What is a categorical grant?
categorical grants are grants that are set aside for use for specific purposes and usually require some kind of corresponding program to benefit the recipient from the grant. National governments often use this approach as a means of structuring grant programs that help states or provinces with specific programs administered at local level. In order to obtain a categorical grant, the state must observe all contractual conditions related to the grant and provide a separate percentage of funds that correspond to the funds provided through the grant program.
The categorical grant differs from a similar type of grant program known as a block grant. With block grants, the funds are awarded and can be used on the range or block of different projects, the recipient decides how much of the grant money is eventually assigned to each of those projects that are classified in relatively widegroups such as general administration or law. On the other hand, a categorical grant requires only projects that are set at the time of the grant application can be financed from the yield from the grant. In many countries, strict processes and procedures are introduced that allow you to audit the use of grant money and make sure it actually goes directly to these approved projects.
The structure of the distribution of funds obtained as part of the categorical grant may include the inclusion of what is called the project base or base of the formula. On the basis of a project, states or provinces of states or provinces must compete to grant money earmarked for specific purposes, each jurisdiction is responsible for drawing up a proposal convinced by the grant manager that the project is to the extent of the grant and that there are convincing reasons why this project should receive part of grant.On the other hand, the base of the formula uses a specific calculation that is used to determine what percentage of available funds are ultimately awarded to all projects approved by the grant administrator.
A categorical grant, which is structured either on a project or pattern, can be used to provide further funding of a number of different programs that eventually help to provide basic services in the community. Programs associated with the education of young people, providing healthcare to citizens who are disabilities or pensioners who have solid income, and even programs that help provide food with economically questioned households have been financed in the past from grants of this type. In nations, such as the United States, the United Kingdom, Canada and other countries around the world, the use of a categorical grant approach remains a viable means, how to help support these types of initiatives today.