Grant glossary

67 grant and government funding terms, each defined in plain words. Search for a term below or open any of them for its own page.

Words that mean something else in grants

Some grant terms sound like they mean one thing and mean something quite different. Match is the classic one: people expect to be matched with the right grant, when a funder asking for a match wants you to put in money of your own.

Term	What people assume	What it means in grants
Award	The money is on its way.	A legal agreement. The money usually comes later, through drawdowns or reimbursement.
Drawdown	A cut to your grant.	Requesting your awarded federal money from the payment system.
Indirect costs	Costs that aren't part of the project, so funders won't pay for them.	Real overhead like rent and accounting. Most funders pay it as a percentage rate.
Letter of intent	A signed commitment, as in a business deal.	A short, non-binding notice that you plan to apply.
Leverage	Borrowing money.	Other funding your grant helps bring in.
Match	Being matched with the right grant for you.	Money you put in alongside the grant, often dollar for dollar (a 1:1 match).
Outcomes	How many people you served.	What changed for those people because of your work.
Recoverable grant	It's a grant, so you never pay it back.	A grant you repay if the funded work succeeds.
Responsiveness	Replying to the funder quickly.	Whether your application meets every stated requirement.
Restricted funds	Money you can't use.	Money you can spend, on the purpose the funder named.
Set-aside	Money a funder saves for later.	A government contract reserved for a type of business, such as small or veteran-owned.
Sustainability plan	An environmental or green plan.	How the work keeps going after the grant money ends.

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Allowable cost: A cost that passes the federal cost principles: necessary for the project, reasonable in amount, allocable to this award and treated the same way across your organization. Each award can narrow that list further.
Assistance Listing(formerly CFDA): The catalog entry for a federal assistance program, with a number that identifies it. Useful because you can look up who else has been funded under the same number, which tells you more about your chances than the announcement does.
Award: The grant itself, as a legal agreement. Accepting an award commits you to its terms, its reporting schedule and its spending rules for the whole period of performance.
Boilerplate: The reusable text about your organization, its history and its capability that appears in some form in every application. Writing it properly once is among the highest-return hours in grant work.
Budget period: A slice of the award, usually twelve months, with its own budget and reporting. A five-year period of performance often contains five budget periods.
Budget-line funding: Winning grant money by being a line item in somebody else's proposal budget instead of by applying. The grants open to for-profits are crowded; almost nobody competes to be in other people's budgets. Named after Kim and Mauborgne's idea of competing where nobody else is.
Buy Indian Act: A federal law that lets Indian Affairs and the Indian Health Service set aside purchases for Indian Economic Enterprises, businesses at least 51 percent owned and controlled by Indians or federally recognized tribes.
CAGE code(Commercial and Government Entity code): An identifier assigned to entities doing business with the US government, issued as part of SAM.gov registration. Contracting officers use it to look you up.
Capability statement: A one-page summary a government buyer uses to decide whether to talk to you: core competencies, past performance, differentiators, and the identifiers needed to verify you.
Capacity building: Funding to strengthen the organization itself: systems, training, leadership, technology and fundraising. Some funders offer it as its own grant type alongside program grants.
Carryover: Unspent funds moved from one budget period of an award into the next. Many federal awards require the agency's prior approval before you can carry money forward.
CDFI(Community Development Financial Institution): A lender certified to serve markets conventional finance underprices or ignores. Lends below market with more flexible terms, and frequently bundles in technical assistance.
Closeout: The formal end of an award: final reports, final financial reconciliation, and the point after which your record retention obligation starts running.
Cooperative agreement: A grant where the funding agency will be substantially involved in the work, not simply funding it. Read the involvement clause before deciding that suits you.
Cost share(also called match): The portion of total project cost you must supply from sources other than the funder. Frequently calculated against total project cost, not against the award, which makes it larger than people expect.
CTAS(Coordinated Tribal Assistance Solicitation): The Justice Department's single application for most of its tribal grant programs, covering areas such as policing, tribal courts, victim services and youth programs.
De minimis indirect rate: A default overhead rate federal awards allow you to charge without negotiating one. Many small organizations do not know it exists and charge nothing, which quietly makes every grant they win cost them money.
Direct costs: Costs attributable to the project itself: staff time on it, its materials, its travel.
Donor-advised fund: An account held at a sponsoring organization from which a donor recommends grants. Not something you apply to. The route is the donor, and organizations lose real time writing to the sponsor.
Drawdown: A request for payment of awarded federal funds through the agency's payment system, such as ASAP or PMS. You draw down money as you need it for costs you are about to pay.
Fiscal sponsorship: An arrangement where an established nonprofit receives and administers grant money on behalf of a project that lacks its own tax-exempt status. A real legal relationship with a fee attached, not a workaround.
FOA(Funding Opportunity Announcement): The older term for a federal grant announcement, still used by some agencies. The same document as a NOFO.
Formula grant: Federal money divided among states or localities by a set formula, such as population. Organizations usually apply to the state or city that receives it.
IHBG(Indian Housing Block Grant): HUD's formula grant under NAHASDA for affordable housing, paid to federally recognized tribes or their tribally designated housing entities once they submit an Indian Housing Plan.
In-kind contribution: Non-cash value counted toward a match: volunteer time, donated space, donated equipment, a partner's staff time. Has to be documented at the time and valued on a defensible basis.
Indirect costs: The cost of the organization existing at all: rent, accounting, IT, leadership attention. They are real costs of doing the work. Funders usually pay them as a percentage rate on top of the direct costs. Leaving them out of a budget means the organization quietly pays for the project's share of its own office, bookkeeping and management out of other money. A three-year project run from your building, through your payroll system and under your director's oversight uses a real share of every one of those shared costs.
Letter of commitment: A partner stating specifically what they will contribute and what it is worth. Weighted far more heavily than a letter of support, which only says the project sounds worthwhile.
Letter of inquiry(LOI): A short screening document some foundations require before inviting a full proposal. The funder uses it to decide who gets invited to apply. Treating it as a squeezed-down proposal is the usual way to fail it.
Letter of intent: A short notice that you plan to apply, used by funders to plan their review. Some foundations use the same name for a short pitch they read before inviting a full proposal. Read the guidelines to see which one is meant.
Leverage: Other money a project attracts because of this grant. Funders like to see their dollars bring in other funders.
Logic model: A diagram connecting inputs to activities to outputs to outcomes. Its real value is that filling it in exposes the step where your reasoning is thin.
Match: Money or in-kind value your organization puts into the project itself, usually stated as a share of the total. A 1:1 match means you contribute a dollar for every grant dollar. Some programs require it and others score it as a plus.
MTDC(Modified total direct costs): The base an indirect cost rate is charged on. It is total direct costs with some items taken out, such as equipment, rent, tuition and the portion of each subaward above a set amount.
NAICS code(North American Industry Classification System): The industry classification a government solicitation is filed under, and the basis for whether your business counts as small for a set-aside. The size standard varies by code.
No-cost extension: More time to spend money already awarded, without more money. Usually granted readily when asked in good time, and reluctantly when asked in the last fortnight.
NOFO(Notice of Funding Opportunity): The current standard term for a federal grant announcement. Follows a standard section structure, which is why reading it out of order works.
Non-dilutive funding: Money that costs a company no ownership: grants, prizes, many government contracts and some loans. Founders use it to fund research and early product work without selling equity.
Notice of award: The official document that makes a grant real. It states the amount, the period of performance and the terms you accept by drawing funds.
Obligation: The moment money is legally committed. A federal agency obligates funds when it signs your award. You obligate award funds when you place an order or sign a contract, before the bill is paid.
Outcomes: What changed as a result of the work. Distinct from outputs, and the thing review criteria almost always ask for.
Outputs: What you did or produced: people served, sessions delivered, units built. Necessary and not sufficient.
Pass-through entity: An organization, often a state agency, that receives federal money and awards it on to others. The federal rules travel with the money to every subrecipient.
Period of performance: The window in which costs may be incurred under an award. Spending before it starts or after it ends is generally unallowable however sensible the spending was.
Pre-award costs: Costs incurred before the award's start date. Many federal awards allow them within a set window if they would have been allowable after the start date.
PRI(Program-Related Investment): A foundation deploying money as a loan, guarantee or equity investment instead of a grant, at below-market return, in service of its mission. Counts toward its distribution requirement, and it is one of the few routes foundation money reaches a for-profit company.
Prime and subrecipient: The prime holds the award and the compliance obligation. A subrecipient carries out part of the work under it and inherits many of the same rules, which surprises organizations passing money to partners.
Program income: Money the funded project itself earns during the award, such as fees from a grant-funded training. It has to be reported. Most awards require you to put it back into the project or deduct it from what the funder pays.
Program officer: The funder's staff member responsible for a grant program. Before you apply, they can tell you whether your project fits. After an award, they are your main contact.
Recoverable grant: A grant the recipient repays if the funded work succeeds. If the work fails, the funder often forgives it. It sits between a grant and a loan. Funders use it most for early-stage ventures and research with a commercial path.
Reimbursement grant: A grant that pays you back after you have spent the money and claimed it. Your organization covers the costs in the meantime.
Responsiveness: In grants and procurement, whether an application or bid met the stated requirements. A non-responsive bid is not scored at all, however good it is.
Restricted funds: Money given for a specific purpose or time period. You can spend it freely within that purpose. The restriction only limits what it pays for.
RFA(Request for Applications): A funder's announcement inviting applications for a specific program, with its eligibility rules, deadlines and review criteria. Several agencies use it where others say NOFO.
RFI(Request for Information): Market research by a government buyer. Awards nothing, and responding can shape how a future requirement is written, which is invisible to anyone watching only for open opportunities.
RFP(Request for Proposals): A procurement solicitation seeking bids to deliver something the buyer specified. Not a grant: you are a vendor, and proposing a better approach can make you non-responsive, not clever.
SBIR(Small Business Innovation Research): A federal program funding research and development at small businesses. Non-dilutive, the intellectual property stays with the company, and it runs in phases.
Schedule I: The section of a Form 990 listing grants made to organizations, carrying the recipient's tax identification number. That identifier is why a match derived from Schedule I is exact, not approximate.
Set-aside: A government contract reserved for a category of business: small, disadvantaged, veteran-owned, woman-owned, or HUBZone. Qualifying businesses compete against a much smaller field.
Single audit: A specific audit required of organizations spending above a federal threshold in a year. Costs money and management attention, so it belongs in planning before you pursue awards that cross the line.
STTR(Small Business Technology Transfer): SBIR's sibling, requiring a formal partnership with a research institution and setting minimum shares of the work for each side. The designed route out of a university.
Supplanting: Using new grant money to replace funds you were already spending on the same thing instead of adding to them. It is generally prohibited. Auditors treat it as a serious finding.
Sustainability plan: How the work continues after this money stops. Answering it with “we will seek further grant funding” is the most common reply and scores poorly with reviewers.
UEI(Unique Entity ID): The identifier every federal application asks for, issued in SAM.gov. It replaced the DUNS number in 2022. Any guide sending you to Dun and Bradstreet for one is out of date.
Unsolicited proposal: A proposal the funder did not invite. Many private foundations state on their own tax return that they fund only organizations they choose themselves.
638 contract(ISDEAA self-determination contract): A contract under the Indian Self-Determination and Education Assistance Act of 1975 (Public Law 93-638) through which a tribe or tribal organization takes over a federal program, such as a BIA or IHS service, and runs it itself. These contracts are not procurement contracts or grants.
8(a) program(SBA 8(a) Business Development program): An SBA certification for small disadvantaged businesses that lasts up to nine years and qualifies a firm for set-aside and sole-source federal contracts. Businesses owned by Indian tribes and Alaska Native corporations can participate and may receive sole-source awards above the usual limits.
990-PF: The annual return a private foundation files. Lists every grant it made, its assets, its trustees, and whether it only funds organizations it selects itself. Carries no tax ID on the grant list, only names, which is why matches derived from it are approximate.

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