State and Local Government Grants

State and local government grants are awards made by a state agency, county, city, or special district. Much of the money is federal, passed through the state, which makes the state agency the funder you deal with and its rules the ones that govern your application.

Current figures — verified 2026-08-11

Item	Value	Source
Federal grants to state and local governments, FY2024 (estimated)	$1.1 trillion, about 16% of total federal outlays	CRS R40638
Federal funds as a share of total state government revenue, FY2022	36.1%	CRS R40638
Federal funds sent directly to local governments, FY2022	$146.3 billion, 6.2% of total local government revenue	CRS R40638
Local governments in the United States, 2022 Census of Governments	90,837, including 39,555 special districts and 12,546 independent school districts	U.S. Census Bureau
CDBG formula split	70% to entitlement communities; 30% to states for non-entitlement areas	CRS R46733
Participation in the State CDBG program	49 states and Puerto Rico	HUD Exchange

These figures change. Verify against the linked source before relying on them. Report an outdated figure

Key takeaways

• Most state grant money originates federally and is redistributed by the state.
• A state pass-through makes you a subrecipient, with federal rules plus state rules.
• Formula money competed at the state level draws a much smaller applicant pool.
• No single portal lists state, county, city, and special-district opportunities.
• Fragmentation is the reason these programs stay under-applied.

What are state and local government grants?

State and local government grants are awards made by a state agency, a county, a municipality, a school district, a special district, or a regional authority. Within the funding tracks by funder type, state and local funding is the most under-covered track and, for most organizations, the highest-yield place to start.

The category is defined by who runs the competition, not by whose money it is. A state environmental agency competing federal revolving-fund money, a county competing its own general-fund dollars, and a transit authority competing a federal transportation allocation are all state and local grants for practical purposes: the notice comes from that body, the application goes to that body, and that body’s rules decide.

That practical framing matters because the alternative framing — organizing your search by originating agency — systematically hides money. Federal announcements describe competitions the federal government runs. They do not describe the far larger volume of federal money that reaches organizations through a state, because at the federal level that money was allocated by formula and never competed.

Scale is easy to underestimate. There are tens of thousands of local governments in the United States, counted in the current figures above, and a large fraction of them administer some form of grant, subgrant, or pass-through program.

Where does state and local grant money come from?

State and local grant money comes from two sources: appropriations by the state legislature or local governing body, and federal assistance passed through to be redistributed. The federal share is the larger of the two for most states, and federal funds make up roughly a third of total state government revenue, as shown in the current figures above (CRS R40638).

State-appropriated grant money behaves like any legislative program. A budget act or an authorizing statute creates it, a named department administers it, eligibility is set in state law, and the money is often geographically bounded to the state’s own residents or jurisdictions. Economic development incentives, state arts councils, state historic preservation offices, agricultural marketing programs, and state-funded early childhood programs are typical examples.

Federal pass-through money behaves differently, and the difference is the single most useful thing to understand about this track. Congress appropriates to a federal agency, the agency allocates to states by statutory formula, and the state agency then designs its own competition — its own priorities, its own application, its own deadlines — within the federal program’s limits. The federal government never sees your application.

Local governments receive money on both paths as well, both directly from federal agencies and as subrecipients of their state. Federal agencies also send money directly to local governments, at the scale shown in the current figures above. Congress periodically layers a large flexible allocation on top of that structure, as it did with the Coronavirus State and Local Fiscal Recovery Funds, which Treasury distributed to states, counties, metropolitan cities, tribal governments, and — through their states — smaller non-entitlement units (U.S. Department of the Treasury). Those one-time programs come and go; the redistribution architecture underneath them does not.

What does it mean to be a subrecipient of a state?

Being a subrecipient of a state means you hold a subaward of a federal award, not a state contract and not a gift. The state is the pass-through entity — “a recipient or subrecipient that provides a subaward to a subrecipient to carry out part of a Federal program” — and federal rules follow the money down to you (2 CFR 200.1).

The determination is made on substance, not on the label on the paperwork. An entity that carries out part of the federal program is a subrecipient; an entity that provides goods or services within its normal business operations to many purchasers is a contractor (2 CFR 200.331). Getting that classification wrong is one of the most common single-audit findings, because subrecipient status triggers monitoring obligations that a vendor relationship does not.

A pass-through entity must pass down a specific package of information and terms. That includes the Federal Award Identification Number, the Assistance Listings title and number, the period of performance, the indirect cost rate, and “all requirements of the subaward, including requirements imposed by Federal statutes, regulations, and the terms and conditions of the Federal award” (2 CFR 200.332).

The state also gets to add its own requirements on top. The same regulation obliges a pass-through entity to communicate “any additional requirements that the pass-through entity imposes on the subrecipient for the pass-through entity to meet its responsibilities under the Federal award.” Program regulations often say it more bluntly. Under the State Community Development Block Grant program, “a state may impose additional or more restrictive provisions on units of general local government participating in the state’s program, provided that such provisions are not inconsistent with the Act” (24 CFR 570.480(f)).

Three consequences follow. Federal cost principles and audit rules apply to the money you spend, so expenditures under a state subaward count toward the Single Audit threshold. State procurement, prevailing wage, and reporting rules apply on top. And the state must monitor you, the mirror image of subrecipient monitoring and pass-through funding.

How do states distribute federal formula programs?

States distribute federal formula programs by receiving a statutory allotment and then reallocating it — sometimes by a second formula to local entities, sometimes by a competition the state designs, and often by both. The federal statute sets the outer limits; the governor, the state agency, and the state plan fill in everything else.

Workforce funding is the clearest example. The Department of Labor allots Workforce Innovation and Opportunity Act Title I funds to states by statutory formula (DOL Employment and Training Administration). The governor then reserves a capped share for statewide activities and allocates the remainder to local workforce areas under formulas set partly in regulation and partly at the governor’s discretion (20 CFR 683.120). A service provider competes at the local workforce board, three levels below Congress.

Community development follows the same shape with a different split. A fixed statutory share of Community Development Block Grant funds goes directly to entitlement communities — principal cities, larger cities, and urban counties — and the remainder is allocated to states for non-entitlement areas, in the proportions shown in the current figures above (CRS R46733). HUD explains the reasoning directly: “Since States are in the best position to know, and to respond to, the needs of local governments, Congress amended the Housing and Community Development Act of 1974 in 1981 to give each State the opportunity to administer CDBG funds for non-entitlement areas” (HUD Exchange).

The same architecture recurs across domains under different names. Highway and transit formula funds route through state departments of transportation and metropolitan planning organizations. Education formula funds route through state education agencies to districts. Public health and substance use funds route through state health authorities. Energy, weatherization, and clean water funds route through state energy offices and state revolving funds. In each case the relevant question is not “what is the federal program” but “which state agency administers it here, and when does that agency open its cycle.”

What do county, city, and special district grant programs fund?

County, city, and special district grant programs fund what the jurisdiction is responsible for delivering: human services, homelessness response, public health, parks and recreation, arts, small business support, neighborhood infrastructure, and public safety. Local grants are typically smaller than state grants, faster to decide, and awarded to organizations already known to the staff who administer them.

Local government money arrives from three places. Some is local own-source revenue — general fund, a voter-approved sales tax or bond measure, a hotel or cannabis tax with a dedicated services set-aside. Some is federal money the jurisdiction receives directly as an entitlement community or formula recipient and then subgrants. Some is state pass-through, where the county is itself the subrecipient and you are a lower-tier subrecipient.

Special districts and regional authorities are the least searched funders in the country and there are more of them than any other type of local government, as the current figures above show. Air quality management districts fund clean-vehicle and community air projects. Water and flood control districts fund conservation, stormwater, and habitat work. Transit authorities fund mobility and access programs. Resource conservation districts, port authorities, hospital districts, library districts, and regional councils of government all run grant or subgrant programs, usually announced only on their own websites and in their own board packets.

Board packets are, in fact, the highest-signal free document in local funding. A county board of supervisors or a district board approves the funding plan, the allocation, and often the award list in a public meeting, with the staff report attached. Reading those agendas tells you what is about to be competed months before a notice appears.

Why are state and local grants less competitive?

State and local grants are less competitive largely because they are harder to find. There is no government-wide portal for them, listings are scattered across hundreds of state agency sites and thousands of local ones, and the applicant pool for any given program is bounded by geography rather than by subject. Fewer applicants see the opportunity, and fewer still are eligible.

Fragmentation is structural, not accidental. Grants.gov indexes federal discretionary opportunities; it does not index the state competitions that redistribute federal formula money, because those are state competitions. Each state decides independently whether to run a central listing, and the states that do run one usually built it under their own statute. California, for instance, requires every state agency to register every grant it administers with the State Library before beginning a solicitation, which is why a single searchable state portal exists there and not everywhere (California Government Code § 8334; California Grants Portal).

Below the state level there is no equivalent requirement anywhere. A county publishes to its own procurement page, a city to its community development department page, a district to a board agenda. Commercial aggregators, including OpenGrants, exist mainly to assemble exactly this layer, because no free source does it comprehensively — a fair description of the category rather than a claim of secret access.

The competitive consequence is real and it runs in your favor. A national discretionary program may draw thousands of applications for dozens of awards. A state program competing the same federal dollars draws applicants from one state. A county program draws applicants from one county who also know the staff. Difficulty of discovery is a barrier to entry, and barriers to entry protect the people who cross them.

How do you find state and local grants?

Finding state and local grants means working backward from the policy domain to the administering body, because no index will do it for you. There are six steps, and the first two produce most of the results.

1. Name the federal program that funds your work, then find the state agency that administers it. Search the program name plus your state; the administering agency will have a page for it, usually with a subrecipient handbook and a cycle calendar.
2. Go directly to the state agency that owns the policy domain. Health, education, workforce, transportation, housing, environment, agriculture, arts, and public safety each have a lead state agency, and each publishes its own opportunities.
3. Check whether your state runs a central grants portal. Some states maintain one under statute; where none exists, the state register or administrative bulletin often carries funding notices as legal advertisements.
4. Check the state’s intergovernmental review contact. States that participate in review under Executive Order 12372 designate a single point of contact, published by OMB, and that office frequently maintains a broader view of federal money entering the state (OMB, Intergovernmental Review SPOC List).
5. Work the local layer deliberately. Subscribe to county board and city council agendas, the community development department, and any special district whose mission touches your work.
6. Trace prior awards. Federal awards to your state and the subawards flowing from them are reported publicly, so USAspending.gov will tell you which state entity received a program’s money and who received subawards from it. The general search discipline is in how to search for grants.

What goes wrong with state and local grant applications?

Six failure modes recur in state and local grant applications, and most of them come from treating a state competition as if it were a federal one.

• Reading the federal rules and stopping there. The state’s requirements sit on top of the federal ones, and the state’s application instructions govern the submission.
• Missing the registration the state actually requires. Many state systems require their own vendor or subrecipient registration, and some also require an active federal registration; see SAM.gov registration and the UEI.
• Ignoring the state plan. Formula programs run against an approved state plan that names priorities and target populations, and reviewers score against it whether or not the notice repeats it.
• Assuming a subaward carries no audit exposure. Federal money spent under a state subaward counts toward the Single Audit threshold exactly as a direct award does.
• Missing the local match or maintenance-of-effort condition. States commonly push cost-share obligations down to subrecipients, and the requirement appears in the subaward terms rather than in the announcement.
• Applying only when a notice appears. Local allocations are decided in public budget hearings months earlier; organizations that engage at the notice stage are competing against ones that engaged at the budget stage.

Frequently asked questions

Is state grant money actually federal money?

Often, yes. A substantial share of state grant programs redistribute federal formula and block grant allocations, and federal funds account for roughly a third of total state government revenue as shown in the current figures above. States also appropriate their own money for grant programs, and the two are frequently blended inside a single announcement.

Do federal rules apply to a state subaward?

Yes. A subaward of a federal award carries the federal cost principles, procurement standards, reporting requirements, and audit exposure down to the subrecipient, along with any additional conditions the state imposes. The pass-through entity is required to communicate those terms in the subaward document.

Are state and local grants easier to win than federal grants?

They are usually less competitive rather than easier. Applications are shorter and review is faster, but eligibility is narrower, geography is binding, and local relationships carry more weight. The advantage comes from a smaller applicant pool, not from a lower standard.

Where do you find county and city grant opportunities?

On the jurisdiction’s own website and in its public meeting materials. Counties and cities post to departmental pages, procurement portals, and board or council agendas, with no central index. Subscribing to agendas for the departments that fund your work is the most reliable method.

What is a State Single Point of Contact?

A State Single Point of Contact is the office a state designates to review proposed federal financial assistance under Executive Order 12372. Participation is optional, and OMB publishes the list of states that designate one. Some federal notices require applicants to submit to that office in parallel with the federal application.

Do special districts really award grants?

Many do. Air quality districts, water and flood control districts, transit authorities, resource conservation districts, and regional councils run grant and rebate programs funded by their own revenue or by state and federal allocations. Special districts are the most numerous type of local government, and among the least searched.

Related topics

• Funding Tracks by Funder Type — the hub comparing federal, state, foundation, corporate, and innovation funding
• Federal Grants Explained — the rules that follow federal money into a state subaward
• Foundation Grants — how private philanthropy differs from government funding
• Grants vs Contracts vs Cooperative Agreements — the instrument test that also applies to state awards

Sources

1. Congressional Research Service. Federal Grants to State and Local Governments: A Historical Perspective on Contemporary Issues, R40638, June 26, 2025. https://www.congress.gov/crs_external_products/R/PDF/R40638/R40638.35.pdf (accessed 2026-08-11)
2. Congressional Research Service. Community Development Block Grants: Funding and Allocation Processes, R46733. https://www.congress.gov/crs_external_products/R/PDF/R46733/R46733.3.pdf (accessed 2026-08-11)
3. Electronic Code of Federal Regulations. 2 CFR 200.1 — Definitions. https://www.ecfr.gov/current/title-2/subtitle-A/chapter-II/part-200/subpart-A (accessed 2026-08-11)
4. Legal Information Institute, Cornell Law School. 2 CFR § 200.331 — Subrecipient and contractor determinations. https://www.law.cornell.edu/cfr/text/2/200.331 (accessed 2026-08-11)
5. Legal Information Institute, Cornell Law School. 2 CFR § 200.332 — Requirements for pass-through entities. https://www.law.cornell.edu/cfr/text/2/200.332 (accessed 2026-08-11)
6. Legal Information Institute, Cornell Law School. 24 CFR § 570.480 — State Community Development Block Grant program, general. https://www.law.cornell.edu/cfr/text/24/570.480 (accessed 2026-08-11)
7. U.S. Department of Housing and Urban Development, HUD Exchange. State CDBG Program Eligibility Requirements. https://www.hudexchange.info/programs/cdbg-state/state-cdbg-program-eligibility-requirements/ (accessed 2026-08-11)
8. U.S. Department of Labor, Employment and Training Administration. State Statutory Formula Funding. https://www.dol.gov/agencies/eta/budget/formula/state (accessed 2026-08-11)
9. Legal Information Institute, Cornell Law School. 20 CFR § 683.120 — How are Workforce Innovation and Opportunity Act title I formula funds allocated to local areas? https://www.law.cornell.edu/cfr/text/20/683.120 (accessed 2026-08-11)
10. U.S. Census Bureau. 2022 Census of Governments — Organization Component, Government Organization Tables. https://www.census.gov/data/tables/2022/econ/gus/2022-governments.html (accessed 2026-08-11)
11. U.S. Department of the Treasury. Coronavirus State and Local Fiscal Recovery Funds. https://home.treasury.gov/policy-issues/coronavirus/assistance-for-state-local-and-tribal-governments/state-and-local-fiscal-recovery-funds (accessed 2026-08-11)
12. California Legislative Information. Government Code, Title 2, Division 1, Chapter 5.2 — Grant Information Act of 2018 (§§ 8333–8334.1). https://leginfo.legislature.ca.gov/faces/codes_displayText.xhtml?article=&chapter=5.2.&division=1.&lawCode=GOV&part=&title=2. (accessed 2026-08-11)
13. California State Library. About This Site — California Grants Portal. https://www.grants.ca.gov/about-this-site/ (accessed 2026-08-11)
14. Office of Management and Budget. Intergovernmental Review (SPOC List). https://www.ojp.gov/IntergovernmentalReviewSPOCList.pdf (accessed 2026-08-11)
15. USAspending.gov. Federal spending, prime award, and subaward data. https://www.usaspending.gov/ (accessed 2026-08-11)