What are the disadvantages of grants?

Answer 1

• Government grants are usually on a reimbursement system, so if you are a cash-strapped organization, you might face hardships.
• Preparing government grant proposals usually require hard work and tons of research and planning. They are not easy to write.
• Government grants come with requirements to spend the funds according to a complex set of regulations and laws that could increase your bottom line as you may need the expertise of an attorney, accountant, or other professional.
• Government grants often come out with a set of rules for who are eligible to apply that can be so specific that it excludes many organizations. And they tend to demand certain activities must be included in any project to be funded -- which may increase an organization's expenses.
• Government grants are VERY competitive. Many organizations are going after the same pot of funds.

Government grants are a double edged sword. While the simple fact is that they are free money to complete a set task, one must understand that there is a big difference between free money and easy money. Government grants come with quite a bit of regulation and red tape. This is of course designed to help prevent grant fraud and misuse. However, it makes getting these grants sometimes a lengthy process.

Still, the benefits far outweigh the frustrations. When you consider the fact that you can receive thousands of dollars to eliminate debt or start a small business or even go back to school, the red tape and bureaucracy shows itself for what it is, a minor inconvenience. Ultimately you must be the one to decide if a government grant is right for you.