The Ultimate Guide to Beat Government Grant Scams

Government Grants Scams

Government grants scams are difficult to spot and easily to fall for. Today’s post will teach you how to spot grant scams, and most importantly, how to beat grant scams by not falling for them in the first place.

First, government grants are difficult to get. On average, only about 3 to 8 percent of competitive grant proposals submitted, get funded. There are exceptions of course, with some programs funding as many as 50% of proposals submitted, but those are the exceptions, not the rule. In preparing grant proposals, you must submit the proper documents, with the proper information, and meet all other program requirements to get awarded the grant you seek.

This is all very time consuming. Developing a compelling grant proposal that gets funded can take anywhere from 40 hours of effort to well over 200 hours of effort, depending on the program or funding award level.

Many people are very aware of this and have built entire businesses around telling others that the federal government has billions of dollars in “free money grants,” available just for asking. They will also tell you that the government offers grants to women, persons belonging to traditionally underrepresented populations, military veterans and more so they can start a business, pay off debts or do something else they would like to do, if they only had the money.

But this is just not true. The government never offers grants to start a business, pay off debts or simply because you are a woman, a veteran or belong to a traditionally underrepresented group. Deception is at the core of every scam, and the people telling you otherwise, seek to take advantage of the vulnerability of people who are desperate.

Here are some of the most common types of grant scams and how you can protect yourself when you are confronted with these situations:

  1. Phone, text, email or paper mail, messages that say you are eligible for a government grant. Note that the government doesn’t individually contact people to tell them that they have been given grants — especially if you didn’t even apply in the first place. This probably comes from someone who wants to get your private data such as your bank account number or Social Security Number. A number of television ads and websites make this fall claim about government grants.
  2. An advertisement (on television, in print or on the Internet) says that the U.S. Government gives away millions (or billions) of dollars in grants each year to help individuals pay off debt, start a business, buy a house or do any number of other things. All you have to do is buy their book or guide that promises to tell you all the little known secrets to finding and applying for government grants that you don’t have to pay back. If you receive anything at all though, it’s usually a ‘Government Grant Information Guide’ (or something similar) that tells you how and where to apply for government grants. But here’s the catch — the Federal government does not give money to individuals to start a business or pay off debts. In any case, the information — as useless as it may be — is usually outdated and provides nothing more than what is already available to the public for free.
  3. Paying a premium to obtain a grant. If you are applying for or have won a government grant, you don’t have to pay an application or acceptance fee. Any U.S. citizen or permanent resident living in the United States can apply for a grant without any application or search fees. The correct process is to submit your application through an officially sanctioned government grant site such as Grants.gov, eRA Commons or other official sites; and there is NEVER a cost to do this.
  4. Receiving information from fake government agencies. Sometimes you may receive messages from entities that sound legitimate but don’t actually exist. Double-check the government agency that sent you a message if it is indeed correct. For example, you might receive a phone call, saying that you have been “approved for a grant from the federal government” in amounts that range from $5,000 to $30,000. They often lie about where they’re calling from and like to use official-sounding names, hoping that you’ll think that they’re calling from a government agency. They usually say that you qualify for a grant because you paid your taxes on time or because you’re a woman, a senior citizen, a minority or something similar. Once you’re hooked, the telemarketer will move in for the kill and then try to get your bank account information so they can deduct a processing fee of $199.00 to $249.00. Of course the grant never materializes, you’re out the fee and it’s next to impossible to get your money back even though they may have promised you a money back guarantee. A variation of this scam is a “free grants” ad in the classifieds, inviting you to call a toll-free number for more information. Once they get you on the phone, the rest of the scenario is the same.

Steps to Report Fraudulent Grant Activity

If your suspicions have been alerted about a potential government grant scam, the Federal Trade Commission is the office where you should lodge your complaint. Its contact number is toll-free at 1–877-FTC-HELP (1–877–382–4357).

Make sure to include pertinent information so that the authorities can crack down on the scam perpetrators. Mention the date and time of the call or the email and also the name of the government agency used by the scammer.

Provide details about what they told you, the amount of money they are asking for, as well as the payment method. Document the phone number or email address of the scammer for tracking purposes.

Other grant-related scams can be reported to the U.S. Department of Health and Human Services (HHS). Their fraud hotline is 1–800–447.8477.

Here is What the Federal Trade Commission Says

  • Avoid sending money: One of the reasons why scammers do what they do is to get money. And if you get fooled into sending cash, it’s almost untraceable. Likewise, don’t share your bank or credit card account information. You never have to pay taxes or insurance for a grant you have supposedly been awarded. Remember — if you didn’t submit a grant proposal in the first place, you can’t win. Don’t ever pay any money for a “free” government grant. It’s not free if you have to pay for it. Government agencies would never ask you to pay a processing fee for a grant that you have already been awarded — or to pay for a list of grant-making institutions. The names of agencies and foundations that award grants are available for free at any public library or on the Internet. The only official access point for all federal grant-making agencies is Grants.gov.
  • Protect your personal information: If scammers can get hold of your private data, they can access your bank accounts and steal your money. They can even perform identity theft and cause more damage. Be very careful with this information, especially when using Wi-Fi when traveling. Consider using a Virtual Private Network (VPN).
  • Don’t trust easily: Technology has improved, and scammers can fake their locations when making phone calls or sending emails. Ask for credentials when engaging in phone conversations with strangers. Verify the information directly to the agency they are claiming affiliation with.
  • Look-alikes aren’t the real thing: Just because the caller says he’s from the “Federal Grants Administration” or something similar, it doesn’t mean that he is. There is no such government agency. Take the time to do your research online to be sure you know to whom you’re talking.

There you have some of my best tips for beating grant scams. If you’re interested in learning how to actually WIN a grant, then talk to us! We have won more than $800 million in funding for our clients.

I love entrepreneurship and helping businesses and organizations build foundations for growth and funding success. Let’s talk startups, growth and leadership!

Get the Medium app

A button that says 'Download on the App Store', and if clicked it will lead you to the iOS App store
A button that says 'Get it on, Google Play', and if clicked it will lead you to the Google Play store