grant-in-aid

1. A giving of federal funds to a state or local government to subsidize a public project.
2. A giving of funds to an institution or a person in order to subsidize a project or program.

Contribution or donation by a superior governmental entity to a local government for a specified purpose. Grants for specified categories are termed categorical grants; grants for general purposes, block grants.

A general term for money given to state or local governments by Congress. In many cases, grants are earmarked for specific purposes (these are called categorical grants). The federal government uses grants-in-aid to induce states and cities to fund programs they show little interest in or cannot afford. The first grants (1862) were land grants to states for public universities. During the New Deal, impoverished cities received federal money for a variety of initiatives (public housing and unemployment insurance, for example). Since World War II, the practice has grown increasingly common. In the late-1990s, Congress appropriated more than $200 billion annually (about 15 percent of federal spending) for grants-in-aid.

Bibliography

Brown, Lawrence D., James W. Fossett, and Kenneth T. Palmer. The Changing Politics of Federal Grants. Washington, D.C.: Brookings Institution, 1984.

The noun has 2 meanings:

Meaning #1: a grant from a central government to a local government

Meaning #2: a grant to a person or school for some educational project

A grant-in-aid is money coming from central government for a specific project. This kind of funding is usually used when the government and parliament have decided that the recipient should be publicly funded but operate with reasonable independence from the State. Most bodies in receipt of grants-in-aid are non-departmental public bodies.

A grant-in-aid is the money allocated by one level of government to another level of government to be used for specific purposes. They usually have requirements and standards set by the governing body for how they are to be spent. An example of this would be how the United States Congress required states to raise the drinking age for alcohol from 18 to 21 in order for the individual states to continue to qualify for federal funds for their highways.

References

• UK Government's accounting website

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