Myths on Federal Grants: Debunked

There are different types of Federal grants and business grants that the US government provides for its citizens that help them progress towards a better future. Funds awarded by a federal agency are also referred to as “discretionary” grants; an example would be a homeless assistance grant awarded to a shelter by the Department of Health and Human Services.

Grants, commonly referred to as “formula” or “block” grants, put federal funds in the hands of States, towns, or counties for them to distribute to community organizations, charities, and other social service providers, typically under their own rules and regulations.

Different Grants

The U.S. Department of Education (ED) provides students enrolled in four-year institutions, community colleges, and career schools with various government funds. To find out more information and to find out how to apply, look into the grant programs:

  1. Government Pell Grants
  2. Federal grants for additional educational opportunities (FSEOG)
  3. Service awards for Afghanistan and Iraq
  4. Grants for Teacher Education in College and Higher Education (TEACH)

There are several misconceptions about grant management. These fallacies can affect organizations’ capacity to manage given funding properly and their ability to take advantage of available financing.

We want to dispel the top 11 fallacies we encounter to assist you in getting the facts straight so you may expand your capacity and influence.

Myth 1: Grants are “free.”

Grants have conditions and rules, particularly federal ones. The reporting criteria for various funding streams might differ, and your organization must adhere to deadlines and report on the grant’s success. Grant money usually does not need to be repaid like loans, although mismanaged grants may necessitate repayment.

Myth 2: Grants are given out according to the need


The majority of grant money is distributed through an application and evaluation procedure. The programs that best achieve the grant funder’s objectives among all applicants will be given financing, not necessarily the ones with the fewest resources. Your program might not be chosen for an award because of a lack of resources or a lack of previous successful audits and awards.

Myth 3: Previous beneficiaries of grants are always given grants.

Future financing will be contingent on your existing award performing satisfactorily. Successful completion of the Single Audit and the ability to present your results are two ways to show effective performance. Still, it also helps to have a history of open communication with your funder. Never assume anything!

Myth 4: Grant money can be used as you like.

person counting money

Even with federal grants, there are tight limitations on how to use your cash. If you decide to use your funds for an unlawful purpose, you can be required to return them, miss out on future funding opportunities, pay penalties, or even go to jail. A thorough and well-considered project strategy can help you prevent this outcome.

Myth 5: Grant management is “easy.”


Grants might be challenging, but receiving assistance with them need not be. You may ensure you’re ready by centralizing your grant data and standardizing your grant procedures. Grants programs are managing an unprecedented amount of money because of the once-in-a-generation funding opportunities provided by the American Rescue Plan (ARPA) and the Infrastructure Investment and Jobs Act (IIJA). You must innovate and rethink your grant management systems to efficiently handle these streams. What worked before won’t work as well now.

Myth 6: Grants are unconditional.

Guidelines and limits are attached to grant money. After receiving a grant, your organization is responsible for keeping a pledge to utilize the funds in a specific way, provide reports promptly, and show programming progress. If you don’t keep your word, the grantor may stop offering you money in the future. So, when you receive a grant, pictured receiving a baton in a relay race. After the award money has “finished,” you must manage and sustain your initiative. This is known as sustainability.

Funders want to see SMART (specific, measurable, achievable, reasonable, and time-bound) targets as progress indicators. Who will ultimately get this baton? The people the grant benefits, the community, or the project.

Myth 7: The grant applies to everyone.


The competition for many grant funding opportunities is fierce. If your organization applies for federal grants, keep in mind that it is up against 565 federally recognized tribes, 50 states, 5 large territories, and 11 smaller Pacific Islands. Fewer than 25 grants are awarded in some federal grant competitions where hundreds of grant applications are submitted. To increase your chances of winning, be organized, wise, and persistent.

Myth 8: If the candidate gets rejected, they move on to another funder.

Wait a minute. You might think about editing and resubmitting your application until you find it wasn’t a suitable match. If it’s a government funding program, this ensures peer review feedback, which can be used to enhance it. If the funding source is a foundation, ask for comments to improve your score and increase your chances of receiving the award.

Furthermore, there’s no need to take rejection personally; acceptance and rejection depend on various circumstances other than the writing itself.

Myth 9: My organization can quickly assemble this application.

You could complete it quickly, but probably not successfully. Take into account how much time the other team members contributed. The length of all grant work varies by program and project and might range from a few days to many weeks. The task goes beyond merely writing the application. Along with team collaboration, this also entails planning meetings, identifying partners, assigning tasks, setting expectations, gathering and evaluating documents, ensuring everyone is on board for late and weekend work, writing, editing, proofreading, and publishing.

Myth 10: If you received grants this year, you would also receive funding next year.

It’s not a given that you’ll get financing the following year just because you won one year. Politics and organizational performance both affect future financing. Because of this, even though a contract may be extended for further periods, keep in mind the following clause, which was directly taken from a NOFA: “Continued funding of the contract in future years is contingent upon the availability of funds and the contractor’s satisfactory performance during the prior contract period.”

Myth 11: You can survive on grants alone.


You can survive on grants alone, which is risky thinking. To maintain the new firefighters, you hired with AFG financing or to grow to fund rather than relying just on grants—which are prone to the turbulence of the economy, competition, and politics—proper grants management will consider alternative funding sources.


Misconceptions about federal, state, foundation, and corporate financing persist online. These false perceptions can harm grant seekers’ chances of success, frighten grant seekers who must clarify clients’ expectations, and waste everyone’s valuable time. The goal of this study is to stop the “bleeding” and encourage shrewd grant applications.