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The federal government awards hundreds of billions of dollars in grants to state and local governments each year. These grants help finance a broad range of services, including health care, education, social services, infrastructure, and public safety.

Block grants are given to states or communities and they decide how to spend the money. States prefer block grants because there are less strings attached and the money can be used for a broader purpose.

The three general types of federal grants to state and local governments are categorical grants, block grants, and general revenue sharing (see Table 1).

Block Grants The federal government places few restrictions, allowing states to spend funds within broad programmatic areas.

Block grants, categorical grants, and general revenue sharing are three types of federal government grants-in-aid programs.

The Standard Forms 424 (SF-424) Form Families represent the government-wide standard data sets and forms for grant application packages, which were developed in partnership with federal grant-making agencies and the applicant community.

Grant money refers to the funds allocated to an organization or individual. For example, a grant awarded to a non-profit organization working with migrant populations to help them develop an English literacy program over a period of 12 months would fall within the project grants definition.

For instance, a university might make a federal grant in aid to support a program that lowers the tuition rate to make it more affordable for military veterans and their spouses.