Search
  • S3 Solutions

Government Grants: Advantages and Disadvantages

For organisations in any sector, determining the best type of funding can be a challenge. There are endless opportunities available. But first, you must do your research to see which is the right fit for you.


Whether it be to support an initiative or an idea, government grants are a great way to keep your mission alive.


Yet, with everything, it is vital to weigh up the pros and cons. By doing this, you will better understand how your organisation can succeed. In this blog, we cover everything you need to know about government grants - from what they are, to what their benefits and drawbacks are.


What is a Government Grant?

Government grants are when a local authority funds a project to provide public support and stimulate the economy. Usually, grants are awarded to finance or reimburse activities that meet the governments priorities and objectives at that time. This can cover anything from a charitable cause to a business startup, in any kind of field.


For example: when Disability Action came to us for development support, we helped them apply for multiple government and public grants. These grants gave crucial aid to the charity. As a result, over £13,000,000 of investment was secured across a range of sources. From this, the charity has been able to pursue its vision and continue to provide vital support to their beneficiaries.


Out of the different types of funding available, government grants are the most sought after. This is because there is no need for the eligible grantee to pay the funds back so long as the grant is spent in accordance with the funding requirements.


With this highly favourable option, comes fierce competition. Even though many organisations hope to get government grants, accessing them is easier said than done.


To help you decide if a government grant is worthwhile for you, here is what you can expect.


person filling out application form in front of laptop
Government grants have both their pros and cons. Image credit: Goer.ny.gov

Advantages of Government Grants

If successful, an organisation can expect a range of benefits from a government grant.


They are Non-Repayable

One of the biggest benefits is that grants are never expected to be repaid. They are like a donation from the government, making them very appealing over other financial support. This is because with the likes of loans, you will always be expected to pay back what you borrowed - often with added interest!


One key decider is if the government believes an organisation is doing work worth encouraging. Usually in order to fulfil a policy or public interest need. With this support, it means more financial gain than loss, plus more chances for success.


They are Widely Available

With government grants, there are so many to choose from across all industries. From healthcare, education or even commerce.

The official government grants statistics for 2019-2020 showed that £118 billion was allocated to grant spending across 1,915 schemes. This proves how plentiful and adaptable these grant schemes are, meaning a new opportunity will always present itself for your organisation.


Plus, you can apply for as many grants as you want, as there are no limits. This means if you qualify, you can secure multiple grants at once for different projects.


They Boost Credibility

As it is so competitive to secure a government grant, by receiving one, this is seen as a great achievement that’s highly credible.


From this, your organisation is in a good position to use this as a benchmark to apply for more funding in the future. Plus, with closer government ties, comes an admired level of status. This can encourage stakeholders to consider you an expert in the field. As a result, they may be more inclined to choose your services over others.



person with calculator writing on notepad
Between 2019-2020, almost 2,000 government grants were offered in the UK. Image credit: Business.com

Disadvantages of Government Grants

While the above mentioned benefits are strong, government grants do come with several disadvantages.


Writing Proposal is Taxing

Unfortunately, applying for government grants can be a gruelling process. Your proposal has to tick many boxes in order to be considered. From standing out from the rest, to proving your worth, to meeting the strict criteria.


Grant applications can take many months of planning and hours of writing. Plus, it takes even longer to find out if the proposal has been approved or rejected. However, organisations can benefit from hiring a professional consultant or specialist writer to help free up time and effort.

You are Contractually Bound

With government funding, there’s always strings attached. This means that the grant will only be awarded to you if the government believes your mission aligns with their needs. Therefore you must abide by this, meaning your spending is essentially controlled.


There are always rules, targets and timescales to follow, which involves a lot of paperwork and human labour. This is so that the government can track the usage of its funds, and ensure you are keeping up with your end of the deal.

They are a Short-Term Solution

While they are a good financial boost initially, government grants are unsustainable as they are merely a short-term option.


This means that you cannot rely on them to keep you afloat for long periods of time. If you receive a big one-off payment, you must ensure that its spending is carefully planned out and that every penny is accounted for. Because of this fact, a government grant can actually lead to a lot of working hours and manpower to keep up with the demand, for only a short length of time.


Key Takeaways

Its clear to see that the advantages of government grants outweigh the disadvantages. As they can help an organisation make positive strides and pose unique opportunities that you wouldn’t get anywhere else.


If you’re willing to invest the time and effort needed to secure funding - you should definitely go for it. Our key piece of advice is to have an initial chat with a professional. Just to make sure you're prepared for what to expect from government grants, and are fully informed on the best approach to take.


At S3 Solutions, we are a specialist consultancy that is dedicated to helping organisations apply and gain access to funding. For more information, please feel free to contact us today.