It is very common for the Federal Government to make grants to the fifty states, and very common for states to make grants to local governments. Categorical grants are not to be confused with general grants or unencumbered funds, which can be applied toward anything in the state/local budget. Categorical grants could be for improving road conditions, health care, law enforcement, fire protection, etc. In that case, the funds could only be applied to the category of road repair, health care, etc., thus they are called cateogical.
Federal Grants - Give money to federal programs, and jobs.
State Grants - Give money to state programs and jobs. (repairing roads for example)
Project and formula
There are several types of grants available for college students. Students could receive federal Pell grants, federal opportunity grants, and teacher education grants.
categorical grants
Grants in aid are grants to states to achieve a public project or service. Categorical grants are grants that are given to states for a SPECIFIC PURPOSE. Block grants are given to states for a GENERAL purpose.
Categorical grants refer to money given for a specific purpose that comes with. Congress in 1994 changed many federal grants into block grants.
Ronald Reagan
Today, Congress appropriates money for three types of grants-in-aid: Categorical grants: made for some specific, closely defined, purpose.Block grants: for some particular but broadly defined area of public policy.Project grants: made for some specific projects to States, localities, and private agencies who apply for them.
Grants in aid are grants to states to achieve a public project or service. Categorical grants are grants that are given to states for a SPECIFIC PURPOSE. Block grants are given to states for a GENERAL purpose.
Categorical grants are specific funds provided by the government for a defined purpose or program. Block grants, on the other hand, are broader grants given to states or local governments to be used for a variety of programs within a specific policy area, allowing more flexibility in how the funds are used.
Categorical-formula grants
An example would be Head Start or the Food Stamp program.
Categorical grants are the main source of federal aid to state and local government, can be used only for specific purposes and for helping education or categories of state and local spending.Categorical grants are distributed either on a formula basis or a project basis. For project grants, states compete for funding; the federal government selects specific projects based on merit. Formula grants, on the other hand, are distributed based on a standardized formula set by Congress.During the development of the Interstate Highway System, congressional grants provided roughly 90% of the funding. Categorical grants may be spent only for narrowly defined purposes and 33% of categorical grants are considered to be formula grants. Examples of categorical grants include Head Start, the Food Stamp Program, and Medicaid.