Grant (money)

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Latin grant dated 1329, written on fine parchment or vellum, with seal NLW Penrice and Margam Deeds 204 front (8634702372).jpg
Latin grant dated 1329, written on fine parchment or vellum, with seal

A grant is a fund given by a person or organization, often a public body, charitable foundation, a specialised grant-making institution, or in some cases a business with a corporate social responsibility mission, to an individual or another entity, usually, a non-profit organisation, sometimes a business or a local government body, for a specific purpose linked to public benefit. Unlike loans, grants are not intended to be paid back. Examples include student grants, research grants, the Sovereign Grant paid by the UK Treasury to the monarch, and some European Regional Development Fund payments in the European Union. [1]

Contents

European Union

European Union grants

The European Commission provides financing through numerous specific calls for project proposals. These may be within Framework Programmes. Although there are many 7-year programmes that are renewed that provide money for various purposes. These may be structural funds, Youth programmes and Education programmes. There are also occasional one-off grants to deal with unforeseen aspects or special projects and themes. Most of these are administered through what are called National Agencies, but some are administered directly through the Commission in Brussels. Due to the complexity of the funding mechanisms involved and especially the high competitiveness of the grant application processes (14%) professional Grant Consulting firms are gaining importance in the grant writing process. [2] EU grants should not be confused with EU tenders, although there can be some similarities. [3]

Another funding body in Europe is the European Research Council established by the European Commission in 2007: see European Research Council#Grants offered. Similarly there are calls and various projects that are funded by this council.

The European Commission and the Council of Europe also operate a joint grant-funding programme. [4]

Denmark

Denmark has an educational universal grant system, SU (Statens Uddannelsesstøtte, the State Education Fund). It is available to all students from 18 years of age, with no upper limit, who are currently taking courses. There are two systems of SU. [5]

In addition to the government grant scheme, more than 35,000 grants in Denmark exists, which is the second largest number of foundations in Europe by country. The foundations are estimated to possess 400 billion Danish kroner (US$60 billion) in accessible funds.

Ireland

Grant-giving organizations in Ireland include the Irish Research Council for Science, Engineering and Technology and Science Foundation Ireland for research grants.

Poland

Major grant organisations funded and operated by the government include:

United Kingdom

Grants are made available in the United Kingdom for a variety of business, charitable and research purposes. The biggest grant distributors are government departments and agencies which offer grants to third-party organisations (often a charitable organisation) to carry out statutory work on their behalf.

Other major grant distributors in the United Kingdom are the National Lottery, charitable trusts and corporate foundations (through Corporate Social Responsibility policies). For example, Google contributes to the grants process through its Google Grants programme, where any charitable organization can benefit financially from free Google Ads advertising if they share Google's social responsibility outcomes.

Grants are time limited (usually between one and three years) and are offered to implement existing government policies, to pilot new ways of doing things or to secure agreed outcomes. A grant will usually only be given for a specific project or use and will not usually be given for projects that have already begun. [6]

Over the years the discipline of writing grant bids has developed into a specialised activity. Many organisations employ fundraising professionals to carry out this work. In the United Kingdom, the fundraising profession is governed by The Institute of Fundraising and is independently regulated by the Fundraising Regulator in England, Wales, and Northern Ireland and by the Scottish Fundraising Standards Panel in Scotland. The grant writing process generally includes searching and proposal-writing for competitive grant funds. Traditional search methods - for example referring to the Charities Aid Foundation Directory of Grant Making Trusts - are quickly becoming replaced by online fundraising tools.

Because grants are sometimes received in advance of the activity they are to resource, and would need to be returned to the funder if their purpose could not be fulfilled, good accounting practice requires that grant income is not recognised "until there is reasonable assurance that the entity will adhere to the conditions which are attached to the grant". [7]

Anti-lobbying restrictions

In 2016, the UK Government introduced proposals to include an "anti-lobbying clause" in grant-funding agreements, i.e. payments which "support lobbying or activity intended to influence or attempt to influence Parliament, Government or political parties, or attempting to influence the awarding or renewal of contracts and grants, or attempting to influence legislative or regulatory action" [8] would generally not be treated as eligible for grant funding and therefore funded organisations would need to fund these activities in some other way. The Scottish Government has indicated it would not be introducing similar measures. [9]

Top grant-making charities

As of 2021, [10] 6 out of the top 10 charities in England and Wales (as measured by expenditure on charitable activities) make grants to individuals and/or organisations.

United States

In the United States, grants most often come from a wide range of government departments or an even wider range of public and private trusts and foundations. According to the Foundation Center [11] there are over 88,000 trusts and foundations in the country that collectively distribute more than $40 billion annually. Conducting research on trusts and foundations can be a slightly more intricate process, often requiring access to subscription-based directories or databases for comprehensive information.[ citation needed ]

Most often, education grants are issued by the government to students attending post-secondary education institutions. In certain cases, a part of a government loan is issued as a grant, particularly pertaining to promising students seeking financial support for continuing their educations. [12]

Grant compliance and reporting requirements vary depending upon the type of grant and funding agency. In the case of research grants involving human or animal subjects, additional involvement with the Institutional Review Boards (IRB) and/or Institutional Animal Care and Use Committee (IACUC) is required.

Grant effectiveness

Econometric evidence shows public grants for firms can create additionality in jobs, sales, value added, innovation and capital. For example, this was shown to be the case for large public R&D grants, [14] as well as for public grants for small and medium-sized firms [15] or tourism firms. [16]

See also

Related Research Articles

<span class="mw-page-title-main">National Science Foundation</span> United States government agency

The National Science Foundation (NSF) is an independent agency of the United States federal government that supports fundamental research and education in all the non-medical fields of science and engineering. Its medical counterpart is the National Institutes of Health. With an annual budget of about $8.3 billion, the NSF funds approximately 25% of all federally supported basic research conducted by the United States' colleges and universities. In some fields, such as mathematics, computer science, economics, and the social sciences, the NSF is the major source of federal backing.

Philanthropy is a form of altruism that consists of "private initiatives for the public good, focusing on quality of life". Philanthropy contrasts with business initiatives, which are private initiatives for private good, focusing on material gain; and with government endeavors that are public initiatives for public good, such as those that focus on the provision of public services. A person who practices philanthropy is a philanthropist.

<span class="mw-page-title-main">Private schools in the United Kingdom</span> Fee-paying school in the United Kingdom

Private schools in the United Kingdom are schools that require fees for admission and enrollment. Some have financial endowments, most are governed by a board of governors, and are owned by a mixture of corporations, trusts and private individuals. They are independent of many of the regulations and conditions that apply to state-funded schools. For example, the schools do not have to follow the National Curriculum, although many such schools do.

The Nuffield Foundation is a charitable trust established in 1943 by William Morris, Lord Nuffield, the founder of Morris Motors Ltd. It aims to improve social well-being by funding research and innovation projects in education and social policy, and building research capacity in science and social science. Its current chief executive is Tim Gardam.

A foundation is a type of nonprofit organization or charitable trust that usually provides funding and support to other charitable organizations through grants, while also potentially participating directly in charitable activities. Foundations encompass public charitable foundations, like community foundations, and private foundations, which are often endowed by an individual or family. Nevertheless, the term "foundation" might also be adopted by organizations not primarily engaged in public grantmaking.

<span class="mw-page-title-main">Fundraising</span> Process of gathering donations

Fundraising or fund-raising is the process of seeking and gathering voluntary financial contributions by engaging individuals, businesses, charitable foundations, or governmental agencies. Although fundraising typically refers to efforts to gather money for non-profit organizations, it is sometimes used to refer to the identification and solicitation of investors or other sources of capital for for-profit enterprises.

<span class="mw-page-title-main">Leverhulme Trust</span> British foundation

The Leverhulme Trust is a large national grant-making organisation in the United Kingdom. It was established in 1925 under the will of the 1st Viscount Leverhulme (1851–1925), with the instruction that its resources should be used to support "scholarships for the purposes of research and education."

<span class="mw-page-title-main">Charitable organization</span> Nonprofit organization with charitable purpose

A charitable organization or charity is an organization whose primary objectives are philanthropy and social well-being.

<span class="mw-page-title-main">Financial endowment</span> Legal structure for managing investments

A financial endowment is a legal structure for managing, and in many cases indefinitely perpetuating, a pool of financial, real estate, or other investments for a specific purpose according to the will of its founders and donors. Endowments are often structured so that the inflation-adjusted principal or "corpus" value is kept intact, while a portion of the fund can be spent each year, utilizing a prudent spending policy.

Matching funds are funds that are set to be paid in proportion to funds available from other sources. Matching fund payments usually arise in situations of charity or public good. The terms cost sharing, in-kind, and matching can be used interchangeably but refer to different types of donations.

<span class="mw-page-title-main">Prince's Trust</span> United Kingdom-based charity

The Prince's Trust is a United Kingdom-based charity founded in 1976 by King Charles III to help vulnerable young people get their lives on track. It supports 11-to-30-year-olds who are unemployed or struggling at school and at risk of exclusion. Many of the young people helped by the trust face issues such as homelessness, disability, mental health problems, or trouble with the law.

<span class="mw-page-title-main">Hansard Society</span> British charity promoting parliamentary democracy

The Hansard Society was formed in the United Kingdom in 1944 to promote parliamentary democracy. Founded and chaired by Commander Stephen King-Hall, the first subscribers were Winston Churchill and Clement Attlee. The society's co-presidents are the Speaker of the House of Commons, Sir Lindsay Hoyle, and the Lord Speaker, Lord McFall of Alcluith, and the vice-presidents are the leaders of the Labour, Conservative and Liberal Democrat parties. The society is named after the Hansard parliamentary record, which publishes the proceedings of the British parliament.

<span class="mw-page-title-main">One World Trust</span> Global trust

The One World Trust is a charitable organization that promotes education and research into changes required in global governance to achieve the eradication of poverty, injustice, environmental degradation and war. It develops recommendations on practical ways to make powerful organisations more accountable to the people they affect now and in the future, and how the rule of law can be applied to all.

<span class="mw-page-title-main">Charities Aid Foundation</span> International charitable organization

The Charities Aid Foundation (CAF) is a registered UK charity that operates in the United Kingdom, the United States of America and Canada. It works with companies, private philanthropists, regular donors, fellow foundations, governments, charities and not-for-profit enterprises to enable them to give more. Its stated purpose is to “accelerate progress in society towards a fair and sustainable future for all.”

<span class="mw-page-title-main">Sutton Trust</span>

The Sutton Trust is an educational charity in the United Kingdom which aims to improve social mobility and address educational disadvantage. The charity was set up by educational philanthropist, Sir Peter Lampl in 1997.

King Charles III Charitable Fund is a charity that seeks to improve communities in the UK and throughout the world through grant giving and occasionally launched activities. It awards approximately £5 million to a range of charitable causes annually and was founded by King Charles III, then Prince of Wales, in 1979.

An exempt charity is an institution established in England and Wales for charitable purposes which is exempt from registration with, and oversight by, the Charity Commission for England and Wales.

UK Community Foundations (UKCF) is a registered charity that leads a movement of community foundations committed to positive social change in the UK through the development of “community philanthropy”. Community philanthropy involves people from all parts of a community working together locally to use the financial and other resources available to them to improve others’ lives.

Materials Research Science and Engineering Centers (MRSECs) are university based research centers supported by the MRSEC Program of the Division of Materials Research at the U.S. National Science Foundation (NSF). The centers support interdisciplinary research on materials science. MRSECs are a significant component of NSF's center-based research portfolio. MRSECs were established by NSF in 1994 but their roots go back to the post-Sputnik era. These centers required significant changes in the conduct of materials research and education.

The Clore Duffield Foundation is a registered charity in the United Kingdom. It was founded in 2000 by the merger of two charitable foundations, the Clore Foundation of Charles Clore and his daughter's Vivien Duffield Foundation.

References

  1. EUR-Lex, Regulation (EU) 2021/1058 of the European Parliament and of the Council of 24 June 2021 on the European Regional Development Fund and on the Cohesion Fund, Article 5.6, accessed 26 August 2023
  2. "Horizon 2020 statistics - Horizon 2020 - European Commission". Horizon 2020. Retrieved 2016-10-22.
  3. "What is the difference between a grant and a tender?". EU Funds. 18 March 2022. Retrieved 21 March 2022.
  4. Council of Europe, Grants awarded by the Council of Europe, accessed 1 Ocytober 2023
  5. "Danish Education Support Agency". Statens Uddannelsesstøtte. Archived from the original on 6 June 2012. Retrieved 9 June 2012.
  6. "Small business finance". Bexfinance.com. 2011-10-03. Retrieved 2013-01-09.
  7. Collings, S., FRS 102: How to account for grants, Accounting Web, published 17 April 2014, accessed 15 November 2023
  8. Department for Digital, Culture, Media & Sport, Eligible Expenditure, accessed 27 April 2021
  9. Royal Society of Edinburgh, UK Government Anti-Lobbying Clause: Press Release from The Royal Society of Edinburgh, released 31 March 2016, accessed 27 April 2021[ dead link ]
  10. "Top 10 charities in England and Wales". Charity Commission for England and Wales. Retrieved 2021-03-06.
  11. "Foundation Center". Foundation Center. 2012-11-16. Retrieved 2013-01-09.
  12. "Government Grants for College". School Grants Guide. Archived from the original on 24 April 2018. Retrieved 9 June 2012.
  13. "NASA Grants and Cooperative Agreement Handbook". NASA. Retrieved 17 September 2015.
  14. Howell, Sabrina T. (2017). "Financing Innovation: Evidence from R&D Grants". American Economic Review. 107 (4): 1136–1164. doi: 10.1257/aer.20150808 .
  15. Dvouletý, Ondřej; Srhoj, Stjepan; Pantea, Smaranda (2020). "Public SME grants and firm performance in European Union: A systematic review of empirical evidence". Small Business Economics. 57: 1–21. doi: 10.1007/s11187-019-00306-x .
  16. Srhoj, Stjepan; Vitezić, Vanja; Walde, Janette (2021). "Do small public grants boost tourism firms' performance?". Tourism Economics. 28 (6): 1435–1452. doi: 10.1177/1354816621994436 .