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Trends and Projections for U.S. Federal Government Grant Funding, Part 2 of 2

Fri, Mar 15, 2013 @ 11:03 AM / by Alisyn Franzen

(This article is part two of a two-part series on the trends and projections for U.S. federal government grant funding. Part one of this series highlighted government grant funding trends from the past several years, what those trends might mean for grant funding and the grant funding process, and the potential impact of the recent sequestration cuts.)

In this article, part two of a two-part series, we will focus on the effects of the recent U.S. federal government’s sequestration cuts and predictions for the future of grant funding. We also will discuss how grant seekers might need to adjust their approaches in order to find and receive grant funding in the future.


How will the sequestration cuts affect federal grant funding?

Federal_Grant_SpendingIn a February 27, 2013 memo with the subject of “Agency Responsibilities for Implementation of Potential Joint Committee Sequestration” and written to the U.S. heads of executive departments and agencies, Controller Danny Werfel wrote, “Given the widespread use of grants, loans and other Federal financial assistance to non-federal entities (e.g., State, local and tribal governments, non-profit organizations, and companies), sequestration will impact the funding of these activities.”

He continued to outline the agencies’ responsibilities in managing their budgets in order to “protect [the agencies’] mission[s] at the post-sequestration level.” He further suggested that agencies “consider delaying awarding of new financial assistance obligations, reducing levels of continued funding, and renegotiating or reducing the current scope of assistance.” (See the entire memo here.)

So, according to this memo, the sequestration cuts will only further reduce the amount of money that the government sets aside for grant awards.


What do these trends mean for grant funding and the grant funding process?

In short, the federal government is likely to continue cutting future spending on the money it sets aside for grant awards, and until government officials come to an agreement about sequestration cuts, money that is currently set aside or has already been agreed to be awarded might need to be scaled back and cut as well, creating even bigger challenges for those seeking funding. As the federal government reduces grant funding, applicants for federal grants can be expected to see additional funding sources as well.

Private foundations, which also award billions of dollars annually, will in turn see more applicants competing for non-federal funds. Corporate foundations will also likely see a rise in grant applications, and non-government sectors, such as these, could also experience budget cuts as a result of cuts at the federal level.

To summarize, those seeking government funding can expect the following:

  • less federal funding available
  • increased competition for federal funding
  • increased competition for other non-federal funding sources (as a result of a need to find alternate funding sources)
  • additional reliance on non-federal funding sources, especially in educational and municipal sectors

The process and scope of these changes can make the search for funds more difficult. Organizations will need to accommodate lower levels of federal funding by 1) expanding the search for possible federal and state sources, 2) looking at additional funding sources beyond government grants, and 3) competing more effectively for fewer available dollars. Regarding the last point, more effective submissions may mean fewer submissions, but more carefully selected and more highly crafted ones. can help in all of these key areas, with funding searches across multiple types of databases, overall grant strategy assistance, help with any one specific proposal, and many other services.  To strengthen your approach, contact us today. We have experts in municipality, educational, non-profit, and other areas.  Our initial advice and consultations are always free.

For additional information on funding trends, be sure to continue checking our blog for future articles on grant-making foundations, grant-making corporations, and other articles related to grant-funding agencies, such as our recent “10 Well-Known U.S. Grant-Making Foundations You Should Know About.”


Image credit: Andrew Malone, andrewmalone

Topics: grant trend, funding trend, federal grant budget, government grant budget, government spending, government grant, federal grant, federal spending, sequestration cut, sequester cut

Alisyn Franzen

Written by Alisyn Franzen

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