Categorical grant
Encyclopedia
Categorical grants are grants
, issued by the United States Congress
, which may be spent only for narrowly-defined purposes. Additionally, recipients of categorical grants are often required to match a portion of the federal funds. About 90% of federal aid dollars are spent in categorical grants.
Categorical grants are the main source of federal aid to state and local government, can only be used for specific purposes and for helping education, or categories of state and local spending.
Categorical grants are distributed either on a formula basis or a project basis. For project grants, states compete for funding; the federal government selects specific projects based on merit. Formula grants, on the other hand, are distributed based on a standardized formula set by Congress.
During the development of the Interstate Highway System
, congressional grants provided roughly 90% of the funding. Categorical grants may be spent only for narrowly defined purposes and 33% of categorical grants are considered to be formula grants
. Examples of categorical grants include Head Start, the Food Stamp Program
, and Medicaid
.
This type of grant differs from block grant
s in that block grants are issued in support of general governmental functions such as education or law enforcement. State and local recipients have more leeway in determining how best to use the money.
Grant (money)
Grants are funds disbursed by one party , often a Government Department, Corporation, Foundation or Trust, to a recipient, often a nonprofit entity, educational institution, business or an individual. In order to receive a grant, some form of "Grant Writing" often referred to as either a proposal...
, issued by the United States Congress
United States Congress
The United States Congress is the bicameral legislature of the federal government of the United States, consisting of the Senate and the House of Representatives. The Congress meets in the United States Capitol in Washington, D.C....
, which may be spent only for narrowly-defined purposes. Additionally, recipients of categorical grants are often required to match a portion of the federal funds. About 90% of federal aid dollars are spent in categorical grants.
Categorical grants are the main source of federal aid to state and local government, can only be used for specific purposes and for helping education, or categories of state and local spending.
Categorical grants are distributed either on a formula basis or a project basis. For project grants, states compete for funding; the federal government selects specific projects based on merit. Formula grants, on the other hand, are distributed based on a standardized formula set by Congress.
During the development of the Interstate Highway System
Interstate Highway System
The Dwight D. Eisenhower National System of Interstate and Defense Highways, , is a network of limited-access roads including freeways, highways, and expressways forming part of the National Highway System of the United States of America...
, congressional grants provided roughly 90% of the funding. Categorical grants may be spent only for narrowly defined purposes and 33% of categorical grants are considered to be formula grants
Formula Grant
A formula grant is a United States federal grant specifying a precise formula in the legislation creating the program. Formula Grants include quantifiable elements, such as population, amount of tax effort, proportion of population unemployed or below poverty level, density of housing, or rate of...
. Examples of categorical grants include Head Start, the Food Stamp Program
Food Stamp Program
The United States Supplemental Nutrition Assistance Program , historically and commonly known as the Food Stamp Program, is a federal-assistance program that provides assistance to low- and no-income people and families living in the U.S. Though the program is administered by the U.S. Department of...
, and Medicaid
Medicaid
Medicaid is the United States health program for certain people and families with low incomes and resources. It is a means-tested program that is jointly funded by the state and federal governments, and is managed by the states. People served by Medicaid are U.S. citizens or legal permanent...
.
This type of grant differs from block grant
Block grant
In a fiscal federal form of government, a block grant is a large sum of money granted by the national government to a regional government with only general provisions as to the way it is to be spent...
s in that block grants are issued in support of general governmental functions such as education or law enforcement. State and local recipients have more leeway in determining how best to use the money.