If it weren’t for the availability of grants, many people would not be afforded the opportunity of education, let alone a career. A grant is a sum of capital that doesn’t have to be reimbursed to the donor. Grants can be awarded by various modes including organizations, foundations, companies, and ordinary citizens who have extra funding to spare.
Our Tax Services can help you navigate the grants world but here is some grant information to help you along the way.
It is important to understand what a grant is not.
Many people have a common misconception that grants are free money and can be used for anything the recipient desires. This is just simply not the case and as a matter of fact, grant money is actually not designed to provide capital for any long duration of time. All allotted money comes with a request for proposal that explains in concise detail the terms under which the grant can be applied to.
There are important ways that grant money can be used to facilitate a cause.
Grants are used to alleviate operating costs for new businesses or enterprises, multiply an existing businesses venture or compensate for a once only fee until a self-sustaining fund can be afforded. If a student was awarded money to pay for his or her college education, all expenses such as books that accrued with that should be covered through the funds awarded.
The right way to apply a grant is to consider how best it will benefit a person or business’s goals.
Most financial experts agree that when an individual is searching for financial aid in the form of a grant, it is best to not apply for each and everyone available or eligible. Reading the request for proposal terms should give a better understanding into what that group’s money can be used for and if it does not benefit wholly the venture, it would be prudent to drop the application. This is because many applicants get caught up in the process and if the reason for needing the grant in the first place doesn’t amalgamate well to the grant’s terms, they begin concentrating on what they can do to earn it anyway.
What kinds of grants can be found?
To answer this question, an individual will need to consider what the money is needed for and whether that will be in the form of a one-time expense or continued compensation. There are many different categories and terms grants fall under. The following list outlines some of the various grants available and how that money can be spent, so an applicant can ascertain which is most suited to their needs.
•Seed money grants: This funding is also referred to as a Start-up grant. Start-up funding can be spent on initial costs to begin a business or venture. For example, in order to open a retail store, both a building and surplus would be required. Seed money could be used to acquire these things.
•Project grant funds: This refers to a particular expenditure or one time cost for a cause or venture. An example of the way project grant money can be spent would be buying computers for a learning institution.
•Operating grant funds: This money is available to spend on continuous expenses such as paying the rent of a building in which a business is operating out of each month.
•Restricted grant funds: Restricted funds are quite like project funds in that it is spent on individual one-time purchases such as buying cash registers for a grocery store. It is for meeting one aspect of a company’s need among other requirements.
•Challenge grant: These kinds of grants are very common in the business market and you often hear them being offered at radio stations or television stations. It is when a grant will be given for a specified amount if another source can raise the exact amount given. If a radio station needs to raise $20,000 and a $10,000 challenge grant was offered, callers would need to donate the remaining $10,000 to make the entire amount required.
•In-kind grant: These funds are for donated items other than money. A non-cash example would be the donation of office furniture.
If you are looking for grant help or a CPA based in Frederick MD, contact us today.