Grants are funds given to tax-exempt nonprofit organizations or local governments by foundations, corporations, governments, small business and individuals. Most grants are made to fund a specific project and require some level of reporting. The process involves an applicant submitting a proposal to a potential funder, either on the applicant's own initiative or in response to a Request for Proposals from the funder. Other grants can be given to individuals, such as victims of natural disasters or individuals who seek to open a small business.

Other grants include intergovernmental grants which are used to correct fiscal imbalances between different levels of government. Many federations use these grants to correct imbalances between taxing and spending across different levels of government. Examples include the US, Australia and Kenya.