Block Grants allow state and local government entities to have some reasonable flexibility in the development and implementation of programs. These are typically large, fixed-amount grants that are given by the federal government. They are awarded to state or local government entities in order to address a particular problem, issue, or area of interest.
Though Block Grants do address a particular area they come with only general specifications as to how the money is to be used. This fact means that smaller government entities such as the individual states can try different ways of attacking an issue or solving a problem. And they can do so without the federal government dictating the approach.
The states then typically make smaller grants to individual nonprofit organizations and government agencies. They also take over the tasks of identifying and assessing local needs, overseeing the procedures that go along with grantmaking, and reviewing and evaluating the results of grant awards.
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Update August 2017 We are hearing more then ever about the term “block grants” these days. There is much controversy over whether or not medicaid should be changed to a block grant structure. That would give the states more latitude and flexibility in their spending, as well as giving them an incentive to control and reduce their costs. It is difficult to sort out fact from fiction as very few in the media seem willing to treat anything this administration does as positive. Some point to relatively recent experience with Welfare Reform. In that case the switch of AFDC from entitlement to a block grant program (TANF) did result over time by reduced spending and benefits per family.
Update January 2017 Block Grants Block Grants are apt to be much more in the news once Trump is sworn in as president. He has proposed using block grants in two very major areas: healthcare via Medicaid, and Education. With regard to healthcare he has indicated he favors giving block grants to states rather than mandating who is covered at the federal level. Some argue that this will harm the most needy, while others insist states will administer the funds more efficiently and people will actually be better off. Time will tell, but often states are in a better position to respond to local needs. The area of education is another biggie many anticipate with hope, and for good reason. Trump’s intention is to give huge block grants to states and let them use it as they fit — i.e. they could use it for vouchers for each child and let those funds follow the child whether they go to a public or private school. For years urban areas, especially the low income, have made it clear they very much want vouchers.Now that someone bold is in office perhaps that will happen…
News Late September 2016 A major new block grant could be created depending on the result of the 2016 presidential election: a $20 billion block grant promised by candidate Donald Trump. Whether you like him or not, he has put forth some impressive plans that would not only stimulate economic growth but also help lower income families immensely. As just one part of his education policy, this grant would give each family the freedom to attend the school of their choice. Those choices would include charter schools as well as traditional public schools as well as private schools and magnet schools. That’s pretty awesome. Other politicians are too controlled by unions to be so bold…
News September 2016 Good news — rare in this election season! But there is actually an area of agreement between those who support Trump and those who support Clinton. Both sides agree on increases in block grants to support child care and early child development. They specifically want to make high quality early child education more accessible to lower and middle income folks. So perhaps the next president — whoever it turns out to be — will take early steps to increase quality care and education for your kids.
Regardless of your views about central government vs. state government control, block grants are pretty much a necessity in a country the size of the U.S. And there are many examples that demonstrate that local entities have a much better idea where money will do the most good than someone sitting in Washington. A good example is a recent program in Wisconsin. Using money received from the federal government in the form of a block grant, the state provided funds to a local program called Project Home. They in turn provided assistance of $5-23,000 to help families with home repairs. The program was advertised in local papers and supermarket bulletin boards and such. Learn more about it in our article about Grants for Home Repair to and see how to find similar programs in your area!
Another proponent of block grants was presidential candidate Donald Trump. His healthcare proposal includes, among other things, making the Medicaid program for the poor into block grants for states. This would bring control of the fund management closer to local communities and to nonprofit groups who already provide programs and services to those in need. Some examples of those groups are provided in the Private Assistance Programs section in Grants For Housing.
Now that Trump is president, a very current example of Block Grants is their potential role in an eventual new government healthcare plan. Rather than making the plan an unlimited program that is an entitlement, the federal government could issue block grants to the states like they do for TANF (Temporary Assistance to Needy Families.) Such a program motivates states to operate efficiently. They can have an impact on the provision of health care services by the way they legislate licensing, the scope of care provided by non-physicians, the amount of taxes they levy, and more. It can be a win-win with the poor receiving improved care and taxpayers shouldering less of the cost.
Many who favor Block Grants like the fact that they give states and local government entities the ability to create new programs and experiment with ways best to spend grant monies. Proponents argue that local entities are in the best position to identify and address critical problems. As a result they expect programs to be more effective and better suited to local needs. They also appreciate the fact that the requirements attached to grants given at the local level may be less onerous than is typically the case with federal grants.
Those who do not favor Block Grants tend to prefer more central government control. They complain that the federal government is unable to keep track of the way money is ultimately being spent and that the have similar lack of visibility of program outcomes. While proponents see the lack of administrative requirements as a blessing, opponents consider reduced or nonexistent administrating as a major disadvantage of this type of grant. Opponents also fear that funds will be misused by the local entities, with money redirected to areas other than the social needs the Block Grant is meant to address.
There is a broad range of categories in which Block Grants are awarded. Following are examples of Block Grants, either currently or previously awarded:
Social Services Block Grant: funding provided to States to provide social service programs such as child and adult daycare, protective services, substance abuse counseling, independent living, employment services, and transportation to individuals. States which receive this grant are responsible for their own funds and the determination as wo who will receive funds.
Food Stamps Block Grant A Block Grant that replaces food stamps for as many as 5 states.
Temporary Assistance to Needy Families This Block Grant is used to help needy families with children. Its primary purpose is to allow children to stay at home with their guardians.
Housing: This block grant is given in lieu of Section 8 vouchers, providing instead the Flexible Voucher Program relevant to public housing agencies.
Mental Health Block Grant Also known as the MHBG, has provided millions of dollars for states to use in treaing mental illness. And since 1986, states have been required to involve State Mental Health Planning Councils which include family members and “non-treating” professionals to help put together effective and comprehensive plans for treatment and care of patients.
The New Freedom Program A Block Grant that assists with alternative means of transportation for people who have disabilities.
The Indian Housing Block Grant offers aid to low-income American Indians and Alaska Natives specifically for housing. It is awarded to tribes in order to make housing an affordable option.