Categorical grant

Categorical grants, also called conditional grants, are grants issued by the United States Congress which may be spent only for narrowly defined purposes. They are the main source of federal aid to state and local governments and can be used only for specified categories of state and local spending, such as education or roads. Categorical grants are intended to help states improve the overall well-being of their residents, but also empower the federal government to exert more power over the states within a specific policy area. The United States federal government gives financial assistance to states, local governments, and other entities. They are defined and governed by the Federal Grant and Cooperative Agreement Act of 1977, as incorporated in Title 31 Section 6304 of the U.S. Code. A Federal grant is a: Federal agencies offer more than a thousand grant programs each year. Federal grants are mainly categorized into block grants and categorical grants. Block grants are not project-specific and have much broader range of uses within a concern.