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Cheryl Kester

About Cheryl

How Federal Grants Work

From Writing to Win Federal Grants (the book and workbook)

Writing to Win Federal Grants - the Bundle

This article is excerpted from the book and companion workbook Cheryl Kester and Karen Cassidy:

(2015: CharityChannel Press)

Before we delve into the details of how to find the right grant opportunities and how to write an excellent proposal, this article provides an overview of the federal grants process. We promise, no quiz at the end.

First, let’s take our first foray into the world of federal alphabet soup. What grant professionals are used to calling “the guidelines” go by many names and acronyms in the government grants world. Here are some:

  • Request for Applications (RFA)
  • Request for Proposals (RFP)
  • Program solicitation
  • Notice of Funding Availability (NOFA) or Funding Opportunity (NOFO)
  • Solicitation for Grant Applications (SGA)
  • Broad Agency Announcement (BAA)
  • Annual Program Statement (APS)
  • Federal funding announcement
  • Program guidance or the guidance

All of these refer to the same thing: the instructions that tell you that there is funding available and how you can win it.

We will most often refer to the guidelines or the RFA. But get to know this list and creative variations on it so you don’t miss the opportunity to apply for a grant because someone called it a Funding Opportunity Announcement instead of an RFA.

Food for Thought

When a Grant Is Not a Grant

We oversimplify the funding landscape by calling the funding opportunities to which you respond “grants.” Although you oftentimes won’t notice a real difference, here’s a quick overview of the differences among the most common funding vehicles you will encounter:

  • Competitive grants. An award is considered a “grant” when the funding agency does not expect a product in return (other than the report) or does not expect to be a partner with you in delivering activities or conducting evaluation. When grants are competitive, the funding agency must announce the availability of funds and let organizations apply.
  • Cooperative agreements. Cooperative agreements are a lot like competitive grants, but they require more interaction between the funding agency and the recipient. Sometimes this means only that the grant recipient agrees to participate in the funding agency’s evaluation processes. Other times, the expectations are higher. Pay attention to the RFA’s “fine print.”
  • Loans and combination grants/loans. These are just what they sound like. Some agencies loan money to recipients, usually at very favorable terms. Or the funds may come to the recipient as part grant (does not have to be paid back) and part loan (does have to be paid back and may or may not incur interest).
  • A federal contract is an agreement for the contractor to provide certain goods and services. It is not a grant and operates under different guidelines and regulations.
  • In addition, there are noncompetitive/formula grants, which are allocated by other methods and do not allow you to apply for them.

The Life of a Typical Funding Opportunity

With the caveat that there can always be exceptions and that any funding agency can take its own approach, here’s an overview of how federal grants usually work. Yes, we know that a lot happens behind the scenes before a funding opportunity is announced, but we begin at the point at which most applicants get involved.


  • Federal Register: A daily publication that lists rules, public notices, and requests for proposals from all federal agencies. Available by email subscription and searchable online at
  • An online system for searching for grant opportunities, obtaining grant guidelines and application packages, and submitting grants. It is used by most federal agencies.

  • Funding agency may announce funding opportunities that will be available later in the year. Some do this, but many do not. Agencies do their best to predict upcoming deadlines and the release of RFAs. But much can happen to affect when a grant opportunity is finally announced and a deadline set. Just do your best to keep track of when agencies anticipate releasing program guidelines by watching the agency website or subscribing to commercial services that track funding programs. If you know about an upcoming grant opportunity, you can begin planning your program and
    drafting your proposal based on last year’s guidelines.
  • Notice of funding opportunity and the application deadline are published in the Federal Register with information about how to get the complete guidelines. You may have only thirty days between the notice that an RFA is available and the submission deadline. Some grant competitions are one-time-only events. The RFA will usually make this clear. Some come out every year, while others are released in alternate years or every three or four years. It’s important to know this when weighing the pros and cons of responding to a particular RFA.
  • Applicants download the complete RFA and application package from or the funder’s website. In fact, we recommend scouring every resource you can find for FAQ, times of possible conference calls or webinars that may be held to give advice to applicants (usually called technical assistance), and lists of previous grantees. Don’t just download the RFA and assume that you have all of the important information.
  • Some funding agencies ask for a letter of intent (LOI) prior to the application deadline so that they have an idea of how many proposals to expect. Sometimes this is required—and you cannot submit a full proposal if you do not submit an LOI first. Other times, an LOI is optional. The RFA will tell you.
  • Applicants submit grant applications by the deadline. We dissect the grant application piece by piece in our book.
  • The funding agency assigns grant reviewers to panels and divides grant applications among the panels. Sometimes reviewers are agency staff members. Sometimes they are recruited from previous grant recipients and other qualified people. Regardless of who is reading your proposal, your number-one job is to make each reviewer’s job easy!
  • Reviewers read and score applications. They usually have only a small window of time to read a large stack of proposals and enter scores into an online system. If they are volunteers instead of agency staff, reviewers are usually squeezing reading applications in among their own jobs, taking their kids to doctor appointments, cleaning up dog messes, and casting their votes for Dancing with the Stars. It’s your job to make important points of your proposal stand out like flashing red lights. Otherwise, tired, overworked, but well-meaning reviewers may miss them entirely.

Practical Tip

One of the best ways to learn about federal grants and understand how reviewers read and score your proposals is to serve as a reviewer yourself. Once you’ve worked a few times with a program officer who has awarded your organization a grant, you may receive an invitation to serve as a reviewer. But you don’t have to wait for the pretty embossed paper. Many agencies request potential reviewers to contact them and submit their credentials. A list of these agencies is provided in Appendix D of our book.

How Your Application Gets Scored

Officially, the decisions regarding which applications get funded are made as objectively as possible. Once reviewers are selected, they usually score proposals in groups called “panels.” Their job is to grade the applications assigned to their panel and award a score to each one. This score is based on the evaluation criteria provided in the RFA.

Reviewers usually receive a scoring matrix drawn directly from the RFA’s evaluation criteria. The reviewers read your proposal to ensure that you earn all of your points. They often write comments explaining why they gave you an excellent score or why they did not award you the full points for that section. Other times, you will receive no reviewer comments.

The review panels then pass their scored proposals up to the agency staff. In some situations, agency staff then have the leeway to bump applications up or down on the list according to other award criteria. Agency staff also often have the authority to reduce the final award amount of some or all grantees, and this is a common strategy to enable them to make more awards. Regardless of how the final funding list is comprised, the agency then awards grants down the list until it runs out of money.


There Is No Money Tree

We get calls, probably every week, from people who have been told that federal grants are free money, just dripping off the trees. That for-profit companies (especially if they are woman- or minority-owned) can get lots of money this way.

Oh dear. We need to debunk that “free money” concept.

  • Important grant truth one: It is possible that a grant will cost your organization money. Yes, it may cost you more to implement the grant than the revenue you receive from the grant.
  • Your bookkeeper will have more work tracking and reporting on the grant money. Your custodial or utilities bills may go up because of increased use of your facility. Adding staff means someone has to supervise them and increases the load on the payroll department. The executive director will spend more time than you imagined dealing with the funding agency. Sometimes your attorney or CPA needs to get involved. These costs can be heavy, especially if your organization cannot recover them in the grant as direct or indirect costs (which we will explain later).
  • Important grant truth two: Federal grant money cannot replace your existing operating budget. You must do something new or expanded with your grant. Learn the mantra “supplement, not supplant.” Federal grant funds may only supplement what you are doing, not take the place of your existing funds. (Yes, some ongoing programs that may be completely grant funded, like Head Start or Upward Bound, award funds to enable you to continue delivering the same services. But when the program first began, it was something new. So the federal funds did not replace your funds, at least not to deliver the same services to the same number of people.)
  • Important grant truth three: More and more applicants are competing for fewer and fewer dollars. You can’t just call your senator and get a check in the mail. Grants are won through a competitive, time-consuming process. You will probably pay a staff member or consultant to spend dozens and even hundreds of hours on a proposal that is a gamble. Choose carefully when deciding to submit an application, and use your resources wisely.

Let’s say that the Big Government Agency has $1 million to award to applicants during this competition. They received 450 applications requesting a total of $5 million in funding. Clearly, only 20 percent of applications will get funded. Here’s an example of how the agency decides:

Application 1: Score 100—grant request $250,000

At this point, only
$75,000 left to award

Application 2: Score 100—grant request $200,000
Application 3: Score 99—grant request $225,000
Application 4: Score 98.8—grant request $250,000
Application 5: Score 98.5—grant request $200,000
Application 6: Score 98—grant request $225,000

Applicant 5 may get no award. Or the funding agency may give grants to the top five applications but require all applicants to reduce their grant budgets. Applicant 6 and all other applicants are out of luck.While the above example is fictional, the point at which applications are cut off is right from real life. It is not unusual for highly competitive programs to have cutoff scores of 98.6 or higher. That means, in the example provided above, that any application that scores less than 98.6 will not receive funds. You can never afford to lose a single point. Be sure to take advantage of any opportunity to earn “extra credit” through competitive preferences or bonus points.

Food for Thought

Most federal grant competitions are so competitive that you must earn every possible point to have a chance of winning a grant. If you realize that you are not able to earn some points—maybe because you cannot answer a certain question or perhaps because you do not meet some criterion—think again. Try to find a creative way to earn that point, or you may need to wait for another opportunity that is a better fit.

While the above example is fictional, the point at which applications are cut off is right from real life. It is not unusual for highly competitive programs to have cutoff scores of 98.6 or higher. That means, in the example provided above, that any application that scores less than 98.6 will not receive funds. You can never afford to lose a single point. Be sure to take advantage of any opportunity to earn “extra credit” through competitive preferences or bonus points.

Whether you win the grant or are declined, most funding agencies have a process by which you can request a copy of your scores and the reviewers’ comments. Do this whenever possible, because reading reviewers’ comments can help you understand your proposal’s strengths and weaknesses. If you were not funded, the reviewers’ comments and your scores can help you improve your application for next time. Some program officers will even review your score sheets with you and can provide additional insight. You won’t know unless you ask.

Awarding Grants

The funding agency decides which applications will receive grants. Usually this is based on the order of the points awarded by reviewers. However, agencies do have flexibility to apply other criteria to their rankings, such as geographic diversity (meaning grant dollars are spread around the country rather than being used to benefit only a few states), points awarded for previous performance, bonus points, or priorities (such as whether the applicant is in a rural location or an enterprise redevelopment zone).

The funder may notify congressional delegations of awards that will be made in their districts. If this happens, your first indication that you have won the grant may be a congratulatory call or email from your representative or senator’s office. Don’t worry if you don’t hear from your delegation. Not every agency notifies them.

If your organization is selected to receive a grant, the funding agency sends a letter or email. This is usually called a Notice of Grant Award (NGA) or something similar. This notification confirms that you were selected to receive an award, assigns an award number, and includes other such details as the starting and ending dates of the grant period and the amount awarded. It may also explain reporting requirements, but if it does not, we tell you later how these requirements might be specified by the agency.


When Do You Get the Money?

You know how when you get a foundation grant, you usually get a check for the entire grant right up front? Well, federal grants are not like that, as one organization we know learned the hard way.The organization was still pretty new to federal grants. It was definitely used to the “you got the grant; here’s your money” model. After receiving its federal Notice of Grant Award, the organization got all set up on the electronic system through which it was to request the grant funds be deposited into its bank account.

The organization was still pretty new to federal grants. It was definitely used to the “you got the grant; here’s your money” model. After receiving its federal Notice of Grant Award, the organization got all set up on the electronic system through which it was to request the grant funds be deposited into its bank account.Then the organization downloaded its money for the year. All of it.

Then the organization downloaded its money for the year. All of it.

No one realized (yes, we’re sure it was in the fine print somewhere) that you’re supposed to spread out your requests during the year—say, quarterly. And it’s really hard to put the money back once you’ve taken it out.

There were some annoyed calls from the funding agency to the grantee, lots of groveling, and promises all the way up to the organization’s president that the grantee would spend every penny appropriately and have the world’s best documentation behind every expenditure.

That was a lesson that stuck! Everyone dealing with money at that organization knew, in the future, to request partial payments at intervals throughout the year—after the funds had been spent. After a year or two of good behavior, the red flag was removed from the organization’s account with the funding agency, but it was certainly stressful when it happened.

Your organization may have to sign an agreement and return it or other documents to the funding agency before the grant becomes official. Sometimes the program officer (an agency staff member assigned to this funding program) contacts you to renegotiate parts of your budget, especially if you were awarded less than you requested. The agency sometimes even wants you to change your project activities or objectives. Usually this is fine. However, consider all such requests carefully and make sure you can meet them. If not, it is better to reject the grant at this stage than to take on something that you can’t achieve or that jeopardizes the organization’s finances.

Once your organization is selected to receive a federal grant, you will be assigned to a program officer at the funding agency. This is a very important person to get to know. Contact the program officer as soon as possible to begin building that relationship. Ask about communication preferences. Are emails or phone calls preferred? Some program officers appreciate periodic anecdotal information about your project. Some only want the reports to be filed on time. And filing reports on time is critical.

We know this life cycle is oversimplified, but it hits the highlights most relevant to those responsible for preparing proposals. Focus on what is within your control—designing an excellent program and producing a top-notch proposal. While there will always be some factors beyond your control (such as how an agency decides to distribute funds around the country or whether a reviewer on your panel did not read your proposal carefully), an excellent proposal gives you the best chance of success.

To Recap

  • RFAs go by many different names. Getting to know those terms can help you avoid missing an opportunity to apply for funding.
  • Focus your energy on submitting the best proposals possible.
  • Receiving the word that you won the grant is only the beginning. It’s not unusual to be required to adjust project activities, your planned outcomes, or the budget as a condition of the award.

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