic Code of Federal Regulations. 2 CFR Part 200 — Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards. https://www.ecfr.gov/current/title-2/subtitle-A/chapter-II/part-200 (accessed 2026-08-11)
7. Congressional Research Service. Federal Grants to State and Local Governments: A Historical Perspective on Contemporary Issues, R40638. https://www.congress.gov/crs_external_products/R/PDF/R40638/R40638.35.pdf (accessed 2026-08-11)
8. Council on Foundations. Foundation Basics. https://cof.org/content/foundation-basics (accessed 2026-08-11)
9. Giving USA Foundation. Giving USA 2026: charitable giving rose to $617.20 billion in 2025. https://givingusa.org/giving-usa-charitable-giving-rose-to-617-20-billion-in-2025-surpassing-the-600-billion-mark-for-the-first-time/ (accessed 2026-08-11)
10. National Science Foundation. Merit Review. https://www.nsf.gov/funding/merit-review (accessed 2026-08-11)
11. U.S. Government Accountability Office. Grants Management: Observations on Challenges with Access, Use, and Oversight, GAO-24-106173. https://www.gao.gov/products/gao-24-106173 (accessed 2026-08-11)
12. USAspending.gov. Federal spending and award data. https://www.usaspending.gov/ (accessed 2026-08-11)