Most nonprofits compete for discretionary “project” grants — but a large share of federal money flows by formula to states first, where subgrants are often overlooked.
Federal grant funding has its own vocabulary and structure. Understanding how it works — who funds what, and what the different award types mean — makes you a sharper, faster applicant. Here’s the map.
How federal funding is organized
Congress appropriates money; federal agencies distribute it through assistance programs. Every program is cataloged as an Assistance Listing (the system formerly called the CFDA) with a unique number. The specific chances to apply are published as NOFOs on Grants.gov. Browse the full catalog to see the landscape.
Types of federal assistance
“Grant” is shorthand for several award types. The main distinctions:
- Grant — funds a public purpose with little federal involvement in execution.
- Cooperative agreement — like a grant, but the agency stays substantially involved. See cooperative agreement vs grant.
- Direct payments, loans and loan guarantees — other assistance forms you’ll see in listings.
Discretionary vs mandatory funding
Some money is awarded competitively at an agency’s discretion; some is required by law to flow to certain recipients by formula. This shapes whether and how you compete — see discretionary vs mandatory grants.
Formula vs project grants
Formula (block) grants are distributed to states or localities by a set formula; project grants are awarded for specific competitive proposals. Most nonprofits compete for project grants, sometimes through a state that received a formula grant first.
The role of agencies
Each federal department funds its mission — health, education, agriculture, justice, housing. Knowing which agency funds your work tells you where to look. Explore funding by program and agency.
Strings attached
Federal money comes with rules: allowable costs, reporting, sometimes cost sharing, and audit requirements. Understanding these up front keeps you compliant and competitive. With 5,000+ grants tracked across federal and state sources, the catalog is large — knowing how it’s organized is how you navigate it. Get matched in five questions to cut straight to what fits you.
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Frequently asked questions
What is the CFDA and what replaced it?
The Catalog of Federal Domestic Assistance cataloged every federal program by number. It is now called “Assistance Listings” on SAM.gov, but the unique program numbers — still widely called CFDA numbers — remain in use.
What is the difference between a grant and a cooperative agreement?
Both transfer funds for a public purpose, but in a cooperative agreement the federal agency is substantially involved in carrying out the work. A grant involves little federal involvement after the award.
What is the difference between discretionary and mandatory grants?
Discretionary grants are awarded competitively at an agency’s discretion. Mandatory (formula) grants are required by law to flow to specific recipients according to a set formula, with little or no competition.
What is a pass-through entity?
A state or organization that receives federal funds and re-grants them to subrecipients. Many nonprofits access federal money as subrecipients of a state pass-through entity rather than applying federally.
What rules come attached to federal grants?
The Uniform Guidance (2 CFR 200) governs allowable costs, procurement, reporting and audits. Larger awards may trigger a Single Audit requirement. Understanding these up front keeps you compliant.