The Differences Between Private And Government Grants

Research and development occur not only within business and scientific contexts but also in government projects and private foundations. For the individual or group seeking funding for a specific purpose, securing approval for a grant is the primary goal. A grant can be understood as an expression of trust and confidence, similar to a contract such as a mortgage, yet different. As a mortgage is an expression of confidence in the ability of the borrower to repay the loan, so a grant is an expression of confidence in the individual or group that they will bear fruit in their research and/or recommendations.

Depending on the particular philosophy of the person or organization seeking a grant, certain sources of funding may be automatically excluded. For instance, a group with a pro-capitalist or anti-government orientation will probably exclusively seek private sources of funding. This does not necessarily mean that all groups of this ideology will exclude public funding; some seek public funding and some do not. However, no matter the orientation of the person or group in question, understanding the difference between government and private funding is essential to setting up a foundation or research project.

There are advantages and disadvantages to each source of funding, but the important thing is to realize that, because of the different natures of these sources, some advantages are greater than others, and likewise some disadvantages outweigh others.

Private grants are a more willing source of experimental or venture monies; they can be much more flexible in responding to unexpected or unplanned circumstances or events. Private funds do not have intricate regulations and qualifications that have to be met and they can often provide other forms of assistance, such as expertise, software/hardware donations, etc. In addition, private grants often face fewer applicants than public ones, which may make it easier to secure them. There are some disadvantages to private grants, such as smaller grant sizes and difficulties finding information about policies and procedures.

Government grants have the most money and are likely to award large grants; they are more likely to pay all the costs of the project, both direct and indirect. With government funding, the possibilities of continued or additional funds are known up front and these types of grants are more widely available to different types of organizations.

The disadvantages of public grants are more egregious than private ones: first, the application process is tedious and involves meeting complex and elaborate regulations, rules and qualifications, second, application reviewers tend to favor established applicants, making it less likely to secure approval for new projects, and third, the cost to applicants is much higher, due to the regulations that have to be met and changing political trends can shift the availability of funds without warning.

As the above descriptions make clear, the advantages of private grants outweigh the disadvantages of government grants. For the organization seeking funding for a new project, private grants offer greater flexibility and openness than public grants. Additionally, private funding affords new applicants a greater chance of success than public monies. Private foundations are more efficient than public charities; they represent a profitable road for new ideas and applicants.