A grant is non-repayable, earmarked financial support for a specific project, awarded by a donor through a competitive selection. Unlike a loan it is not paid back, but in return it demands strict use of the funds for the stated purpose, reporting and compliance with procurement rules.
A grant differs from other funding in three ways: it is not repaid, it is earmarked, and it is awarded competitively.
The last distinguishes a grant from a subsidy: a subsidy is granted on the recipient's formal characteristics, a grant on the results of a selection among applications against the donor's criteria.
What you get and what you give up
You get money you need not repay. You give up freedom in spending it: only on what the approved budget and work plan foresee, with substantial changes only through a formal amendment, and costs evidenced by reporting.
A grant usually does not cover the full cost of a project: the rest must come from co-financing.
A grant is a contract
The most common misconception is to read a grant as "aid". Legally it is a contract with obligations on both sides, setting deadlines, results, reporting, and grounds for termination and recovery.
Hence the consequences: failing your obligations can mean not only losing further funding but repaying what you already received.
Forms of payment
Reimbursement of actual costs – the classic model, where you evidence every cost. A lump sum – payment for completed work packages, with no cost evidence. Unit rates – a fixed amount per unit, for instance per researcher-month.
Updated 27.07.2026 · Reviewed by: GetGrant editorial team
