The Catalog of Federal Domestic Assistance (CFDA) lists more than 600 grant and cooperative agreement programs with approximately $446 billion in annual expenditures. The Catalog of Federal Domestic Assistance lists project grants as one of fifteen types of federal grants, and defines project grants as “funding, for fixed or known periods, of specific projects or the delivery of specific services or products without liability for damages for failure to perform.” Fellowships, scholarships, research grants, training grants, traineeships, experimental and demonstration grants, evaluation grants, planning grants, technical assistance grants, survey grants, construction grants, and unsolicited contractual agreements are among the funding programs included in the scope of project grants. Project grants are a type of categorical grant, and these are the oldest form of federal grant-in-aid program. Federal grants-in-aid—and project grants specifically—have a long history, but are generally acknowledged to have begun in the nineteenth century, when the federal government granted land to state governments as well as individuals. Over time, the substance of grants has shifted from land to cash.
Two conflicting principles are inherent in the federal grant process—the attachment of strict conditions to awards (such as in project grants), and permitting local discretion in determining the use of the funds (such as in block grants). Project grants, by definition, apply strict conditions to the use of funding and thereby strictly regulate most local discretion over the use of the funds. Research has shown that state and local governments may become dependent on federal funding and substitute federal dollars for local tax revenue in providing programs and services. Movement toward project grants and away from more flexible block grants reduces overall local discretion in the use of federal funds. This often elevates the policy priorities of the federal government over local preferences; however, project grant funding restrictions make it difficult for local governments to shift funding to other purposes. As a result, project grants produce lower local government dependency on federal funding.
Concurrent with the shift from land grants to monetary grants in the nineteenth century was a shift within monetary grants toward greater specificity and, in particular, an increase in block grants (which were categorical in purpose) and project grants (which are specific in purpose). As the federal grant-in-aid system evolved in the second half of the twentieth century, the power of interest groups increased and their preferences were reflected in the continued growth of project grant programs. And, as Marian Palley has noted, project grants “clearly remain the most popular form of federal aid . . . and [in the future these types of] categorical grants will continue to predominate over broad-based block grants because of the strong influence of special interests” (Hale and Palley 1981, 11, 169).
In 2002, the federal government made 282,833 project grant awards totaling over $82 billion in federal funding; these funds were matched by almost $10 billion in nonfederal resources, for a total project grant impact of $92,294,985,000 in funding for specific projects. Almost half of all federal awards were for project grants.
Catalog of Federal Domestic Assistance (CFDA) Web site, http://www.cfda.org; Daniel J. Elazar, American Federalism: A View from the States, 2nd ed. (New York: Thomas Y. Crowell Company, 1972); George E. Hale and Marian Lief Palley, The Politics of Federal Grants (Washington, DC: CQ Press, 1981); Richard P. Nathan, “State and Local Governments under Federal Grants: Toward a Predictive Theory,” Political Science Quarterly 98, no. 1 (Spring 1983): 47–57; and Michael J. Rich, “Distributive Politics and the Allocation of Federal Grants,” American Political Science Review 83, no. 1 (March 1989): 193.
Michael W. Hail and Jeremy L. Hall
Last Updated: 2006
SEE ALSO: Block Grant; Categorical Grants; Conditional Grants; Crosscutting Requirements; Crossover Sanctions; Formula Grants; Grants-in-Aid; Mandates; Rural Policy; Supremacy Clause: Article VI, Clause 2; Urban Policy