What differentiates a grant from a contract?

A grant is characterized as a means of providing financial assistance, typically intended to support a specific project or public benefit, without the expectation of receiving goods or services in return. This financial aid is often awarded based on the recipient's ability to achieve certain goals or outcomes aligned with the funding agency's mission. Grants are commonly used by government entities, non-profits, and educational institutions to foster programs and initiatives that will benefit the public or advance research.

In contrast, a contract involves an acquisition where goods or services are provided in exchange for payment. Contracts establish an agreed-upon set of deliverables, stipulating what the provider must deliver, how much they will be compensated, and the timeline for performance. The relationship established through a contract typically demands accountability and performance criteria to ensure the obligations of both parties are fulfilled.

Recognizing the distinction between these two funding mechanisms is crucial for understanding the motivations behind their use and the regulatory frameworks that govern them.