Grant Terminology 101: The Basics

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There’s a definite learning curve when it comes to grant writing. Experience helps a lot, but so does a good foundation in the basics of the craft.

While grant writing may seem straightforward, as in any industry, there’s a certain amount of jargon that can stymie novices.  

We’ve put together a list of common terms and abbreviations that might stump a budding grant writer. Hopefully this will help you decipher complex, federal grant applications so you can focus on writing a killer grant proposal.

NOFA (Notice of Funding Opportunity Announcement)

This is the federal government’s fancy way of saying they have money available and will award it using a competitive process. The money may be awarded in a variety of ways, such as a grant or cooperative agreement. The NOFA will include eligibility information, deadlines, contact information and the “opportunity package” that lists exactly what should be included in your proposal. It’s sometimes shortened to NOFO, notice of funding opportunity.

Authorizing Official

The person within your organization who has the authority to agree to the terms of a grant award. It could be your executive director, a program manager, a board member or other person, depending on the hierarchy of your organization.

Cooperative Agreement

A type of federal funding that requires the recipient organization to work closely with personnel from the funding agency. In other words, the government will give you money to do a project AND they’ll help you do the work.

Discretionary Grant

The federal government gets to pick who they want to give money to based on the merits of the application. The money is “discretionary” meaning it doesn’t have to be awarded but if it is, the feds get to pick.

Cost Reimbursement

Fun fact. Most grant programs operate on a cost reimbursement basis. That means you do the project and ask for reimbursement after completion. That’s why your organization needs to be “grant ready” before pursuing federal funding.

Cost Sharing (or Match)

Many grant programs require cost sharing. That means you’ll have to come up with a portion of the funding yourself. So if you need $100,000 to fund a project and the grant you’re seeking requires a 25 percent cost share (or match), you’ll have to come up with $25,000 in cash, in-kind donations or other type of accepted funding. Requirements vary widely among funding programs so read the fine print.

Direct Costs

These are costs that will be billed directly to the grant program. They must be allowable, allocable and reasonable under the terms of the funding program.

Indirect Costs

Also called Facilities & Administrative Costs (F&A), this is your overhead: utilities, general office supplies, salaries of employees who don’t work on the grant-funded program. You usually can’t bill these to grant program.

Budget Narrative

Yes, you will probably include a spreadsheet that shows your project budget as an attachment. But you’ll also write a narrative explaining in greater detail how the money will be spent. For instance, a line item for equipment may include $2,500. In the budget narrative, you will breakdown the expenditure by writing exactly what the $2,500 will be used to purchase.

Logic Model

A required part of most federal applications and some for private funds, logic models are visual representations of the logical connections between the various aspects of a project.

Memorandum of Understanding (MOU)

A written agreement between two or more parties saying they will work together on a project and outlining who will do what.


The change(s) participants will see as a result of taking part in your program.

Scope of Work

A description of the work you will do for the grant-funded program.


An organization that’s partnering with you on a project. For example, if you will use a portion of the grant funds to pay another organization to provide a service that supports your grant-funded program, the second organization will likely need to be included as a subcontractor. A memorandum of understanding will probably be required.

Funding Period

The length of time federal funding is available to fund a project. It may be one year, two years or longer depending on the program. Build your application using the funding program’s time frame.

Grant Agreement

If you’re awarded a grant, your organization’s authorizing official will sign a grant agreement that spells out exactly what’s required and the reporting you must do. This is a legal document and if don’t follow it exactly, you stand to lose the grant and risk future funding.

Did we miss any terms that gave you pause? Anything you'd like some help with? Let us know and we’ll update!

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