Briefly describe the four types of national grants
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There are four types of national grants to the states: (1) project grants, (2) formula grants, (3) categorical grants, and (4) block grants (sometimes called flexible grants).
Project Grants: The national government supports states through project grants for specific activities, such as scientific research, homeland security, and some education programs. Most project grants are awarded through a competitive process following an application process. Project grants are generally restricted to a fixed amount of time and can only be spent within tight guidelines.
Formula Grants: Formula grants are distributed to the states based on procedures set out in the granting legislation. The simplest formula is population—each recipient government receives a certain number of dollars for each person who lives in the jurisdiction. More complex formulas might define the target population—for example, the number of people below the poverty line or above the age of 65.
Categorical Grants: Categorical grants are made for specific purposes; hence, the term "categorical." Categorical grants for specific purposes, such as Medicaid health care for the poor, are tightly monitored to ensure that the money is spent exactly as directed. Categorical grants have the most strings attached—state and local governments need to conform to all aspects of the funding legislation in order to receive the national funds.
Block Grants: Block grants are made for more generalized governmental functions such as public assistance, health services, child care, or community development. By definition, these blocks of funding are provided with very few requirements attached.
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