Organizations that focus on federal and foundation funding can overlook a large source of money: the state agency down the road, the county that sets aside funds for community programs, and the pass-through programs that carry federal dollars to local groups. These funders know your geography, and their programs are often written for places like yours.
This article explains where state and local money lives, how pass-through funding works, and how to decide quickly whether an opportunity is worth your time.
Why state and local sources belong on your list
The Congressional Research Service notes that most federal prime grant awards initially go to state governments, which then award or pass through at least some of the funds to entities in counties and towns. Most federal funding reaches local areas through those subawards. If you only search federal notices, you may be missing money that a state agency is about to distribute.
State and local programs also tend to be defined by place. Funds a state or county controls are often meant for that state or county, so the eligible pool is set by geography. Whether that makes a program easier to win depends on the program, so judge each one on its own terms.
Look in three kinds of places
State agencies and central grant portals
Some states keep a central listing of grant opportunities. California is one example. Its Grants Portal, managed by the California State Library, was built under the Grant Information Act of 2018 to provide a centralized location to find state grant opportunities. State grantmaking agencies enter a summary of each opportunity, and the portal lets you search listings and sign up for updates.
Not every state has an equivalent. If yours doesn't, go agency by agency. Start with the agencies whose missions match your programs, such as health, education, housing, agriculture, the arts or public safety, and look for funding pages, grant calendars and email lists. Search your state's official website for "grants" or "funding opportunities" and confirm you're on a government site.
Pass-through programs
A pass-through entity is defined in 2 CFR 200.1 as a recipient or subrecipient that provides a subaward to a subrecipient to carry out part of a federal program. When a state agency receives federal funds and sends part of them to you, you're the subrecipient.
That has practical consequences. Under 2 CFR 200.332, the pass-through entity must identify every subaward as a subaward and give you specific information, including the Assistance Listings title and number, the federal award identification number, the federal award date and the indirect cost rate. It must also verify that you aren't excluded from federal funding, which it can do by checking SAM.gov. The requirements of the federal award, such as federal statutes and regulations, travel with the money in the subaward.
So when a state notice says it's funded by a federal program, ask which one, and look up its Assistance Listing. The federal search guide explains how to read one. Then expect the federal rules to apply to you. The federal grants overview and the article on pass-through funding and subawards cover what that means in practice.
City, county and community programs
Local governments can also be pass-through entities. The Community Development Block Grant program is a good illustration. Under HUD's regulations at 24 CFR Part 570, states and units of general local government are the applicants, and a metropolitan city or urban county receives an entitlement amount set by formula. The regulations define a subrecipient to include a public or private nonprofit organization receiving CDBG funds from the recipient, and they require the recipient to sign a written agreement with the subrecipient before it disburses any funds. That agreement must include a statement of work with a schedule and a budget.
In other words, a nonprofit that wants CDBG money applies to the state, city or county that administers the funds, not to HUD. Check your local government's website, public meeting agendas and budget documents for programs of this kind, and ask staff when applications open.
Community foundations are another local source. The Council on Foundations describes a community foundation as a grantmaking public charity dedicated to improving the lives of people in a specific local area, and it offers a locator tool on its website to find the nearest one.
A hypothetical funding plan
Say a rural housing nonprofit is rehabilitating six homes for seniors, and the project budget is $90,000. Searching only federal notices turns up nothing that fits. A wider look produces three sources:
| Source | Type | Request |
|---|---|---|
| City community development office | Local government, federal pass-through | $30,000 |
| State housing agency | State program | $40,000 |
| Community foundation serving the county | Local foundation | $20,000 |
| Total | $90,000 |
None of the three is a national competition, and each one is tied to the organization's location. Each also comes with its own deadlines, reporting and rules, so the nonprofit would need to confirm that the awards can be combined and that none restricts what the others pay for.
Qualify a state or local opportunity in five questions
Before you commit time, find out:
- Who administers it and who is eligible? Check that your organization type and location qualify.
- Is any of the money federal? If so, ask for the Assistance Listing number and the federal rules that will apply to you.
- What registrations does it require? Federal pass-through awards can require a SAM.gov registration. State programs may have their own registration.
- What does the money cover? Look for restrictions on costs, including indirect costs.
- What are the dates and reporting requirements? Note the deadline, the award period and how often you report.
For a deeper look at fit before you start, return to the one-page criteria you use for every funder.
Your next step
Find your state's central grant listing, if it has one, and subscribe to its updates. If it doesn't have one, pick the two state agencies closest to your programs and find out how each announces funding. Add your county's or city's community development office to the list, and ask when their next application cycle opens.
If a state or local opportunity comes with a request for applications, SoliContraX can read it the way it reads a federal notice. Upload the RFA, approve a concept and start from a draft built from your own materials. Start your next application.
Sources
- Tracking Federal Grant Awards: A Brief Overview, CRS In Focus IF12925 (Congressional Research Service)
- About the California Grants Portal (California State Library)
- 2 CFR 200.1, Definitions: pass-through entity and subaward (eCFR)
- 2 CFR 200.332, Requirements for pass-through entities (eCFR)
- 24 CFR 570.3, Definitions (CDBG) (eCFR)
- 24 CFR 570.500, Definitions (CDBG subrecipient) (eCFR)
- 24 CFR 570.503, Agreements with subrecipients (eCFR)
- What is a community foundation? (Council on Foundations)