If you search only the federal posting sites, you can miss a large share of the money that could reach your community. Some federal programs send funds to a state agency, which then opens its own competition or distributes the money to local organizations. Other opportunities are funded entirely by the state.
This article explains how to find both kinds, how to tell which kind you're looking at, and what to check before you apply, because the rules that come with pass-through money differ from the rules of a state-only grant.
Two kinds of state-level money
State-funded grants come from the state's own budget. The state sets the rules, the priorities and the application process.
Pass-through funding starts as federal money. Grants.gov's terminology page defines pass-through funding as funds issued by a federal agency to a state agency or institution that are then transferred to other organizations. In the federal Uniform Guidance, 2 CFR 200.1, a pass-through entity is a recipient or subrecipient that provides a subaward to a subrecipient to carry out part of a federal program. A subaward is an award from a pass-through entity to a subrecipient for carrying out part of a federal award. If you receive one, you are a subrecipient.
Both can arrive through the same state portal, with a similar application. Only one comes with federal strings attached.
Where to look
Start with the state itself:
- A statewide grants portal, if your state has one. The California Grants Portal, run by the California State Library, is one example: a single place to find grants and loans offered by California state agencies, with a link to subscribe to updates. Search your own state's name with "grants portal" to see whether it has an equivalent.
- The websites of the state agencies that fund your field, such as health, education, housing, public safety, agriculture or arts. Look for pages titled "funding opportunities," "RFA," "RFP" or "grants."
- Each agency's email list. Many agencies let you sign up for notices. Do it for every agency that touches your work.
Then connect the federal side. Federal programs are described in the Assistance Listings on SAM.gov, the public descriptions of federal programs that provide grants and other assistance. If you know a federal program that supports your field, look for the state agency that administers it in your state. That agency may be where the competition for those funds takes place.
Tell which kind you're looking at
The solicitation will usually say. Look for these signs that money is federal:
- an Assistance Listing number, a federal program title or a federal agency name;
- language about "subrecipients" or "subawards";
- requirements to follow federal regulations or "2 CFR 200"; or
- a requirement for a unique entity identifier or SAM.gov registration.
If the document doesn't make it clear, ask the contact named in the notice whether the funds are federal.
What pass-through funding means for you
When federal funds come to you through a state, the state takes on responsibilities under the federal award. 2 CFR 200.332 requires the pass-through entity to do certain things, and the results show up in what you receive:
- A clearly identified subaward. Every subaward must be identified to you as a subaward and include specific information, among it your unique entity identifier, the Federal Award Identification Number, the subaward period and amount, the Assistance Listing title and number, and the indirect cost rate.
- All requirements that apply. The pass-through entity must give you the requirements imposed by federal statutes, regulations and the terms of the federal award, plus any additional requirements it sets.
- An exclusion check. Before making a subaward, the pass-through entity must verify that you are not excluded or disqualified, which includes confirming in SAM.gov that you aren't suspended or debarred.
In practice, that means paperwork. Read the subaward terms before you sign, and ask about reporting, payment method and monitoring.
Indirect costs
For indirect costs, 2 CFR 200.332 says that if you have no approved rate, the pass-through entity must determine the appropriate rate in collaboration with you. The rate may be one negotiated between you and the pass-through entity, or the de minimis rate, which 2 CFR 200.414 sets at up to 15 percent of modified total direct costs. The pass-through entity cannot require the de minimis rate if you already have an approved negotiated rate with the federal government. See indirect costs explained for how the base works.
Subrecipient or contractor?
Sometimes a state offers a contract rather than a grant. 2 CFR 200.331 says the pass-through entity decides case by case, and that the substance of the relationship matters more than the form of the agreement. Features that point to a subrecipient include having responsibility for programmatic decision-making and being responsible for following the program's federal requirements. Providing goods or services within normal business operations to many purchasers points toward a contractor.
Ask which you would be before you invest effort. The two carry different compliance and payment rules. Pass-through funding and subawards goes deeper.
A quick fit read
Say a small rural health clinic finds a state notice for a prevention program. It checks:
- Eligibility. Nonprofit clinics in the state's rural counties may apply. The clinic qualifies.
- Source of funds. The notice cites a federal Assistance Listing number, so the money is federal and the clinic would be a subrecipient.
- Registration. The notice requires a unique entity identifier. The clinic checks that its SAM.gov registration is active.
- Award size and timeline. The clinic compares the award to the work it would need to do and the reporting it would owe.
- Fit. The program matches its services, so it's a go.
That takes about twenty minutes and results in a clear yes or no. The same steps work for finding state and local funding more broadly, and registrations are covered in registrations before you need them.
Your next step
Pick the two state agencies closest to your work. Find their funding pages, sign up for their email notices and look for any opportunity that mentions a federal program or Assistance Listing number. Write down which agencies run competitions, how often and what registrations they require.
Once you've got a state notice you intend to answer, SoliContraX can take it from there. Upload the notice, approve a concept and work from a draft built from your own materials. Get started with SoliContraX.
Sources
- Grant Terminology (Grants.gov)
- 2 CFR 200.1, Definitions (eCFR)
- 2 CFR 200.331, Subrecipient and contractor determinations (eCFR)
- 2 CFR 200.332, Requirements for pass-through entities (eCFR)
- 2 CFR 200.414, Indirect costs (eCFR)
- Assistance Listings (SAM.gov)
- California Grants Portal (California State Library)