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Methods of Federal Funding > Grants > History of Federal Grants

The History of Federal Grants

The federal government began awarding grants before the United States Constitution was even drafted.  One of the first examples of grant making was outlined in the Articles of Confederation whereby Congress provided for grants of land. Throughout our nation’s history, the federal government continuously provided aid to states and local governments to help address things like natural disasters, civil disturbances, westward expansion, and the need for internal improvements.

The federal grant system that we have today began to take shape in the early 1900s.  Throughout the 1910s grant programs were created that included features similar to today’s grants such as matching and eligibility requirements. During the Great Depression, the Roosevelt Administration worked with Congress to expand the grants in aid system by creating programs for social relief, financial reform, and economic recovery.  The grant system expanded further under President Lyndon Johnson’s Great Society initiative whereby programs that focused on urban areas and disadvantaged populations were created.

Today, there are over 1,000 grant programs administered by 26 Federal agencies.  In fiscal year 2007, the federal government returned $439 billion to states and local governments through Federal government grants and other payments.

The map below details the amount of funding allocated, per capita, to each state.