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August 2011 Featured Article


The History of Federal Grants Provides an Interesting

Context for Today’s Fiscal Debates

Triad Associates


For our August article we thought that it might be interesting for communities to learn about the history of federal grant programs.  Federal grants date back to the earliest days of the Republic.  Land grants to individuals and organizations began as early as 1785.  The Land Ordinance Act, enacted by Congress under the Articles of Confederation, granted federal land for the incorporation of municipal governments with the stipulation that one lot would be reserved for public schools.


With the expansion of U.S. territory and the opening of the American West, the federal government also provided support for the growing infrastructure needs of the nation.  Land grants were typically provided for canals, waterway expansions, roads, highways and railroads.  As the 19th century progressed, these grants-in-aid were expanded to include support for fort construction, postal service expansion and communication infrastructure.


The Civil War had a significant impact on the federal grants-in-aid system because it expanded the concept that the federal government had many legitimate roles to play in the states that made up the union.  The war years and the post-war era saw the enactment of the Pacific Railroad Act in 1862, which prompted the construction of the first transcontinental railroad from Sacramento, California to Council Bluffs, Iowa (which connected to a previously constructed network eastward).  The Morrill Act was also passed in 1862 which granted land for the establishment of centers of higher learning.  Many of the nation’s “State Universities” were founded in this manner.


The post war years also saw the gradual involvement of the federal government in social issues.  In 1879, the Congress authorized aid for the blind and visually impaired.  The aid was tied to the educational needs of this population and was one of the first financial grants provided to local and state organizations.


The custom of providing financial grants-in-aid did not get started in a big way until the early part of the 20th century.  The Weeks Act of 1911 provided a large sum of money for the time, $200,000, to aid states or groups of states in addressing efforts to protect forested watersheds and navigable waterways from fire.  Many experts consider this to be the first of the “modern” grants-in-aid program.  Other such acts quickly followed for financial grants to construct rural highways, vocational education and other workforce training.


The New Deal policies of the 1930’s and 40’s greatly expanded the role of the federal government through initiatives such as the Tennessee Valley Authority, the Federal Relief Act and a range of categorical grant programs.  The second half of the 20th century continued the expansion of grant initiatives with programs being created to address agricultural research, health care, housing needs, the interstate highway system and many other initiatives.


In the 1970’s the Nixon Administration initiated an effort to repackage grants-in-aid to provide more flexibility for state and local governments and to untangle what had become a complex web of many independent grant programs.  It was through this initiative that the Community Development Block Grant Program was born.  The block grant programs and the concept of revenue sharing, allowed states and local governments much more independence in deciding how federal funding should be spent.  The Reagan Administration continued this effort through the Omnibus Reconciliation Bill of 1981, which took 77 categorical grants and consolidated them into nine block grant programs.


With the current budget battles and cutbacks that are anticipated at all levels of government, there will likely be some of the most significant changes in the federal grant programs made in the coming few years.  There will clearly be a move to reduce and in many cases eliminate grant programs and funding sources.  How this is likely to shake out is anyone’s guess at this point... stay tuned!


Published August 1, 2011



Source:  Congressional Research Service, Library of Congress, “Federal Grants to State and Local Governments: A Brief History, 2003

Source:  Congressional Research Service, Library of Congress, “Federal Grants to State and Local Governments: A Brief History, 2003



Triad Associates is currently the League’s Grant Consulting Firm. Their firm, which is known for its expertise in community and economic development, including strategic planning, redevelopment, acquisition, relocation and funding, has brought diverse plans and projects to life by generating more than $580,000,000 for over 120 public, private and nonprofit clients throughout the Northeast region since 1978. Every member of the Triad team is personally committed and dedicated to the success of its clients and the projects that benefit communities. 


Full version of August article for printing

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